Key points:
- Premier African Minerals (PREM) shares fell despite upbeat assay results.
- The company revealed that it had encountered thick lithium deposits.
- Investors muted reaction does not diminish the report’s significance.
The Premier African Minerals Ltd (LON: PREM) share price fell today despite the lithium mining company reporting excellent assay results from its Zulu Lithium and Tantalum mine. The firm encountered multiple thick high-grade zones and lithium-bearing mineralisation with high spodumene content in the thickest pegmatites.
Investors ignored the positive results from the analysis of assays that are part of the main pegmatite ore body, despite the mineralisation being almost exclusively spodumene with little to no petalite and equally low contained micaceous mineralisation.
Also read: The Best Lithium And Lithium Mining Stocks To Buy.
However, the market’s initial muted reaction to the news should not detract savvy investors from the significance of today’s announcement, which shows that PREM’s Zulu Lithium and Tantalum mine in Zimbabwe contains some of the highest-grade lithium deposits globally.
Premier African Minerals also announced that the construction of the pilot plant remained on track and was within budget. However, investors had a change of heart since PREM shares were headed higher as I wrote this article.
Today’s announcement forms part of the mineral resource estimates required to support the Definitive Feasibility Study (DFS) ahead of the commercial drilling and recoveries. Therefore, the pilot plant will have to support today’s data by recovering the high amounts of spodumene and lithium indicated in the DFS and mineral resource estimates.
PREM also provided a detailed breakdown of the thickness of the mineral deposits encountered in each drill hole, verifying today’s results’ legitimacy and accuracy. As a result, PREM shares were trading in positive territory at writing as investor sentiment towards the company shifted.
So, would I buy PREM shares? The short answer is yes. PREM shares have risen 86.67% this year, and the company is now worth £80.7 million. The company’s value will likely skyrocket once it extracts lithium spodumene at Zulu, worth hundreds of millions.
*This is not investment advice.
PREM share price.
The Premier African Minerals share price fell 3.78% to trade at 0.356p, from Wednesday’s closing price of 0.37p.