Premier African Mineral amass "multi-commodity suite" of African assets

PUBLISHED: Oct 03 2013 @ 06:01 | Comments (0) |

Follows positive August results.

Explorer-developer Premier African Minerals (LSE:PREM) has announced that it has amassed a multi-commodity suite of assets in Africa.

In late August 2013, PREM released positive results from a Preliminary Economic Assessment (PEA) and concept mining study on the flagship RHA tungsten (WO3) project in Zimbabwe. The PEA envisaged a six-year operation producing 1.89ktpa of 65% WO3 concentrate from Lode 2A. Assuming lif eof-mine (LoM) average operating costs of US$59.3/t ROM (run-of-mine), upfront capex of US$13.5m and an ammonium paratungstate (APT) reference price of US$400/mtu, pre-tax NPV0% was calculated at US$117.7m and IRR at 316%. Subsequent pit optimisation improved these figures to US$120m and 378%, respectively.

PREM hopes to be able to commence construction and production by end 2013 and 2014, respectively, subject to availability of funding. To this end, PREM reiterated at the end of September 2013 that it is in “advanced negotiations” on offtake and project finance.

In a statement PREM argued that “RHA boasts a SAMREC-compliant Indicated resource (100% basis) of 0.15Mt at a diluted grade of 0.47% WO3 and an Inferred resource of 1.09Mt @ 0.87%, for a total of 1.24Mt @ 0.82% WO3. These grades compare very favourably with those of the 10 peer companies that we follow (median and average overall resource grades: 0.28% and 0.41%, respectively).

“We believe there to be good potential to expand RHA‟s resources (and thereby volumes and/or mine life) further in the form of strike and depth extensions to Lode 2, the other known lodes and as yet undiscovered lodes (PREM‟s drilling has already identified several previously unknown veins)” the statement continued.

Shore Capital visited PREM’s RHA and Katete projects in north-western Zimbabwe in February 2013. Commenting on their findings Shore said “We were struck by the condition of infrastructure in the region, which was much better than we had expected – e.g. most roads had few (if any) potholes. Access to both projects was easy, electricity lines from the Hwange power station (Zimbabwe‟s largest) passed nearby and, importantly, in a generally dry region, we noted possible sources of water in the vicinity”.

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