TIDMPREM
RNS Number : 0959S
Premier African Minerals Limited
16 December 2016
Premier African Minerals Limited / Ticker: PREM / Index: AIM /
Sector: Mining
For immediate release
16 December 2016
Premier African Minerals Limited
("Premier" or the "Company")
Improved Off-take terms, RHA and Zulu Update, Appointment of
Chief Operating Officer, Loan Note Instrument, Corporate
Statement
Premier African Minerals Limited (AIM: PREM), the London-quoted
mining and exploration company is pleased to announce the
conclusion of an improved off-take agreement with Noble Resources
International Pts Limited ("Noble"), the appointment of Anthony
John Michalec as Chief Operating Officer, subscription for further
Loan Notes and a general update on the RHA Tungsten Project ("RHA")
and Zulu Lithium and Tantalum ("Zulu").
Highlights
-- Improved off-take agreement guarantees the sale of higher
production tonnages on better pricing terms.
-- Production at RHA to commence in early 2017.
-- Appointment of Anthony John Michalec as Chief Operating Officer (non-Board).
-- Subscription for an additional 22 Loan Notes
-- Continuing good progress at Zulu including over 37 meter
mineralised intersection in drill-hole ZDD 10.
George Roach, Premier's CEO, commented:
"The improved structure agreed by Noble, coupled with the
purchase of the first 4,100 tonnes of concentrate produced at RHA,
is as much a statement of confidence in RHA as an indication of
improving demand and prices for wolframite concentrates. We are
pleased to have successfully restructured our off-take agreement
with Noble in a deal that enlarges the scope of our partnership and
commercially benefits the project.
Progress at RHA has been good in certain aspects but slower than
planned in others. Notable has been the recent release of the
updated open pit resource statement and maiden underground
resource. Work continues in further defining the underground
resource and identifying the high grade areas that could be mined
most efficiently now. We have identified significant high grade
opportunities located off the 926 adit access level that do not
need shaft haulage. Delays are being experienced in the completion
of the shaft upgrades, which is now scheduled to be finished by the
end of January 2017. With regards to the XRT sorter, Premier has
elected to own the XRT sorter rather than to operate the XRT sorter
on a toll processing basis. The financial benefits of owning
significantly outweigh the cost of running the XRT on a toll basis
and more than justify a short delay in the supply and installation
of the system.
In order to oversee the successful transition to commercial
production at RHA, we are delighted to announce the appointment of
Anthony John Michalec as Chief Operating Officer (non-Board) to
strengthen the key management team. Anthony is a first class mining
professional with in excess of 35 years of experience in mining
engineering gained at both open pit as well as underground
operations across Africa with companies like Shanta Gold and First
Quantum Minerals. He complements our existing team at RHA.
Zulu continues to excite and the pegmatite bodies of which there
are several, may be much thicker than previously thought; the best
intersection so far is 37.81m (drilled width) in drill-hole ZDD 10.
In addition, there is high grade Tantalum mineralisation (up to
900ppm to date) and secondary lithium mineralisation in some host
rocks, which could significantly boost the overall tonnage.
In my opinion Premier's market capitalisation is not reflective
of the intrinsic value that our principle projects could reasonably
be expected to achieve and the Company will seek advice and review
each project in the coming months in an attempt to maximise
shareholder value. I note further that Premier continues to enjoy a
supportive relationship with Darwin and in particular that Darwin
has limited early conversion of the loan notes to date. In reality,
as the Company develops to a point when external financing is no
longer necessary, Darwin represents a better solution than highly
dilutive discounted placements."
RHA Tungsten Mine
RHA reviewed the financial model incorporating the X-Ray
Transmission ("XRT") sorter on a toll process basis and concluded
that the financial arguments for an owner-operation justify a
change of strategy and the short delay in the installation of the
system. Accordingly, Premier has engaged an Engineering,
Procurement, Construction and Management ("EPCM") contractor who
has provided detailed engineering designs, installation support and
quotation for a TOMRA sorter, which is now planned to be
commissioned during the first quarter of 2017. When this is
installed and commissioned, and all other upgrades completed, RHA
projects expenditure on an EBITDA basis to reduce to approximately
US$682,000 per month from the US$825,000 originally estimated (as
previously announced on 5 October 2016). The sorter and
installation is part financed on a plant rental contract and part
through Premier direct. Total cost of the sorter and installation
is $1.03m.
The new mining contractors, Afmine, are making steady progress
with the upgrades to the shaft and preparation of the stopes at the
870 level, which are anticipated to be completed in late January.
First run of mine production from high grade zones in the
underground coupled to open pit material processed through the XRT
sorter is now expected in Q1 2017.
The Off-take Agreement
Under the amended Agreement, Premier will supply the first 4,100
Metric Tonnes of wolframite concentrate produced by the mine to
Noble Resources International Pte Limited ("Noble") over an
anticipated two year period on favourable pricing terms. Pricing
for concentrates will be based at a discount to the European
Ammonium Para-Tungstate ("APT") price published by Metal Bulletin.
The most recently published price spread for APT is US$182 to $200
per mtu. Concentrates are sold in metric tonne units ("mtu") where
one mtu equates to ten kilograms of tungsten trioxide ("WO3")
contained in a concentrate at a declared percentage, normally
between 60% to 65%. At a steady state of production, RHA could
produce approximately 10,000 mtu per month of WO3 contained in a
concentrate grading +/-63% from both the open pit and underground
operations.
About Noble Group
Noble Group (SGX: N21) manages a portfolio of global supply
chains covering a range of industrial and energy products.
Operating from over 60 locations and employing more than 40
nationalities, Noble facilitates the marketing, processing,
financing and transportation of essential raw materials. Sourcing
bulk commodities from low cost regions such as South America, South
Africa, Australia and Indonesia, the Group supplies high growth
demand markets, particularly in Asia and the Middle East. For more
information, please visit www.thisisnoble.com
Loan Notes
The Company subscribed for a further 22 Loan Notes of the
available 35 Loan notes as part of the Issue Date Two of the Loan
Note agreement with Darwin Strategic Limited ("Darwin"), full terms
of which were set out in the announcement dated 22 August 2016. The
22 Loan Notes have a gross value of GBP550,000 which will be used
for the development of the RHA mine as well as general working
capital purposes. Darwin will be issued with 44,000,000 warrants at
0.0375 pence per warrant as part of the subscription.
Forward Looking Statements:
Certain statements in this announcement, are, or may be deemed
to be, forward looking statements. Forward looking statements are
identi ed by their use of terms and phrases such as "believe",
"could", "should" "envisage", "estimate", "intend", "may", "plan",
"will" or the negative of those, variations or comparable
expressions, including references to assumptions. These forward
looking statements are not based on historical facts but rather on
the Directors' current expectations and assumptions regarding the
Company's future growth, results of operations, performance, future
capital and other expenditures (including the amount, nature and
sources of funding thereof), competitive advantages, business
prospects and opportunities. Such forward looking statements re ect
the Directors' current beliefs and assumptions and are based on
information currently available to the Directors. A number of
factors could cause actual results to differ materially from the
results discussed in the forward looking statements including risks
associated with vulnerability to general economic and business
conditions, competition, environmental and other regulatory
changes, actions by governmental authorities, the availability of
capital markets, reliance on key personnel, uninsured and
underinsured losses and other factors, many of which are beyond the
control of the Company. Although any forward looking statements
contained in this announcement are based upon what the Directors
believe to be reasonable assumptions, the Company cannot assure
investors that actual results will be consistent with such forward
looking statements.
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
Enquiries:
Premier African Minerals Tel: +44 (0)7734
Fuad Sillem Limited 922074
------------------- --------------------------- ------------------
Michael Cornish Beaumont Cornish Tel: +44 (0) 207
/ Roland Cornish Limited 628 3396
(Nominated Adviser)
------------------- --------------------------- ------------------
Jerry Keen/Edward Shore Capital Stockbrokers Tel: +44 (0) 207
Mansfield Limited 408 4090
------------------- --------------------------- ------------------
Charles Goodwin/
/Harriet Jackson/ Yellow Jersey PR Tel: +44 (0) 7747
Clare Glynn Limited 788221
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Notes to Editors:
Premier African Minerals Limited (AIM: PREM) is a
multi-commodity mining and natural resource development company
focused in Southern and Western Africa with production started at
its flagship RHA project in Zimbabwe.
The Company has a diverse portfolio of projects, which include
tungsten, rare earth elements, gold, lithium and tantalum in
Zimbabwe and Benin, encompassing brownfield projects with near-term
production potential to grass-roots exploration. The Company
recently acquired a 52% controlling stake in Mozambique-based TCT
Industrias Florestais Limitada, which owns a substantial limestone
deposit and forestry business located on rail in the Sofala
Province of Mozambique. In addition, The Company holds 2 million
shares in Circum Minerals Limited ("Circum"), the owners of the
Danakil Potash Project in Ethiopia, which has the potential to be a
world class asset. At present those shares are valued at US$4
million based on the latest price at which Circum has accepted
subscriptions. Premier also has a 4.5% interest in Casa Mining
Limited, a privately-owned exploration company that has a 71.25%
interest in the 1.2 million ounce inferred resource Akyanga gold
deposit in the DRC.
ENDS
This information is provided by RNS
The company news service from the London Stock Exchange
END
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December 16, 2016 06:53 ET (11:53 GMT)