Business Writer
HARARE – AIM listed multi-commodity mining firm, Premier African Minerals Limited will proceed with the proposed restructuring of its RHA Tungsten Private Limited, the owner of RHA Tungsten Mine in Zimbabwe in which Premier currently has a 49 percent interest without approval from Government.
This comes after the company has received written confirmation from Ministry of Mines and Mining Development that under the amended Indigenisation and Economic Empowerment Act, RHA is no longer required to comply with indigenisation policies and that the proposed restructuring of RHA can proceed without approval from Government.
In further response its proposal that Premier’s loan account in RHA be capitalised in exchange for the issue of additional shares in RHA, such that Premier would thereafter hold 90 percent of the shares in issue in RHA, the company has received a letter dated August 09, 2018 from the Ministry of Industry, Commerce and Enterprise Development of Zimbabwe, which has responsibility for indigenisation, confirming inter alia that:
Premier’s proposal as set out has been favourably received by the relevant Ministry and relevant stakeholders and progress has been made.
According to Premier, as the RHA shares in question are part-owned by Government, any disposal of these shares in relation to the restructuring and recapitalisation of RHA will be guided by relevant legislation, regulation and directives.
In light of the reassurances received from the Ministries, Premier will continue to work with the Ministries while the procedural Governmental approvals are dealt with.
“I would like to express my appreciation to the Ministries for their assurances and positive responses, which show their clear commitment to dealing with this process. RHA is a near fully developed mine and with a resolution to the equity situation in sight, and the recent firming of tungsten prices, has the potential to be back in production.
“Based on the reassurances by the Ministries, Premier will report on the finding of the independent review to bring RHA back into production in the coming weeks and look to conclude one of the various funding options as previously announced on 20 July 2018. Simultaneous with this, Premier is also reviewing bulk tests concluded on historic tailings in 2016 based on the much-improved tungsten prices, with a view to possible mitigation of peak funding requirements to get RHA operational,” said Premier chief executive George Roach.
The Board of Premier African Minerals Limited also announced a placing to raise £750,000 before expenses at an issue price of 0,18 pence per new ordinary share.
It has been clear for some time that Premier would need to supplement working capital, in part to support costs associated with the restructuring and ongoing holding costs of the RHA Tungsten Mine which remain vital to bringing RHA back into production expeditiously.
Premier said its proposal has been favourably received by relevant Ministries and the company is looking to de-risk the development of RHA. As such, Premier will begin mobilising the driller with the aim to commence a drilling programme of up to 2,750 meters as soon as possible with the objective of expanding the Resource base as well as increasing the confidence levels of both the open pit and underground Resources.
In addition, the company and its technical consultants are finalising an assessment of the wolframite resources contained in the tailings facility of RHA.
This placement will see Premier fully funded in regard to working capital until December 2018, without any dependency on revenue generated from a possible early return to production, targeted at 6,000 tonne per month at RHA.
“This placement gives Premier a head start at RHA and provides the working capital necessary for the group as a whole. Being able to get the additional drilling started immediately at RHA is likely to add further value to the mine and will guide efficient and effective back-to-production strategies. With the Zulu Lithium and Tantalum Project nearing the completion of the due diligence period,” said Roach.
