LONDON — Shares in Premier African Minerals shot ahead as it concluded an indigenisation agreement with the Zimbabwe authorities for tungsten arm RHA.
Zimbabwe’s National Indigenisation and Economic Empowerment Fund (NIEEF) will hold 51% of RHA after the deal, though Premier’s subsidiary ZimDiv will manage the project for an initial five years.
Premier will convert all expenditure so far into a loan. RHA is now responsible for all of its own funding and Premier and NIEEF are under no obligation to pay for any of its future exploration and development costs.
Once RHA has moved in to commercial production, Premier will issue $750 000 worth of shares to NIEFF.
George Roach, Premier’s chief executive, said: “The early completion of the agreements is indicative of the excellent relationship and mutual understanding that we have enjoyed with NIEEF for some time now.
“In particular, that RHA is responsible for its own development costs both eases the burden on Premier and broadens the sources from which finance will be available to develop the project into a low-capex tungsten mine in the near term.
“We are in advanced negotiations on an off-take and project finance and we have committed to the additional confirmatory work suggested in the recently published Mining Study and Preliminary Economic Assessment.”
Premier is confident the Kamativi tungsten is ripe for development after a positive exploration update.
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The company plans to move into production potentially before the end of 2013.
Premier has an interesting, exploration-stage portfolio covering tungsten, rare earth, phosphates, nickel and gold.
Its last update focused on the company’s flagship RHA Tungsten deposit in the Kamativi Tin Belt, where two previously unknown, well-mineralised quartz veins have been discovered.
— Proactive Investors
