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REG - Premier African Min. - Funding of Zulu Project and Update

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RNS Number : 1907P  Premier African Minerals Limited  21 May 2024

21 May 2024

 

Premier African Minerals Limited

 

 Funding of Zulu Project and Update

 

Premier African Minerals Limited ("Premier" or the "Company") is pleased to
announce a subscription today for 781,250,000 new ordinary shares to raise
approximately £1.25 million before expenses at an issue price of 0.16 pence
per new ordinary share primarily for the Zulu Lithium and Tantalum Project
("Zulu").

 

George Roach, CEO, commented, "The Company provided a full discussion on the
Zulu plant performance in our announcement of 8 May 2024. The Company expects
that periodic updates will be provided on the overall plant performance until
such time as a steady of state of continuance production has been achieved,
Premier expects thereafter to begin providing quarterly production reports for
Zulu from Q3 of 2024.

 

Over and above this, we are encouraged with mining operations and the ROM ore
grades that consistently exceed our resource estimate and this is mitigating
for the moment, the ore sorter deficiencies. This also supports the review of
overall operations and production costs and the likely reduced production
costs discussed below.

 

Inspections required as a prelude to export have commenced, and this precedes
any export. We do not expect any delays in regard to export permits required.

 

This was confirmed in recent meetings with Government of Zimbabwe when the
issue of RHA Tungsten Private Limited ("RHA") was also discussed and we are
encouraged that there is now likely resolution of this issue. The rising price
of Tungsten is noted".

 

The Zulu Plant

For the reasons previously reported, Premier replaced the original plant
contractor in March 2024. Whilst the floatation circuit is now capable of
running in a constant and stable state, it will take time to fully remedy the
original design deficiencies in the overall plant and move from what in many
instances are interim fixes to the final operating plant. The current status
on these issues is set out below:

Ore Sorters

Extensive ore sorting test work is about to commence and replacement ore
sorters will be considered thereafter. It remains our preferred outcome that
the original supplier resolves this.

Milling and sizing

During the past week, Zulu has constructed and installed the recommended
header box and gravity feed arrangement for the hydrosizers. Whilst there will
still be some optimisation required, the initial operation suggests that the
plant will run on a single hydrosizer, and this arrangement has resulted in
better optimisation of the mill. The unexpected upside of this is that the
overall plant capacity in respect of the crushers, milling and sizing circuit
is likely to allow for a substantial increase in through put at a lower cost
than would otherwise have been the case with an additional mill.

Magnetic separation and Tantalum recovery

Dense Media Separation based test work on the undersized ore fraction being
stockpiled has completed and laboratory results are awaited to determine
spodumene and tantalum recoverability. At the same time the original equipment
manufacturer for the installed magnetic separation is assisting and working
closely with Zulu.

Floatation Circuit

As this circuit is optimised, there are likely to be further challenges but
with the resolution of each, plant availability, recoveries and concentrate
grade are all improved. We have a long way to go but we remain encouraged by
the facts that we are producing spodumene that is saleable. The design for the
additional conditioning circuit required is complete and most components are
either on site or on order. Projected delivery date to site is expected at end
June 2024 and provided this timeline is met, installation and integration is
expected to require a further 14 days. Normal operations are not expected to
be impacted. This is expected to be the final component to allow recoveries at
design capacity.

Ore body and plant grades

Current operations continue to support our previous comments to the effect
that with development of the open pit, the Company has now been able to
validate the actual pegmatite that is being mined. In-pit evaluation is
undertaken through the sampling of the pegmatite from blast hole drilling and
channel samples cut across the bench. This allows for better reconciliation to
the 5m x 5m x 5m Assay Block Model grades. On the bench level previously
developed and mined, the Indicated Resource grade from the assay block model
was 1.01% Li(2)O while the average grade of the ore hauled to the ROM pad was
1.13% Li(2)O, an approximate 10% increase.

At the same time, as previously reported, with material blended from selective
mining in the EPO area, Li(2)O grades recorded in the ore feed to the
floatation circuit are in the range of 1,1% Li(2)O to 1,8% Li(2)O, and the dry
solids being fed to the spodumene float plant contain between 12% and 25%
spodumene".

Spodumene Concentrate

The term SC6 is used as a price determination point, being the price paid for
spodumene concentrate in which the Li(2)O grade is 6%. Approximately 74% of
the concentrate would then be made up of spodumene. Spodumene concentrate in
any grade more than 4% Li(2)O is saleable with an adjustment to the price p
aid relative to the actual amount of spodumene contained in that bag. It
should be noted that prices are quoted for spodumene concentrates at lower
grades and these prices are in the public domain.

 

It is worth noting that the market for lepidolite is improving and Premier
believes that it is likely that our Mica/lepidolite will sell in the near
future.

 

Financial model

Premier's internal review of production costs (which have not been
independently verified) now indicates an average overall delivered China port
cost per ton of US$834 in for 2024, with future costs on the same basis below
US$800 per ton delivered China port.

 

Premier has engaged an independent engineering consultancy to review this
financial model.

 

Subscription

Premier has today issued by way of a direct subscription ("Subscription"),
conditional on admission, 781,250,000 new ordinary shares of nil par value
("Subscription Shares") at a Subscription price of 0.16 pence per Subscription
Share. The Subscription Shares will, when issued, rank pari passu in all
respects with the existing ordinary shares. CMC Markets UK Plc trading as CMC
CapX, acted as the Company's placing agent in respect of the placing.

 

The Subscription has been arranged within the Company's existing share
authorities. Premier intends to use the proceeds of the Subscription
principally to assist with the ongoing mining operations at Zulu and general
working capital.

 

Contractor Settlement

 

Contractors at Zulu have agreed to accept payment of US$2 million dollars of
invoices, in new ordinary shares of the Company. Accordingly, the Company has
today settled payment of US$2 million (equivalent to £1.57 million) in
invoices through the issue of 983,500,000 new ordinary shares of the Company
at the price of 0.16 pence per ordinary share ("Settlement Shares"). The
Settlement Shares will, when issued, rank pari passu in all respects with the
existing ordinary shares.

 

Any sales of the Settlement Shares will be handled by Premier's brokers under
orderly market conditions with an initial 10-day lockup of the Settlement
Shares.

 

Admission

 

Application is being made for 781,250,000 Subscription Shares and 983,500,000
Settlement Shares, in aggregate 1,764,750,000 new ordinary shares, to be
admitted to trading on AIM and admission is expected to take place on or
around 24 May 2024.

 

Total Voting Rights

 

Following the issue of the Subscription Shares, the Company's issued share
capital consists of 31,381,688,211 Ordinary Shares, with voting rights.

 

This figure may be used by shareholders in the Company as the denominator for
the calculation by which they will determine if they are required to notify
their interest in, or a change to their interest in, the share capital of the
Company under the Financial Conduct Authority's Disclosure and Transparency
Rules.

Competent Persons Statement

Bruce Cumming, a consulting geologist to Premier, has reviewed and approved
this release to the extent that reference is made to the geology and
mineralogy of the Zulu pegmatites. Mr. Cumming is a SACNASP and GSSA
registered geoscientist with 48 years' experience in exploration and project
management, in multicommodity projects throughout Africa.

 

Market Abuse Regulations

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulations
(EU) No. 596/2014 as it forms part of UK Domestic Law by virtue of
the European Union (Withdrawal) Act 2018 ("UK MAR").

The person who arranged the release of this announcement on behalf of the
Company was George Roach.

A copy of this announcement is available at the Company's
website, www.premierafricanminerals.com
(http://www.premierafricanminerals.com/) .

CMC CapX

Brokers and investors wishing to gain access to future CMC Markets
transactions, should register their interest
at https://www.cmcmarkets.com/en-gb/capx
(https://www.cmcmarkets.com/en-gb/capx) .

Enquiries:

 

 George Roach                        Premier African Minerals Limited    Tel: +27 (0) 100 201 281
 Michael Cornish / Roland Cornish    Beaumont Cornish Limited            Tel: +44 (0) 20 7628 3396

                                     (Nominated Adviser)
 Douglas Crippen                     CMC Markets UK Plc                  Tel: +44 (0) 20 3003 8632
 Toby Gibbs/Rachel Goldstein         Shore Capital Stockbrokers Limited  Tel: +44 (0) 20 7408 4090

 

Nominated Adviser Statement

Beaumont Cornish Limited ("Beaumont Cornish"), which is authorised and
regulated in the United Kingdom by the Financial Conduct Authority, is
acting as nominated adviser to the Company in connection with this
announcement and will not regard any other person as its client and will not
be responsible to anyone else for providing the protections afforded to the
clients of Beaumont Cornish or for providing advice in relation to such
proposals. Beaumont Cornish has not authorised the contents of, or any part
of, this document and no liability whatsoever is accepted by Beaumont Cornish
for the accuracy of any information, or opinions contained in this document or
for the omission of any information. Beaumont Cornish as nominated adviser to
the Company owes certain responsibilities to the London Stock Exchange which
are not owed to the Company, the Directors, Shareholders, or any other person.

Forward Looking Statements

Certain statements in this announcement are or may be deemed to be forward
looking statements. Forward looking statements are identified 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 reflect 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.

 Glossary
 "Li(2)O"              Lithium Oxide (Lithia) - an inorganic lithium compound used to assess lithium
                       minerals.
 "m"                   Meter.
 "ROM"                 Run-of-mine.
 "SC6"                 spodumene concentrate.
 "Assay Block Model"   Block modelling refers to a subset of 3D models. Normally, the blocks or cells
                       are measured x by y by z, in metres. In a block model, geological zones are
                       divided into blocks and the tonnage and grade of contained mineral is
                       estimated for each block. The shape of blocks (either cubes or rectangular
                       cuboids) and the estimation methods vary according to the specific
                       requirements of a project.
 "XRT"                 X-ray sorting technique where specific mineral bearing rock can be separated
                       from specific mineral-poor rock and other impurities. This upgrades in metal
                       terms the material feed to the plant and lowers the tonnage of rock requiring
                       processing which results in improved economics for mineral processing
                       operations.

 

Notes to Editors:

Premier African Minerals Limited (AIM: PREM) is a multi-commodity mining and
natural resource development company focused on Southern Africa with its RHA
Tungsten and Zulu Lithium projects in Zimbabwe.

 

The Company has a diverse portfolio of projects, which include tungsten, rare
earth elements, lithium and tantalum in Zimbabwe and lithium and gold
in Mozambique, encompassing brownfield projects with near-term production
potential to grass-roots exploration. The Company has accepted a share offer
by Vortex Limited ("Vortex") for the exchange of Premier's entire 4.8%
interest in Circum Minerals Limited ("Circum"), the owners of the Danakil
Potash Project in Ethiopia, for a 13.1% interest in the enlarged share
capital of Vortex. Vortex has an interest of 36.7% in Circum.

Ends

 

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