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LONDON (Alliance News) - Premier African Minerals Ltd said Tuesday it has signed a new investment agreement for RHA Tungsten Pvt Ltd with the National Indigenization & Economic Empowerment Fund of Zimbabwe.
Shares in the multi-commodity miner were 9.1% higher in London on Tuesday at 0.12 pence.
Under the agreement, the RHA Tungsten mine in Zimbabwe will see funding of USD6 million, which is expected to bring the mine back into production later in 2019. The funding will allow for the installation of upgrades leading to major cost reductions.
Premier African will continue to manage the mine for another five years through its subsidiary ZimDiv Holdings Ltd, as well as retain control of the plant and equipment.
Premier African holds a 49% interest in the mine and is the operator.
"Whilst it has been a long haul, I am very pleased to be able to report that we have signed a new legally binding agreement with NIEEF that includes a funding undertaking of USD6 million for RHA," said Chief Executive Officer George Roach.
"The investment from NIEEF will be structured as share capital and Premier will simultaneously capitalise an equivalent amount from Premier's existing loan account. In my opinion, this represents both an equitable solution and a good time for the Zimbabwean government to invest directly in this project. RHA has been significantly de-risked over the past 4 years and is now an operation that is better understood," Roach added.