(Alliance News) - Premier African Minerals Ltd said Wednesday it has agreed to amend the terms of a loan provided to MN Holdings Ltd, the operator of the Otjozondu manganese mining project in Namibia.
The mining and natural resource company said the loan has been converted into a direct 10% equity interest in MN Holdings following the loan amendment.
The company said the equity interest provides Premier African with an important stake in a producing and revenue-generating manganese mine in a stable jurisdiction in Africa.
In July, Premier African had issued a USD1.0 million loan to MN Holdings, as part of a USD1.4 million total loan provided by Premier African and Cambrian Ltd, with Cambrian providing the other USD350,000. The loan had maturity date of October 1, 2021, and annual interest rate of 10%.
MN Holdings used the loan to purchase equipment to increase production and revenue of Otjozondu mine, which is located 150 kilometres north east of Windhoek, the capital of Namibia.
Otjozondu mine is currently exporting 5,000 tonnes lump ore per month at better than 35% manganese, the company said.
The independent replacement value of total mining equipment at Otjozondu is USD22.0 million, of which only the current running mining equipment amounted to approximately USD15.0 million, Premier African noted.
George Roach, chief executive officer, said: "I expect that this development may be transformational. We believe that Otjozondu is a standout asset in a manganese district."
Premier African shares were down 4.6% in London at 0.12 pence each on Wednesday.
By Loreta Juodagalvyte; loretajuodagalvyte@alliancenews.com
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Premier African Minerals (PREM)