(Alliance News) - The Zimbabwean government has designated Premier African Minerals PLC's RHA tungsten project in the country as a "priority" project.
The order to electrify the project has been given, Premier African said, with essential works to begin "immediately". This includes repair works as well as plant upgrades.
The firm in late June received USD6 million from Zimbabwe's National Indigenisation & Economic Empowerment Fund to re-open the project.
Chief Executive George Roach said: "We believe the value of the in-country funds provided by the Zimbabwe government to support this project has still been generally misunderstood. For example, the Zimbabwe Electricity Supply Authority has now quoted to electrify the mine at a price which is only approximately 30% greater in RTGS dollars than the original quotation that was denominated in US dollars.
"And, approximately RTGS1 million has the ability to discharge debts of RHA previously incurred in Zimbabwe of approximately USD1 million."
"Whilst it is not certain the funds provided to date will be sufficient to bring RHA back into production as planned, it is certain the payment by RHA of local operating costs within Zimbabwe has not been seriously adversely affected by the funding in RTGS dollars, particularly in regard to transactions involving state-owned entities," Roach continued.
"And on the basis that RHA will seek to delay a decision to construct the planned decline shaft, any shortfall of funds is expected to be further limited."
The investment came after Zimbabwe on Monday banned the use of foreign currencies in the southern African country, reintroducing its own currency, the RTGS, or Zimbabwean dollar.
Premier African shares were 13% higher on Wednesday morning in London at 0.040 pence each.
Premier African Minerals (PREM)