RNS4 Dec 2019 07:08
Premier African Minerals Limited
Amendment to terms of Loan Agreement to MN Holdings Limited and conversion into an initial direct interest in MN Holdings Limited
The Board of Premier African Minerals Limited ("Premier" or the "Company") is pleased to announce that it has today agreed to amend the terms of the loan agreement concluded on 8 July 2019 ("Loan Agreement") to MN Holdings Limited ("MNH"), the owner and operator of the Otjozondu Manganese Mining Project ("Otjozondu") in Namibia, and has converted the loan into a direct 10% equity interest in MNH.
Highlights:
· Loan Agreement conversion provides Premier with an equity ownership of 10% in MNH
· Independent replacement valuation of total mining equipment at Otjozondu of ZAR 326 million (equivalent to US$22 million), of which only the current running mining equipment at Otjozondu amounted to approximately ZAR 221 million (equivalent to US$15 million)
· Equity interest provides Premier with an important stake in a producing and revenue-generating manganese mine in a stable jurisdiction in Africa
George Roach, Chief Executive of Premier commented, "I expect that this development may be transformational. We believe that Otjozondu is a standout asset in a manganese district. Not only that, there are significant potential synergies and other benefits in this association. Not the least is that Otjozondu is a very well equipped owner-operator open pit mining contractor and this expertise has the potential to complement and reduce operating costs at RHA as soon as RHA is back in production, and Zulu both during exploration and mining phases.
Otjozondu is in the process of increasing production with the integration of the recently acquired additional mining fleet and processing equipment. This production increase builds on a profitable base and Otjozondu will we believe be one of the manganese miners able to lay claim to maintaining ongoing profitable operations and simultaneous production increases at a time when manganese prices are stressed. This is as much a credit to the style of mineralisation that has a high demand, as to the low-cost open pit and high in situ grade of ore and the well managed overhead structure associated with the owner-operator nature of operations.
Furthermore, we believe that the conversion of the Loan Agreement is at an attractive valuation given that the total replacement value of the processing plant and mining equipment at Otjozondu has been independently valued at approximately ZAR 326 million (equivalent to US$22 million), of which only the current running mining equipment at Otjozondu amounted to approximately ZAR 221 million (equivalent to US$15 million), and excluding any other value that may be attributed to mining licences, in situ resources and mining development to date. "
About the Otjozondu Manganese Mining Project
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