Premier African Minerals Regulatory News (PREM)

Premier African Minerals Limited / Ticker: PREM / Index: AIM / Sector: Mining

For immediate release

15 July 2020

Premier African Minerals Limited

Corporate Update

The Board of Premier African Minerals Limited ("Premier" or the "Company") is pleased to provide updates on Premier's projects in Zimbabwe and in respect of the 19% interest in MN Holdings Limited, the owner and operator of the Otjozondu Manganese Mining Project in Namibia "Otjozondu". 

Commenting on this announcement, George Roach CEO noted that, "I am pleased with developments at RHA Tungsten (Pvt) Ltd ("RHA") as set out below, and it is worth noting that a plan to operate the mine on underground ore at 6,000 ton per month does not require the X-Ray Transmission ore sorter ("XRT") and we are actively looking for a suitable alternative use for the XRT in Zimbabwe. Also important is the view of our offtake partner that the recent softening tungsten prices has resulted in mine closures and delays elsewhere in the world and our offtake partner views this as an opportunity for RHA that they are prepared to support as they believe that shortages of tungsten may occur into 2021.

In regard to Otjozondu, whilst export tonnages are limited by the shortage of containers, we are pleased that Otjozondu has reported to us (as described further below) that it has a positive operating margin, that there has been an increase in production at the mine and the confirmation from MNH that it has been provided with pre-payment finance for operational purposes. A resolution of mine-gate to port logistical issues would facilitate an increase in export volumes".

RHA Tungsten (Pvt) Ltd

The Ministry of Industry, Commerce and Enterprise Development ("Ministry") has now confirmed in writing that the directors of RHA previously appointed by National Indigenisation and Economic Empowerment Fund ("NIEEF") should continue to act in that capacity, effectively removing one of the stumbling blocks to finding a mutually acceptable solution to the funding and equity dilemma at RHA. The Ministry had required that the board of RHA be properly constituted before final decisions could be taken by the Ministry and NIEEF in regard to the breach by NIEEF of their agreement to fund the development of a new decline shaft at RHA and the cost to bring the mine back into production.

Premier now intends to convene a meeting of the directors of RHA to agree a variation to the terms of RHA's shareholder agreement such that it would allow Premier to increase its shareholding in RHA unless NIEEF has remedied the ongoing breach under the revised Management Agreement (as announced on 7 May 2019) by providing the outstanding funding on or before the date of the meeting. NIEEF had agreed to invest US$6 million into RHA in accordance with the recommissioning budget, and after converting the RTGS Dollars funding provided by NIEEF into US Dollars, the current shortfall is US$4,942,382, including the further funding of US$108,806 NIEEF agreed to provide as announced on 7 May 2020).

Premier has further agreed with our offtake partner, to independently revalidate the conclusions reached in the Technical Report and Development Plan (as announced on 3 October 2018) that RHA could operate profitably on a reduced throughput of 6,000 ton per month from underground operations undertaken through the existing vertical shaft. On satisfactory conclusion of this review, it is anticipated that our offtake partner will then be in a position to consider fully funding the return to production (estimated to require funding of cUS$1.7 million), subject to resolution of the present impasse with NIEEF as referred to above.

Zulu Lithium and Tantalum

Based on recent communication with the Ministry of Mines and Mining Development, we continue to be encouraged that finality in regard to Premier's Exclusive Prospecting Order ("EPO") application is achievable in the near future. Whilst the lengthy delay has been disappointing, our internal review of the publicly available historic data on the potential prospecting area is encouraging, and we look forward to further updating the market when the EPO is awarded.

Otjozondu

The managers of the mine have provided updates on recent operations, mine production and shipping. The Covid-19 pandemic continues to have an impact. Internal operations have been adversely affected by new mine operating procedures required to limit the potential spread of Covid-19. The mining operational team has adjusted to the new operating procedures and the mine management has informed us that they have recorded no infections, in contrast to certain other manganese producers and that Otjozondu has continued to produce and/or ship manganese throughout the Covid-19 pandemic.

Following the announcement on 26 May 2020, there has been a reduction in the availability of containers for filling with manganese ore and this has limited the actual gross export tonnages of Manganese lump from Otjozondu over the past two months to approximately 4,200 tonnes per month, whilst at the same time mine production of Dressed Ore for export has been in excess of 5,250 tons per month, resulting in a stock pile developing both at the mine gate and at the Okahandja siding.

Mine management have focused, in taking advantage of the improved manganese prices, on the development of Borand Pit B and Pit C that appear to contain previously unidentified fold hinges and duplicated strata in tightly folded areas. The ramping-up of waste mining in anticipation of the higher grade sections of the Borand Pit B and Pit C, the new operating requirement and issues associated with Covid-19 have increased the all-in-cost per metric ton unit inclusive of all shipping costs and selling commissions to US$2.95 per dry metric ton unit "dmtu" while the average selling price for the last two months of shipments has been US$4.60 per dmtu. The operating and trading data in respect of Otjozondu referred to in this section has been provided by Otjozondu management and has not been independently verified by Premier.

Trading Update

Further to the guidance provided by AIM Regulation in "Inside Aim" on 26 March 2020 and as previously announced, the Company was granted an extension of up to three months for the reporting and filing of its financial results for the year ended 31 December 2019, such that it will publish these results as soon as possible, but by no later than 30 September 2020.

As announced on 9 April 2020 and 7 May 2020, the Company entered into secured loan agreements totalling US$490,000 and reached a verbal agreement with Regent Mercantile Holdings Limited for a further extension to the repayment terms of the convertible loan note for US$350,000. The Company subsequently obtained shareholder authority on the 4 June 2020 to issue new ordinary shares to allow, inter alia, for these loan agreements to be settled in shares, although no settlement has yet been made.

The Company manages its cash resources and costs closely and has deferred payment of consultants and directors' fees. The Company intends, as previously announced, to settle outstanding consulting and directors' fees in new ordinary shares. None of these settlements have been made to date. In anticipation of the finalisation of the Zulu EPO and ramping up of the operations team, together with further general working capital needs, Premier will require further funding.

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014. The person who arranged the release of this announcement on behalf of the Company was George Roach.

Qualified Person

Wolfgang Hampel, Senior Geologist with Premier African Minerals Limited, has reviewed and approved this release to the extent that reference is made to the potential prospecting area of the EPO at Zulu Lithium and Tantalum. Mr Hampel has 29 years' experience in the African, American, European and Asian exploration and mining industry and holds a Diploma in Economic Geology (Dipl.-Geol.) from the Technical University of Munich. He is a registered European Geologist (EurGeol). n° 1261 with the European Federation of Geologists

Enquiries:

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, encompassing brownfield projects with near-term production potential to grass-roots exploration. The Company holds 5,010,333 shares in Circum Minerals Limited, the owners of the Danakil Potash Project in Ethiopia, which has the potential to be a world class asset. In addition, the Company holds a 19% interest in MN Holdings Limited, the owner and operator of the Otjozondu Manganese Mining Project in Namibia.

Glossary

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.

ENDS