Premier African Minerals Regulatory News (PREM)

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

For immediate release

30 September 2020

Premier African Minerals Limited('Premier' or 'the Company')

Unaudited Interim Results for the six months ended 30 June 2020

Chief Executive Statement

Dear Shareholders,

It is a pleasure to share with you the interim results for the six months ended 30 June 2020.

The first six months of 2020 (the "Period") has been extensively reported as post financial year end events in our annual financial statements that were released earlier today.

I wish to reaffirm to shareholders that the Company's ongoing focus is:

· To continue to engage directly with MN Holding Limited;

· Look to acquire cash generative assets;

· Resolve the status in Zimbabwe, either that the Exclusive Prospecting Order is granted at Zulu and Tantalum Project or RHA Tungsten (Pvt) Ltd equity and funding is resolved or seek a potential disposition of these assets; and

· Identify and secure high value exploration targets in other jurisdiction.

Financial and Statutory Information

The Group had an operating loss of US$0.649 million for the six months. Premier received continued financial support from a major shareholder throughout the year. Premier is committed to reduce its debts and restrict capital expenditure to our focus objectives as set out above.

The operating loss for this period is mainly due to the costs associated with maintaining the listing status, which is made up of administrative fees, retainers to advisors and essential Premier operational expenditure.

It is important to note that in the period post June 2020, Premier has significantly reduced its overall liabilities by US$1.4 million through a combination of debt conversion and other settlement agreements and this assists in positioning the Company to achieve the objectives set out above.

These interim statements to 30 June 2020 have not been reviewed by the auditors.

Mr. George RoachChief Executive Officer30 September 2020

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.

This announcement contains inside information for the purposes of Article 7 of EU Regulation No. 596/2014 on market abuse. Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain. The person who arranged the release of this announcement on behalf of the Company was George Roach.

For further information please visit www.premierafricanminerals.com or contact the following:

CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION

EXPRESSED IN US DOLLARS

CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME

EXPRESSED IN US DOLLARS

CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY

EXPRESSED IN US DOLLARS

CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS

EXPRESSED IN US DOLLARS

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

1. GENERAL INFORMATION

Premier African Minerals Limited ('Premier' or 'the Company'), together with its subsidiaries (the 'Group'), was incorporated and domiciled in the Territory of the British Virgin Islands under the BVI Business Companies Act, 2004. The address of the registered office is Craigmuir Chambers, PO Box 71, Road Town, Tortola, British Virgin Islands. Premier's shares were admitted to trading on the London Stock Exchange's AIM market on 10 December 2012.

The Group's operations and principal activities are the mining, development and exploration of mineral reserves, primarily on the African continent. The presentational currency of the condensed consolidated interim financial statements is US Dollars ("$").

2. BASIS OF PREPARATION

These unaudited condensed consolidated interim financial statements for the six months ended 30 June 2020 were approved by the Board and authorised for issue on 30 September 2020.

These interim financial statements have been prepared in accordance with the recognition and measurement principles of the International Financial Reporting Standards ("IFRS") as endorsed by the EU.

The accounting policies applied in the preparation of these consolidated interim financial statements are consistent with the accounting policies applied in the preparation of the consolidated financial statements for the year ended 31 December 2019.

The figures for the six months ended 30 June 2019 and 30 June 2020 are unaudited and do not constitute full accounts. The comparative figures for the year ended 31 December 2019 are extracts from the 2019 audited accounts. The independent auditor's report on the 2019 accounts was qualified but included an emphasis of matter relating to going concern.

Going Concern

The Directors have prepared cash flow forecasts for the next 12 months, taking into account working capital and expenditure forecasts for the rest of the Group including overheads and other development costs.

The forecasts include additional equity finance which the directors believe can be met. In the event that the Company is unable to obtain additional equity finance for the Group's working capital, a material uncertainty exists which may cast significant doubt on the ability of the Group to continue as a going concern and therefore be unable to realise its assets and settle its liabilities in the normal course of business.

3. SEGMENTAL REPORTING

Segmental information is presented in respect of the information reported to the Directors. The segmental information reports the revenue generating segments of RHA Tungsten (Pvt) Ltd ("RHA"), that operates the RHA Tungsten Mine, and Zulu Lithium (Pvt) Ltd ("Zulu"). The RHA segment derives income primarily from the production and sale of wolframite concentrate. All other segments are primarily focused on exploration and on administrative and financing segments. Segmental results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.

As at the reporting date, the company has significant holdings in Zimbabwe. As indicated in the audited annual financial statements, the Zimbabwean government mandated that with effect of 1 March 2019 the only functional currency is the RTGS Dollar. Since the introduction of RTGS Dollars the Zimbabwean inflation rate has gone into hyperinflationary percentages. Hyperinflationary accounting requires a restatement of the local currency assets and liabilities to reflect the effect of the hyperinflation before translating the local currency to the reporting currency. Refer to the audited annual financial statements of 31 December 2019 for more detailed information. 

* Represents 100% of the results and financial position of RHA Tungsten (Private) Limited ("RHA") whereas the Group owns 49%.

4. INTANGIBLE EXPLORATION AND EVALUATION ASSETS

During the period to 30 June 2020 $ Nil was capitalised to the Zulu (six months to 30 June 2019: $ Nil, year to 31 December 2019: $ Nil).

Exploration work conducted on Zulu during prior periods indicated that both lithium and tantalum recovery may be a viable option. The Group views this project as strategic and exploration work will be continued in the future, cash flow permitting.

5. INVESTMENTS

Premier's investment in Circum Minerals Limited ('Circum') was designated as FVOCI as such is required to be measured at fair value at each reporting date. As Circum is unlisted there are no quoted market prices. The fair value of Circum shares was derived using the previous issue price and validating it against the most recent placing price on 30 April 2019. The shares are considered to be level 3 financial assets under the IFRS 13 categorisation of fair value measurements. We continue to hold 5 010 333 shares in Circum currently valued in total at $6.263 million.

Premier's investment in MN Holdings ('MNH') is classified as an FVOCI as such is required to be measured at fair value at the reporting date. As MNH is unlisted there are no quoted market prices. The Fair value of the MNH shares as at 30 June 2020 and 31 December 2019 was derived using the purchase price in July 2019.

6. PROPERTY, PLANT AND EQUIPMENT

7. BORROWINGS

Borrowings comprise loans from a related party and a non-related party.

1) On the 9th of April 2020 the company announced the conclusion of a loan instrument of US$0.200 million with a company owned by a Trust of which George Roach is a beneficiary, for a gross value of US$0.200 million. The proceeds of the New Loan will be used to support ongoing development and provide additional general working capital for the Company. The annual interest rate payable on the outstanding amounts under the New Loan is 10% per annum.

2) On the 7th of May 2020 Premier announced the conclusion of an investment agreement of US$0.290 million before costs with D-Beta One EQ, Ltd ("D-Beta"), YA II PN, Ltd ("YA") and Riverfort Global Opportunities PCC Limited ("Riverfort"). The annual interest rate payable on the outstanding investment amount is 10%. The principal amount (plus any accrued interest) under the Investment Agreement is repayable six months from the date of this announcement. The proceeds of the Investment Agreement will be used to reduce existing liabilities and general working capital for the Company.

8. SHARE CAPITAL

Authorised share capital

Authorised share capital

At the Annual General Meeting held on 5th August 2019, the shareholders approved the following:

1) the removal of the restrictions on the number of no-par value ordinary shares of a single class that the Company is authorised to issue; and

2) for the period commencing twenty-four (24) months following the date of the above general meeting, the disapplication of the pre-emption provisions in Company's articles of association in relation to the issue of up to six billion and five hundred million (6 500 000 000) ordinary shares.

The total number of voting rights in the Company on the 30 June 2020 was 11 935 375 754.

Issued share capital

Reconciliation to balance as stated in the consolidated statement of financial position

9. OTHER INCOME

10. FOREIGN EXCHANGE GAINS AND LOSSES

As indicated in note 3. Segmental Reporting, the company has significant holdings in Zimbabwe. With effect from the 1st of March 2019, the Zimbabwean government mandated that the only functional currency is RTGS Dollar. Since the introduction of RTGS Dollar the currency has devalued from the introductory rate of RTGS Dollar 1: $ 1 to RTGS Dollar 57.3582 at 30 June 2020 (RTGS Dollar 6.622 - 30 June 2019). This currency has continued to devalue in the period to 30 September 2020. As defined in IAS29, the Zimbabwean economy is considered to be hyperinflationary. As most of the group's Zimbabwean assets have been impaired the result in liabilities are adjusted for the hyperinflationary effect. This leads to a net gain on translation into the reporting currency. For further information refer to the audited financial statement of 31 December 2019.

11. TAXATION

There is no taxation charge for the period ended 30 June 2020 (30 June 2019 and 31 December 2019: Nil) because the Group is registered in the British Virgin Islands where no corporate taxes or capital gains tax are charged. However, the Group may be liable for taxes in the jurisdictions of the underlying operations.

The Group has incurred tax losses in Zimbabwe; however, a deferred tax asset has not been recognised in the accounts due to the unpredictability of future profit streams.

Contingent liability

The Group operates across different geographical regions and is required to comply with tax legislation in various jurisdictions. The determination of the Group's tax is based on interpretations applied in terms of the respective tax legislations and may be subject to periodic challenges by tax authorities which may give rise to tax exposures.

12. LOSS PER SHARE

The calculation of loss per share is based on the loss after taxation attributable to the owners of the parent divided by the weighted average number of shares in issue during each period.

As the Group incurred a loss for the period, there is no dilutive effect from the share options and warrants in issue or the shares issued after the reporting date.

13. EVENTS AFTER THE REPORTING DATE

1) RHA Tungsten (Pvt) Ltd ("RHA")

The Ministry of Industry and Commerce ("Ministry"), acting on behalf the National Indigenisation and Economic Empowerment Fund (NIEEF) confirmed in July 2020 that the previously appointed directors of RHA could now continue to act in their capacity as directors on behalf of NIEEF. This has resulted in the removal of an ongoing stumbling blocks to finding a mutually acceptable solution to the funding and equity dilemma at RHA as the Ministry required that the board of RHA be properly constituted before final decisions could be taken on how this wish to proceed with RHA .

2) Zulu Lithium and Tantalum ("Zulu")

Communication received during July 2020 from the Ministry of Mines and Mining Development, reaffirmed Premier view that finality regarding the conclusion of the procedural process of Premier's Exclusive Prospecting Order application will be concluded in the near future.

3) Corporate matters

In June 2020, Premier entered into a conditional sale and purchase agreement to acquire a portfolio of hard-rock lithium assets located in Zimbabwe and Mozambique from Lithium Consolidated Ltd ("Li3") following Li3's strategic shift of focus to their Australian based projects. Premier conditionally agreed to purchase the Li3 African projects for a gross consideration of AUD$ 150 000, (approximately US$104 000) that was to be satisfied through issuance of new ordinary in Premier. Premier completed the purchase in July 2020 by the issuance of 124 512 702 in favour of Li3.

On 24 July 2020, the Company received a notice of exercise by Regent to convert their loan plus accrued interest in the amount of US$390 040.92 (£305 836.77) in accordance with the terms of the loan agreement as announced on the 21 June 2019 into new ordinary shares in the Company. The Company therefor has issued 431 241 920 new ordinary shares to Regent at an issue price of 0.07092p per share.

On 27 July 2020, the Company received a notice of exercise by D-Beta One EQ, Ltd, YA II PN, Ltd and Riverfort Global Opportunities PCC Limited, collectively referred to as the ("Investors") to convert US$50 000 of the investment plus accrued interest of US$6 276.71, amounting to US$56 276.71 (£44 115.31) in accordance with the terms of the loan agreement as announced on the 7 May 2020 into new ordinary shares in the Company. The Company therefor has issued 70 426 740 new ordinary shares to the Investors an issue price of 0.062640p per share.

On 30 July 2020, the Company received a notice of exercise by the company owned by a trust of which George Roach is a beneficiary to convert the loan, plus accrued interest, amounting to US$206 027 (£159 131.07) in accordance with the terms of the loan agreement as announced on the 9 April 2020 into new ordinary shares in the Company. The Company therefor has issued 232 647 763 new ordinary shares to the company an issue price of 0.0684 per share.

On 11 August 2020, the Company received a notice of exercise by the Investors to convert a further US$50 000 of the investment plus accrued interest of US$1 183.56, amounting to US$51 183.56 (£39 165.66) in accordance with the terms of the loan agreement as announced on the 7 May 2020 into new ordinary shares in the Company. The Company therefor has issued 64 470 222 new ordinary shares to the Investors an issue price of 0.06075p per share.

On 11 August 2020, the Company issued new ordinary shares to Directors, employees, and other creditors in settlement of accrued but unpaid contractual amounts due, amounting in aggregate to £337 428. The Company issued 374 920 533 new shares in settlement of accrued but unpaid fees at an issue price of 0.09p per share.

On 18 August 2020, the Company received a notice of exercise by the Investors to convert a further US$50 000 of the investment plus accrued interest of US$312.33, amounting to US$50 312.33 (£38 388.31) in accordance with the terms of the loan agreement as announced on the 7 May 2020 into new ordinary shares in the Company. The Company therefor has issued 62 450 479 new ordinary shares to the Investors an issue price of 0.06147p per share.

On 21 August 2020, the Company received a notice of exercise by the Investors to convert a further US$75 000 of the investment plus accrued interest of US$1 189.04, amounting to US$76 189.04 (£58 810.32) in accordance with the terms of the loan agreement as announced on the 7 May 2020 into new ordinary shares in the Company. The Company therefor has issued 125 905 202 new ordinary shares to the Investors an issue price of 0.04671p per share.

4) MN Holdings Limited ("MNH")

On the 15th July 2020, the managers of the mine 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 Otjozondu has continued to produce and/or ship manganese throughout the Covid-19 pandemic.