Premier African Minerals Regulatory News (PREM)

29 September 2023

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

Unaudited Interim Results for the six months ended 30 June 2023

Chief Executive Statement

Dear Shareholders,

I believe this will be the last time that I potentially report Interim Results that do not include details of cash generative operations. The six months to 30 June 2023 have been difficult and this has been widely reported in various announcements over the past 4 months. The plant did not achieve name plate throughput production as per the original design and our relationship with Canmax Technologies Co. Ltd ("Canmax") came under severe duress. That said, the outcome in the past month has the hallmarks of setting aside all that disappointment and with the completion of the installation of the RHA mill and restarting operations in the latter part of September 2023, we expect to meet the production target for shipments in November 2023. At the same time, this use of the RHA mill only allows for up to 50% of target production and the supply of a new mill to meet full design throughput is expected ex works in Q4 of 2023. This is expected to be installed and commissioned in early Q1 of 2024 following a two-week installation shutdown that we plan to coincide with the festive break.

The first six months activity of 2023 (the "Period") has been extensively reported as post financial year end events in our annual financial statements that were released just a few months ago.

Our interim financial statements for the period to 30 June 2023 are attached. Of particular note is the substantially improved financial position of the company.

Financial and Statutory Information

The Group incurred an operating loss of US$7.166 million for the six months ended 30 June 2022. The loss was principally due to the on-going overheads and administration costs associated with the construction, installation and optimisation of the Zulu Lithium mine in Zimbabwe. Cash at hand on 30 June 2023 was $0.231 million.

Premier received continued financial support from its shareholders and Canmax throughout the period.

These interim statements to 30 June 2023 have not been reviewed by the auditors.

Mr. George RoachChief Executive Officer29 September 2023

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.

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 as it forms part of UK Domestic Law by virtue of the European Union (Withdrawal) Act 2018.

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

ONDENSED 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 2023 were approved by the Board and authorised for issue on 29 September 2023.

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 UK. 

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 2022.

The figures for the six months ended 30 June 2023 and 30 June 2022 are unaudited and do not constitute full accounts. The comparative figures for the year ended 31 December 2022 are extracts from the 2022 audited accounts. The independent auditor's report on the 2022 accounts was unqualified.

Going Concern

The Directors have prepared cash flow forecasts for the next 12 months, taking into account working capital, Zulu revenue and expenditure forecasts for the rest of the Group including overheads and other exploration costs. As previously announced, certain contractors also agreed to collectively accept payment of a limited number of future invoices until the end of December 2023 in new ordinary shares of the Company at the closing middle market price on the day prior to settlement which is included in the forecasts.

The forecasts assume that the Company will commence generating revenue later this calendar year, which the directors believe can be met. In the event that revenue generation is delayed for any reason, the Company may require further funding and, if the Company is unable to obtain additional finance for the Group's working capital and capital expenditure requirements, a material uncertainty may exist which could 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 Private Limited ("RHA"), that operates the RHA Tungsten Mine, and Zulu Lithium Private Limited ("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 2022 for more detailed information.

* Represents 100% of the results and financial position of RHA whereas the Group owns 49%.

4. INTANGIBLE EXPLORATION AND EVALUATION ASSETS

5. INVESTMENTS

During the six months ended 30 June 2022, Premier sold its shares in Circum Minerals Limited ("Circum"), together with other minority shareholders, to Vortex Limited ("Vortex") in exchange for an equal value investment in Vortex. Premier's investment in Vortex / Circum was designated as FVOCI. As such the investment is required to be measured at fair value at each reporting date. As Vortex / Circum is unlisted there are no quoted market prices. The fair value of Vortex shares was derived using the previous issue price of Circum shares and validating it against the most recent placing price on 11 May 2021. The shares are considered to be level 3 financial assets under the IFRS 13 categorisation of fair value measurements. Premier continues to hold 5 010 333 shares in Vortex / Circum currently valued in total at $0.501 million.

Premier's investment in MN Holdings Limited ('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 2023 and 31 December 2022 was based on most recent unaudited financial statements of MNH. These financial statements showed significant operating losses. Accordingly, Premier's investment in MNH has been fully impaired as at 31 December 2022.

6. PROPERTY, PLANT AND EQUIPMENT

7. LOANS RECEIVABLE

The above loans to Outback Investments (Pty) Ltd and Otjozondu Mining (Pty) Ltd were made to a subsidiary and a related party of MN Holdings (Pty) Ltd ("MNH") and were held at amortised cost. The loans were fully impaired as at 31 December 2022.

The purpose of the Outback Investments Pty Ltd loan was to enable MNH to lease and acquire the remaining extent of the Ebenezer No 377 Farm which contains untreated tailings facilities from the Purity Mining Project as announced on the 8th of July 2019. The loan will be forgiven following the uninterrupted use of the farmland for the treatment of the tailing facilities for a period of up to 10 years. During this period Premier has rights to these tailings facilities. The loan is interest free. The loan is only repayable upon default by Outback Investments.

The loan to Otjozondu Mining (Pty) Ltd was to assist with funding the day-to-day operations and is in accordance with the announcement dated of 31 August 2021. Premier provided a loan of $265,000 which bears interest of 20% and is repayable in instalments of $25,000 per shipment of manganese shipped from Namibia. The balance of $180,000 has been provided interest free as it is linked to the loan from Neil Herbert, further details of which are set out in note 8 below.

8. BORROWINGS

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

Neil Herbert, a former director of the Company, made available a loan of US$180,000 to the Company in August 2021. Under the terms of the Director Loan, the loan is both unsecured and will not attract any interest and is repayable in full by the Company on the signing of a new off-take agreement at Otoconium. The purpose of the Director Loan was to provide funding to Premier to allow an amendment to the Otoconium Loan while Premier, acting collectively with Otoconium, looked to secure the best possible off-take funding package.

At 30 June 2023 the off-take funding had not been secured and Mr. Herbert has agreed to the deferment of the repayment of the loan until such off-take agreement has been secured.

Premier entered into a joint venture agreement with Li3 Lithium Corp (Li3) for the purpose of prospecting for additional lithium bearing ore in Zimbabwe. The net investment by Li3 represents the net amount due to Li3 after apportioning all expenses and amounts invested by both Premier and Li3.

9. SHARE CAPITAL

Authorised share capital

The total number of voting rights in the Company on the 30 June 2023 was 22,836,049,123.

Issued share capital

10. OTHER INCOME

11. 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 ofRTGS Dollar 1: US$ 1 to RTGS Dollar 5,739.7961 at 30 June 2023 (RTGS Dollar 370.9646 at 30 June 2022). This currency has continued to devalue. 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 2022.

12. TAXATION

There is no taxation charge for the period ended 30 June 2023 (30 June 2022 and 31 December 2022: 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. 

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.

13. 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.

14. EVENTS AFTER THE REPORTING DATE

Offtake and Prepayment Agreement

On 15 August 2023, the Company agreed with Canmax to amend and restate the Offtake and Prepayment Agreement which the parties had previously agreed in August 2022 ("Amended Agreement"). The Amended Agreement restored the working arrangements between Premier and Canmax and the Force Majeure and default notices were withdrawn by the respective parties. The major and essential elements of the Amended Agreement remained the same as the original agreement entered into in August 2022, save that the parties agreed:

Director Loan

On 21 July 2023, the Company announced that it had agreed an unsecured £1.7 million Loan Facility Agreement with George Roach ("Facility"). On 9 August 2023, Premier and George Roach agreed to vary the Facility by increasing the size of the Facility from £1.7 million to £2 million and to waive any interest on a repayment by Premier of the Facility in cash ("Amended Facility"). Premier and the Lender further agreed that Premier would make one request of a draw-down under the Amended Facility in the amount of £2 million.

On 18 August 2023, Premier announced that the Company had received total net proceeds of £1,708,532.51 from the sales of 370,000,000 Premier Ordinary Shares by George Roach at an average price 0.4513 pence per share, in accordance with the Facility. The Company and George Roach agreed that no further shares would be sold by George Roach under the Facility and that, upon settlement of the repayment of the existing amounts outstanding under the Facility by the issue of the new Premier Ordinary Shares, the Facility would be terminated with immediate effect.

Funding

On 25 August 2023, the Company announced a placing and subscription to raise £4 million before expenses at an issue price of 0.35 pence per new ordinary share for the ongoing Zulu Pilot Optimisation.

On 30 August 2023, the Company announced a conditional subscription for new ordinary shares by Canmax to raise £5 million before expenses at an issue price of 0.35 pence per new ordinary share for the ongoing Zulu Pilot Optimisation.

ENDS