Premier African Minerals Regulatory News (PREM)

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

For immediate release+RDC

8 July 2019

Premier African Minerals Limited

Loan into Otjozondu Manganese Mining Projects in Namibia

Premier African Minerals Limited ("Premier" or the "Company") is pleased to announce a strategic loan by Premier to MN Holdings Limited ("MNH"), the owner and operator of the Otjozondu Manganese Mining Project ("Otjozundu") in Namibia, and the appointment of two key mining executives as consultants to Premier.

Highlights:

· Premier and Cambrian Limited have jointly agreed to Loan to MNH, the owner and operator of the Otjozondu Manganese Mining Project, a total of US$1.35 million with an annual interest of 10%;

· Expansion by Premier into an operating and revenue generating manganese mining operation; and

· Appointment of two key mining executives as consultants to Premier.

George Roach, CEO commented: "Otjozundu is a producing revenue generating manganese mine based in Namibia currently involved in an expansion programme. The loan to Otjozundu will enable it to conclude the purchase of significant additional plant and equipment from the nearby Purity Mine to allow Otjozundu to steadily increase production and revenues. I sincerely expect that this loan may lead to a closer relationship in time with Otjozundu that may be in the best mutual interests of both parties. An additional immediate benefit to Premier is the appointment of Neil Herbert, the Chairman of Otjozundu, and Peter Cunningham as consultants to Premier. In due course, Premier intends to invite both Neil and Peter to join the Board of Premier, subject to the satisfactory completion of standard regulatory checks in compliance with the AIM Rules. These initial appointments are part of the process of enhancing the Company's executive team and creating opportunities to assist Premier in the restructure and diversification of country and commodity risk I have been discussing and have alluded to for some time now.

Premier must move from a company dependent on continuous funding through shareholder support to one that can be revenue producing and start to return value to shareholders. Both Neil Herbert and Peter Cunningham have a demonstrable history of just this and I hope that with their assistance and guidance, Premier will progress to this point as well.

I would also like to update on Premier's projects in Zimbabwe at this time, and in that regard I am pleased to confirm that a further invitation has been received by Zulu Lithium and Tantalum to attend at the Ministry of Mines in Harare later this week for interviews pursuant to the finalisation of our application for an Exclusive Prospecting Order. I am pleased that there are developments at RHA Tungsten Pvt Limited ("RHA") as set out in our recently published accounts, but disappointed that what should be seen as a very positive development, seems to have been misunderstood by some. RHA has not received the full amount of US$ 6 million committed in agreement by the National indigenisation and Economic Empowerment Fund ("NIEEF"), but has last week received RTGS $ 6 million. Importantly, RHA had a number of in-country US$ denominated debts that following the introduction by the Zimbabwe Government of the new RTGS currency last week, are now also re-denominated as RTGS $ debts, at a one-for-one conversion rate. Similarly, the Zimbabwe Ministry of Industry, Commerce and Enterprise Development has subsequently undertaken and confirmed their commitment to the Company on the part of their department, to the return of RHA to production. To the extent that there is any shortfall from the US$6 million commitment, this remains a commitment of the agreement with NIEFF".

Otjozondu Manganese Mining Project

The Otjozundu Manganese Mining Project is located some 150 kilometres north east of Windhoek and is in a well-known and established manganese district that has been largely consolidated under Otjozundu, whose tenements cover an area of approximately 1,367 square kilometres and more than 114 kilometres of strike, of which only 14 kilometres has been explored to the point of declaration of a JORC resource. The area under tenement encloses an historic and successful manganese mining district. Otjozundu operations are continuous from a number of open pits in an owner-miner environment. Processing to the extent necessary is through a crush screen and jig plant. All plant and equipment are owned by Otjozundu. Otjozundu is wholly owned by MNH, which acquired the project from Shaw River Manganese Limited for A$4.952 million in 2018. Otjozundu's current operational profile is as follows:

· Experienced management and operational team with proven operational success;

· Currently exporting 4,500 tonnes lump ore per month at better than 35% Mn, 54,000 tonnes per annum, equivalent to not less than 150,000 dmtu per month

· Marketing contract in place;

· Established road/rail route to Walvis Bay;

· Unused capacity exists in all facets of the operations;

· Historic JORC resource, as set out further in Table 1 below;

· Otjozundu has an anticipated Exploration Target of 30 -50 million tonne grading at 23% - 27% Mn;

· Further exploration potential with further inclusion of the tenements held by Purity Mining;

· Current monthly gross revenue generated exceeds US$750,000.

Table 1: Summary Historic Resource at Otjozundu using a 15% Mn cut-off:

Notes:

1. Mineral Resources have been rounded.

2. Otjozundu is the operator and owns 100% of the Otjozundu licence such that gross and net attributable Mineral Resources are the same. The historic Mineral Resources estimate was independently prepared for the previous owner, Shaw River Manganese Limited, by Cube Consulting Pty in December 2012 who classified and reported the resource in accordance with Reporting of Mineral Resources and Ore Reserves (JORC Code 2004).

3.  Premier has not independently verified or updated the Cube historic resource estimate. No adjustment or update has been made to the historic resource statement for any production by Otjozundu since the historic resource statement was prepared in December 2012.

The loan proceeds will be specifically used by MNH to purchase additional mining fleet and processing equipment, both used and new, from Purity Mining which has operated in an adjacent area.

The new equipment should enable MNH to increase the mining rate, and annualised production is expected to target throughput of 220,000 tonnes lump ore, or not less than 7,7 million dmtu of exports by the end of 2020, which should result in substantially increased gross revenues. MNH believes that there is also the opportunity for further increase in sales through the reprocessing of fines that have been contained in waste dumps at Otjozondu that have been built up since mining commenced in late 1930s.

Terms of Loan

The Company and Cambrian Limited (collectively the "Lenders") have entered into a secured US$1.35 million loan agreement ("Loan Agreement") with MNH, with a maturity date of 1 October 2021 ("Maturity Date"). The annual interest rate payable by MNH on the outstanding loan amount is 10% per annum. In accordance with the Loan Agreement, Cambrian has already provided US$350,000 in cash to MNH and Premier will provide the remaining US$1 million (as Lender) in the form of 1,763,668,430 new ordinary Premier Shares conditionally issued to the equivalent value of US$1,000,000 at an issue price of 0.045p, being the Premier closing share price on 5 July 2019 ("Loan Shares"). The Loan Shares will be subject to an orderly market agreement such that they may subsequently only be sold by MNH through the Company's broker to ensure an orderly market is maintained.

Under Premier's existing share authorities, Premier can only issue 1,009,889,850 Loan Shares at a value of £454,450 ("First Loan Shares"). Premier will have 30 days from the date of this announcement to issue the balance of 753,778,580 Loan Shares at a value of £339,200 ("Second Loan Shares"), or settle, at Premier's absolute election, in cash. Premier is intending to convene its annual general meeting at which Premier will seek an increase to its authorised share capital. In the event that Premier is unable to settle the remaining loan amount, either in shares or cash, the Second Loan Shares will not be issued, and the Loan Agreement amount will be reduced by the value of the Second Loan Shares. Otjozundu has provided a number of warranties and undertakings to the Lenders. The Loan Agreement is secured over MNH's assets (including the assets being purchase).

With effect from 1 January 2020, and on the first trading day of every month thereafter until the Maturity Date, MNH will repay a minimum of 10% of all outstanding amounts under the Loan to the Lenders

Consultants

Premier has agreed terms with Cambrian Limited whereby Mr. Neil Herbert ("Mr. Herbert") will be engaged as an independent consultant to advise the Premier Board. Mr. Herbert's role will be focused on potential third-party strategic investors and further potential restructuring, all intended to develop Premier existing assets and regenerate shareholder returns.

Mr. Herbert is a Fellow of the Association of Chartered Certified Accountants and nearly three decades of experience in finance. Mr. Herbert trained with PwC and has been involved in growing mining ventures, both as an executive (including Antofagasta plc, Brancote Holdings plc and UraMin Inc.) and as a manager of investments (including Galahad Gold plc and Polo Resources Limited). Mr Herbert has served as a director of companies on the AIM, ASX, LSE, JSE and TSX and was previously a director of Premier between 20 August 2013 and 22 April 2016. Today, Mr. Herbert works with growth companies across sectors and he is chairman of IronRidge Resources, Helium One, Siderian Resource Capital and the acting Chairman of MNH and its subsidiaries which operate the Otjozondu Manganese Mining Project.

Premier has further agreed terms with Mr. Peter Cunningham ("Mr. Cunningham") for his engagement as an independent consultant to advise the Premier Board. Mr. Cunningham's role will be focused on potential third-party strategic investors to develop Premier existing assets and also to investigate new potential exploration and mining assets for Premier.

Mr. Cunningham is a highly qualified mining engineer with over 35 years of experience in mine development and management in Australia, Asia and Africa. He has extensive prior experience being at Senior Executive and Board levels. He was the Managing Director of Bluestone Tin and Auvex Resources LTD and an Executive Director at Hill 50 Gold NL, Abelle Ltd and Shaw River Manganese, the previous owners of the Otjozondu Manganese Mining Project.

In due course, Premier intends to invite both Mr. Herbert and Mr, Cunningham to join the Board of Premier, subject to the satisfactory completion of standard regulatory checks in compliance with the AIM Rules.

Admission to AIM and total voting rights

The Loan Shares will, when issued, rank pari passu in all respects with the existing ordinary shares. Application will be made for the First Loan Shares to be admitted to trading on AIM and admission is expected to take place on or around 12 July 2019. Conditional in shareholder approval, application will be made for the Second Loan Shares to be admitted to trading on AIM following the general meeting of the Company (to be convened).

Following the issue of the First Loan Shares, the Company's issued share capital consists of 9,000,000,000 Ordinary Shares, with voting rights. This figure may be used by shareholders in the Company as the denominator for the calculation by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company under the Financial Conduct Authority's Disclosure and Transparency Rules.

MNH - Further AIM disclosures

MNH was incorporated in 23 February 2017 in Mauritius. MNH acquired the entire issued share capital of Shaw River Mauritius from Shaw River Manganese Limited for A$4.952 million in early 2018. Shaw River Mauritius indirectly owns the entire issued share capital of Otjozundu Mining (Pty) Limited ("Otjozundu"), a Namibian incorporated entity which owns and operates the Otjozondu Manganese Mining Project. MNH has not published any results since incorporation as it acts solely as the holding company for purpose of acquiring Shaw River Manganese Limited.

The last reported accounts for Otjozundu are for the year ended 30 June 2018, for which revenue amounted to N$27.0 million (equivalent to US$1,944,000) and the operating loss before tax (and interest charges to group companies) was N$(0.3) million (equivalent to US$21,600). Total assets as at the same date amounted to N$(14,277,771) million (equivalent to US$1,028,000).

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.

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. In addition, the Company holds 5,010,333 shares in Circum Minerals Limited ("Circum"), the owners of the Danakil Potash Project in Ethiopia, which has the potential to be a world class asset.

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.

Qualified Person

Gerard Evans, Resource Geologist for Premier African Minerals, has reviewed and confirmed the technical detail set out herein in respect of Otjozundu is in line with the information provided by MN Holdings Limited. Gerard Evans has 27 years' experience in mining industry specialising in resource geology and holds a B.Sc Hons degree in geology from the University of the Witwatersrand. He is registered member of SACNASP (400015/08), GSSA and GASA.

ENDS