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Premier African Mining returns insufficient ore grades for planned profitability
Premier African Minerals announced on Friday that although throughput at its RHA Tungsten plant during the latter part of December had exceeded its target of 6,000 tonnes in aggregate ore feed, the ore processed had predominantly been from on-strike development at a diluted grade and insufficient to achieve planned profitable production.
Management also warned that development to expose stopes had lagged and the mining of undiluted ore from stopes would only be possible from the end of the first quarter, meaning the company would require additional financial support in the meantime.
Premier, which had previously stated it would no longer provide any further financing other than a bridging facility for ready-to-ship concentrate, chose to suspend open pit operations with continuation dependent on the group being provided with an additional source of capital.
The firm advised that it was in discussions with the National Indigenisation and Economic Development Fund, which held a 51% interest in RHA, to agree to alternative financing options.
Premier also announced that it had decided to seek a separate London listing for its Zulu lithium project to maximise its value given the current market valuations for comparable hard-rock lithium projects.
George Roach, Premier's chief executive, said, "In terms of RHA, Premier has been the sole funder of RHA to date, although it only has a 49% interest. The proposed new legislation in Zimbabwe will permit 100% foreign ownership and Premier is therefore currently in discussions with NIEEF, as well as other interested groups, to review alternative financing arrangements that will allow for further external funding for RHA. I remain confident that when RHA is equitably financed, the mine has a sustainable future."
"It is evident that a separate listing of Zulu Lithium has the potential to unlock significant value based on comparable hard-rock lithium projects. I am also pleased to state that Premier intends to distribute a substantial proportion of its retained shares in the separately listed Zulu to Premier shareholders in the most efficient manner at that time to enable them to directly benefit from any value uplift," he added.
As of 1230 GMT, shares had dived 16.91% to 0.220p.