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Premier removes another stumbling block

BY SIMONE LIEDTKE

JOHANNESBURG — Aim-listed Premier African Minerals’ RHA Tungsten project, in Matabeleland North, has received the go-ahead from the Industry, Commerce and Enterprise Development ministry that the directors of RHA should continue to act in that capacity, which effectively removes one of the stumbling blocks to finding a mutually acceptable solution to the funding and equity dilemma at RHA.The directors were previously appointed by the National Indigenisation and Economic Empowerment Fund (NIEEF).

The ministry had required that the board of RHA be properly constituted before final decisions could be taken in regard to a breach by the NIEEF of an agreement to fund the development of a new decline 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 to a variation to the terms of RHA’s shareholder agreement such that it will allow Premier to increase its shareholding in RHA, unless the NIEEF has remedied the on-going breach under the revised management agreement by providing the outstanding funding on or before the date of the meeting.

The NIEEF had agreed to invest $6-million into RHA in accordance with the recommissioning budget, but the current shortfall amounts to more than $4,9 million, says Premier, adding that this includes the further funding of $108 806 that the NIEEF agreed to provide.

However, in the interim, Premier has agreed with its offtake partner to independently revalidate the conclusions reached in the technical report and development plan so that RHA can operate profitably on a reduced throughput of 6 000 t a month from underground operations undertaken through the existing vertical shaft.

It is anticipated that the offtake partner will, upon conclusion of the review, be in a position to consider fully funding the return to production, which is estimated to require funding of about $1,7 million.

This agreement is subject to the resolution of the present impasse with the NIEEF.

Premier CEO George Roach says the offtake partner views the project as an opportunity, owing to the partner’s belief that tungsten shortages may occur into 2021.

Further, while export tonnages are limited by the shortage of containers, Premier says its Otjozondu project has reported a positive operating margin, as well as an increase in production at the mine and the confirmation from MNH that it has been provided with pre-payment finance for operational purposes.

An eventual resolution of mine-gate to port logistical issues should result in an increase in export volumes.
— Mining Weekly

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