Premier African Minerals Limited / Ticker: PREM / Index: AIM / Sector: Mining
For immediate release
13 October 2014
Premier African Minerals Limited
("Premier" or the "Company")
RHA Tungsten Preliminary Economic Assessment Update
Premier African Minerals Limited, the AIM-traded, multi-commodity natural resource company with mineral projects located in Western and Southern Africa, provides details of the updates prepared by Bara Consulting to the Preliminary Economic Assessment ("PEA") in regard to the RHA Tungsten project in Zimbabwe in respect of which Premier is the operator and holds a 49% interest.
Highlights
· Life of mine extended to 15 years
· Pre-tax project net present value ("NPV") at 5% $183m
· Internal rate of return ("IRR") of 455%
· Early infrastructure works have commenced
George Roach, CEO, commented:
"This update to our September 2013 Preliminary Economic Assessment ("PEA") takes into account recently announced mineral resource increases, final metallurgical studies and test work and a number of other important trade-off and optimisation studies and whilst still at PEA status, reflects a substantial increase in the confidence levels of the project. We expect to provide more details of the low capital, near term production options we plan to implement in the near term."
Financial Model
The financial model further incorporates a firm quotation from Appropriate Process Technologies for fabrication and installation of the process plant, updated process operating costs, results of pit optimisation conducted by CAE, updated product pricing and allowance for sustaining capital to accommodate the longer mine life projected.
The updated PEA is available for download from the Company's website, www.premierafricanminerals.com.
The results of the updated model compared to the 2013 PEA is tabulated below.
COMPARISON OF MODEL RESULTS |
Item |
PEA 2013 |
Revised Model 2014 |
Life of Mine (Years) |
6 |
15 |
Average Head grade( kg/t) |
7.51 |
6.97 |
Plant Recovery (%) |
85.0 |
82.8 |
Concentrate produced (t) |
8,908 |
23,907 |
Contained WO3 produced (t) |
5,790 |
15,051 |
Price (US$/MTU) |
320.00 |
288.60 |
Revenue (US$ million) |
185.3 |
434.7 |
Operating cost (US$ million) |
51.7 |
145.9 |
Capital cost, Project (US$ million) |
11.2 |
12.8 * |
Capital cost, Sustaining (US$ million) |
0 |
3.2 |
Contingency |
2.2 |
2.3 |
Net Cash flow (US$ million) |
120.1 |
270.5 |
NPV at 5% discount rate (US$ million) |
99.3 |
183 |
IRR (%), Pre‐tax |
378 |
455 |
Note: * Project capital includes underground capital development costs prior to u/g ore production of US$3.3 million, (Including US$1 million for waste development which was included in operating costs in the PEA 2013), and US$0.7 million for contractor mobilization previously included in contractor costs in the PEA 2013.
Bara Consulting has consented to the publication of this PEA.
Qualified Person
Werner Swanepoel, Chief Operating Officer of Premier, has reviewed and approved this release based on the reports provided by Bara Consulting and the attachments thereto that are available for download from the Premier website. Mr Swanepoel has 20 years' experience in the Southern African mining industry and holds a Master's degree in Mining Engineering, an MBA and Mine Manager's Certificates in both Metalliferous and Coal Mining. He is a registered Professional Engineer with the Engineering Council of South Africa.
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.
Enquiries
Pamela Hueston |
Premier African Minerals Limited |
Tel: +44 (0) 755 778 3855 |
Michael Cornish / Roland Cornish |
Beaumont Cornish Limited (Nominated Adviser) |
Tel: +44 (0) 207 628 3396 |
Jerry Keen/ Edward Mansfield |
Shore Capital Stockbrokers Limited |
Tel: +44 (0) 207 408 4090 |
Tim Blythe/ Halimah Hussain |
Blytheweigh |
Tel: +44 (0) 207 138 3204 |
Notes
Premier African Minerals Limited (AIM: PREM) is a multi-commodity exploration and development company focused in Southern and West Africa. The Company has a diverse portfolio of multi-commodity projects which includes tungsten, rare earth elements, gold, lithium and tantalum in Zimbabwe and Togo, which span from brownfield projects with near-term production potential to grass-roots exploration. The Company holds 2m shares in Circum Minerals Limited, the owners of the Danakil Potash Project formerly held in part by AgriMinco Corp. At inception, those shares had a fair value of $1.4m. Circum is fully funded to completion of feasibility study.
Glossary of Technical Terms
"head grade" means the average grade of WO3 contained in the total mining inventory set out in table 8 of the Bara Consulting report.
"mtu" means metric ton unit, i.e. 10Kg of contained WO3 in concentrate.
"WO3" is tungsten oxide.
ENDS
