Funding and Corporate update

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

For immediate release

 7 May 2020

Premier African Minerals Limited

Funding and Corporate update

Premier African Minerals Limited ("Premier" or the "Company") today announces the conclusion of an investment agreement of US$290,000.

George Roach commented: "This agreement provides a further cash buffer as we approach finality in regard to both our EPO application at Zulu Lithium Pvt Limited and the ongoing negotiations at RHA Tungsten Private Limited ("RHA") in Zimbabwe.

I am pleased to note that the Ministry of Commerce and Industry in Zimbabwe has indicated that whilst they cannot conclude the negotiation in regard to RHA under the Covid-19 lock down, they have nevertheless provided RTGS $2,500,000 (equivalent to US$ 108,806 at the official bank exchange rate), in interim funds that are adequate to cover holding and security costs at RHA for an extended period.

I am deeply appreciative of this gesture and will comply with the request that further action be stayed at this moment."

New Investment

The Company has today entered into a secured US$290,000 Investment Agreement ("Investment Agreement") before costs with D-Beta One EQ, Ltd ("D-Beta"), YA II PN, Ltd ("YA") and Riverfort Global Opportunities PCC Limited ("Riverfort"), collectively referred to as the "Investors". The annual interest rate payable on the outstanding investment amount is 10%.

The principal amount (plus any accrued interest) under the Investment Agreement is repayable six months from the date of this announcement. The Investors, at their sole discretion, may convert any percentage of the principal amount under the Investment Agreement, subject to the Company's applicable share authorities, into new ordinary shares of the Company at the conversion price at the lower of 90 per cent. of the lowest daily volume weighted average price ("VWAP") during the 5 trading days immediately prior to the date of a conversion notice, or 135% of the average daily VWAP for the 20 trading days immediately prior to the advance of funds to Premier under the Investment Agreement. The Investment Agreement makes allowance for adjustments to the conversion price under certain circumstances to match any lower pricing of any equity issue by the Company prior to conversion.

The advance of the principal amount under the Investment Agreement is subject to a number of standard pre-conditions for an agreement of this type, including no material adverse change and execution of the security documentation, which the Company expects to have been satisfied or waived in writing by the Investors.

The Investors are contractually precluded from issuing any conversion notice for the first 30 days following this announcement ("Period"). The Investment can only be convertible to the extent that the Company has sufficient corporate authority to do so. Failure to obtain or maintain sufficient corporate authority under terms of the Agreement will give rise to an event of default under the Agreement, which could potentially precipitate a cash demand for all amounts due under the Investment agreement. The Company will convene a Special General Meeting of shareholders within the Period to seek an increase to its authorised share capital.

Should the Company elect to repay any proportion of the investment amount in cash, the Investors shall be entitled to a 5-day notice period, whereby the Investors may elect to convert such investment amounts into new ordinary shares in accordance with the Investment Agreement or accept the repayment in cash with a prepayment fee equal to 5 per cent of the investment amount being repaid.   

The Investment Agreement is subject to normal events of default and the Company has provided a number of standard warranties and undertakings. The Investment Agreement is secured over 290,000 shares of Circum Minerals Limited held by Premier.

The proceeds of the Investment Agreement will be used to reduce existing liabilities and general working capital for the Company.

The Investment Agreement also provides the Investors with a first right of refusal for one year (excluding any offtake related funding) in respect of any potential equity-linked funding instrument entered into by the Company.

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. The Company holds 5,010,333 shares in Circum Minerals Limited, the owners of the Danakil Potash Project in Ethiopia, which has the potential to be a world class asset. In addition, the Company holds a 12% interest in MN Holdings Limited, the owner and operator of the Otjozondu Manganese Mining Project in Namibia.

ENDS