RHA Tungsten

Further to the announcement on 2 January 2018, Premier advises that whilst plant throughput during the latter part of December 2017 exceeded the target of 6,000 tonnes in aggregate ore feed, the ore processed was largely from on-strike development at a diluted ore grade insufficient to achieve planned profitable production. RHA mine management has advised that development to expose stopes has lagged and mining of undiluted ore from stopes will now only be possible from the latter part of Q1 and accordingly, RHA requires additional financial support until this time. Premier has previously stated that it will not provide any further finance other than in the form of a bridging facility for concentrate ready for shipment. In summary, the status of RHA is as follows:

  • Ore delivered to surface is at diluted grade and deviates from the Resource grade. Development in preparation for mining stopes causes mining dilution of approximately 3 to 1.
  • Predicted Resource grades from stope ore as opposed to development ore are adequate to achieve profitable operation.
  • Open pit operations are suspended and may resume subject to a further short-hole drilling programme that would indicate how much additional stripping is required to access predicted grade improvements.

Continuing operations at RHA are now dependent on additional sources of capital being provided. New policy statements in Zimbabwe enable 100% foreign ownership of mining projects (outside the diamond and platinum sectors). Premier is currently in discussions with the National Indigenisation and Economic Development Fund ("NIEEF"), which has an interest of 51% in RHA, to agree alternative financing options. As previously stated, Premier has sole-funded RHA to date and the plant and equipment at RHA are exclusively owned by Premier. The mineral claims are ceded as security under the plant rental agreement by RHA to Premier. RHA will complete one final shipment before mid-January and will then suspend production until such time as a commercial and viable agreement is reached with NIEEF to ensure a long-term future for RHA. Premier will continue to incur minimal ongoing care and maintenance costs in relation to RHA whilst the position is resolved.

Zulu Lithium

As announced on 2 January 2018, the Board of Premier has decided that a separate listing should be sought for the Zulu Project ("Zulu NewCo") to maximise the value of the project.

Over the past 18 months, Premier has made significant progress in the development of the Zulu Lithium Project and given the market valuations for comparable hard-rock lithium projects, the Board believes that significant value can be unlocked for shareholders by having a separate listing for Zulu.

Premier is currently therefore considering with its advisers a separate listing of Zulu in London.  The listing is intended to take place as soon as possible, subject to regulatory and other approvals.  Premier intends, subject to appropriate legal and taxation advice, to distribute (at nil cost) to Premier shareholders at the time of listing a substantial proportion of Premier's retained interest in Zulu Newco.

George Roach, Premier's CEO, commented: "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."