Premier African Minerals reported the signing of a new Management Agreement (MA) with the National Indigenization and Economic Empowerment Fund of Zimbabwe (NIEEF) for RHA Tungsten.
The agreement is expected to see RHA brought back into production without any further financing requirement from Premier. Premier holds a 49% interest in RHA and is the operator.
George Roach, CEO of Premier commented: “Whilst it has been a long haul, I am very pleased to be able to report that we have signed a new legally binding agreement with NIEEF that includes a funding undertaking of US$6 million for RHA. Use and application of these funds is expected to see RHA back in production later this year and allows for required upgrades that are expected to result in major operating cost reductions including electricity grid connection. Premier retains ownership of the plant and equipment and is reappointed as the manager for a further 5 years with renewal thereafter.
The investment from NIEEF will be structured as share capital and Premier will simultaneously capitalise an equivalent amount from Premier’s existing loan account. In my opinion, this represents both an equitable solution and a good time for the Zimbabwean Government to invest directly in this project. RHA has been significantly de-risked over the past 4 years and is now an operation that is better understood.
We have agreed a provisional implementation process with NIEEF and I expect to provide further guidance thereafter.”
Key terms of the Management Agreement
The new MA replaces the old Management Agreement that had been entered into on the 23 September 2013. Premier’s 100% owned subsidiary ZimDiv Holdings Limited is appointed as the Manager for a period of 5 years. In particular, the Manager has full authority and responsibility for the day to day operations of RHA.
The Manager will conduct the operations at RHA in accordance with the general terms and conditions of the MA and the approved budget and shall report directly to the board of RHA. The board of RHA will agree the Management Fee that will include a performance related adjustment, which requires first concentrate shipment within 100 days of receipt of the new investment.
Source: Company Press Release