JOHANNESBURG (miningweekly.com) – Aim-listed Premier African Minerals on Tuesday reported that it has exercised the option to acquire Toronto-listed AgriMinco’s entire interest in its subsidiary Mandalore Development, which has a 30% interest in the Danakil potash project, in Ethiopia.

The acquisition consideration was estimated, on present pricing, to be C$4.3-million.

To make up this consideration Premier would cancel all the common shares it held in AgriMinco – which was currently 120-million shares, representing 42% of the company’s issued share capital at a value of C$1.8-million – for no consideration. Premier would also settle a portion of AgriMinco’s debt obligations up to C$1.5-million and issue C$1-million worth of premier ordinary shares to the group.

“The exercise of the option, without the need to access the capital markets in the near term, provides Premier with a significant asset that is intended to be acquired by [AgriMinco’s joint venture partner in Danakil] Circum Minerals,” Premier African CEO George Roach said.

Should Circum acquire the interest in Danakil under a predetermined call option, Premier would receive an amount in cash on completion equal to the amount advanced to Premier under its bridge loan, new Circum shares and a further deferred consideration payable in either cash or Circum shares, which was expected in aggregate to be no less than the consideration paid by Premier to AgriMinco.

Roach said as a consequence of the planned acquisition of the 30% interest in Danakil by Circum Premier African would be able to fund its normal operating costs in the foreseeable future without the need for further immediate dilution of shareholders.

“[Premier will also] retain a significant interest in the Danakil potash project [in future] through our ownership of two-million shares in Circum; these incoming funds will allow us to progress our flagship RHA Tungsten development in Zimbabwe," he added.