The board of Aim-listed Premier African Minerals has agreed to amended terms with KME Holdings for the proposed acquisition of KME’s assets and has, in addition, agreed to terms for the acquisition of 50% of the equity in the Zimbabwe-based near-term gold producer Honey Badger Resources (HBR).
The amended terms include Premier buying 50% of the KME plant for $1.4-million, to be settled in new Premier ordinary shares.
The proposed acquisition and spin-out of the combination of KME’s assets and Premier’s Zimbabwean minerals projects will no longer proceed.
Premier has also entered into binding heads of terms to acquire 50% of the equity of HBR, the owner of a Zimbabwe-based near-term gold producer with substantial exploration and development upside potential, for $3.7-million, to be settled in shares.
HBR has two projects available for immediate development and within close proximity of each other. The first project is a Joint Ore Reserves Committee-compliant gold resource of 535 000 oz with copper credits at a grade of 2.10 g/t gold and 0.33% copper.
The second project is an option over a nearby mining lease which has historically supplied high-grade ore from existing underground shafts to the previous owners’ nearby gold facility.
The previous owners declared an internal, noncompliant resource target greater than 500 000 oz at a grade of 4.1 g/t.
Premier believes there is the potential to target a resource covering these two projects in excess of two-million ounces of gold through additional exploration work and drilling using the KME Plant Hire asset base.
Premier also plans for targeted gold production within nine months of closing the transaction, and also intends to start additional drilling at the Zulu lithium project.
According to Premier CEO George Roach, Premier must “protect against the possibility of a future adverse event disabling the company, as has been the case with RHA Tungsten”.
He added that management has decided to expand operations by taking advantage of some significant opportunities in Zimbabwe, bring Zulu back to development and generally reduce its impact and dependence on RHA Tungsten.
In a separate statement, also issued on Thursday, Premier reported that it is now in discussions with the Ministry of Industry, Commerce and Enterprise Development about assisting with the funding of the recommissioning of the RHA Tungsten mine, in which Premier currently has a 49% interest.
As part of Premier's recapitalisation proposal submitted to the Ministry of Industry on January 18, 2018, including Premier's proposal for the restructuring of the ownership of RHA, RHA's management established that, to get the mine into a state of sustainable and potentially profitable production, they would require the electrification of mining operations, general working capital, further exploration drilling of the underground and openpit, plant upgrades, semi-mechanisation of the underground workings, and development of a decline shaft and the equipping thereof to expose ore on the 810 and 760 levels respectively.
According to Roach, Premier welcomes the proposed financial commitment from the Ministry to assist with bringing RHA back into production.
Premier expects to meet with the Ministry at its earliest convenience.
“We believe that the proposed commitment will transform the project and we look forward to a close collaboration with the government of Zimbabwe in bringing RHA back in production."