JOHANNESBURG (miningweekly.com) – Multicommodity explorer Premier African Minerals has outlined what it describes as a low-capital implementation strategy for its 49%-owned RHA tungsten project, in Zimbabwe.
The Aim-traded miner said on Tuesday that the assessment of various implementation strategies to enhance project value and reduce start-up capital costs had culminated in a decision to start operations with an openpit mine, limited to an initial 18-month production period that had the potential to fully finance underground operations.
The capital cost of the project would be $4.8-million, while the sustaining capital cost would be $157 000 with a pre-tax net present value of $15.8-million.
The internal assessment had, meanwhile, outlined a production price of $288.6/t and operating costs of $12.5-million.
Premier had prepared an internal preliminary economic assessment (PEA) of the openpit start-up option in isolation to demonstrate the reduced capital requirements of this option, as well as the self-funding capability once initial production had been commissioned.
The financial model incorporated a firm quotation for fabrication and installation of a process plant, which would likely be commissioned in March next year.
Capital requirements, mainly for support infrastructure and tailings storage, had been adjusted downwards from the October PEA to reflect the openpit operation.
CEO George Roach said the openpit early-production model had a targeted production date in the first half of 2015.
“When this is achieved, the cash generated is expected to fully finance the development of RHA, as set out in the updated October PEA. We are in advanced stage negotiations with offtake partners and debt providers and we look forward to updating shareholders in due course,” he commented.