Name of the Project
RHA tungsten project.
Location
The project is located near Hwange, in Zimbabwe.
Client
Premier African Minerals holds 49% of RHA Tungsten, with the remaining 51% held by Zimbabwe’s National Indigenisation and Economic Empowerment Fund (NIEEF).
Project Description
The 1 800 ha project is divided into 50 mineable mineral blocks, of which Premier African Minerals owns ten.
The preliminary economic assessment (PEA) on the project was completed in August 2013.
The mine plan presented in the PEA consists of an openpit, followed by an underground operation, with a combined life-of-mine (LoM) of six years at a run-of-mine production rate of 192 000 t/y, or 16 000 t/m.
The underground mine produces a wolframite concentrate that is measured in metric ton units; wolframite consists primarily of ferberite, with a smaller quantity of hubnerite.
Every metric ton unit of concentrate is equivalent to 10 kg of tungsten trioxide contained in a concentrate at about 60%.
Premier Mining has since the completion of the PEA, commissioned Bara Consulting to update the financial model of the project to demonstrate the effect of the additional work that has been completed since the publication of the PEA on the product valuation. The financial model outlines a low-capital implementation strategy.
Potential Job Creation
The project boasts entirely local skills.
Net Present Value/Internal Rate of Return
Bara’s financial model reflects a pretax net present value of $15.8-million and an annualised internal rate of return of 286%, calculated on a quarterly basis.
Value
The project preproduction capital has been reduced from $4.77-million to $4.15-million.
Duration
Operations at the mine started in August 2016.
Latest Developments
Premier African Minerals is in discussions with Zimbabwe’s NIEEF, which has an interest of 51% in the RHA Tungsten mine, to agree alternative financing options for the cash-strapped operation.
Continuing operations at RHA now depend on additional sources of capital being provided; however, Premier has previously stated that it will not provide any further finance other than a bridging facility for concentrate ready for shipment.
“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 the NIEEF to ensure a long-term future for RHA,” the company has said.
This follows the delivery of ore to surface at a diluted grade, deviating from the resource grade, and the advisement from RHA mine management that development to expose stopes has lagged and that the mining of undiluted ore from stopes will now be possible only from the latter part of the first quarter.
RHA requires additional financial support until this time.
“Premier has been the sole funder of RHA to date, although it only has a 49% interest,” Premier CEO George Roach has said.
“The proposed new legislation in Zimbabwe will permit 100% foreign ownership [of mining operations] and Premier is, therefore, currently in discussions with the NIEEF, as well as other interested groups, to review alternative financing arrangements that will allow for further external funding for RHA,” he has noted.
However, the company remains confident that when RHA is equitably financed, the mine will have a sustainable future.
Key Contracts and Suppliers
Bara Consulting (updated financial model).
On Budget and on Time?
Not stated.
Contact Details for Project Information
Premier African Minerals, tel +27 100 201 281 or email info@premierafricanminerals.com.