Name and Location
RHA tungsten project, Zimbabwe.

Client
Premier African Minerals holds 49% of RHA Tungsten, with the remaining 51% held by Zimbabwe’s National Indigenisation and Economic Empowerment Fund.

Project Description
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.

Premier Mining has since 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.

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
Commissioning of operations is expected this year.

Latest Developments
Premier African Minerals expects to update its resource estimate at its RHA tungsten mine before month-end, following the completion of an underground implementation study.

The preparation of the update has been delayed, because the openpit ore has to be reviewed for possible bulk mining, following successful testwork using X-ray transmission technology.

The study, prepared by RHA and Whaleside Shaft Sinkers Zimbabwe, has shown that the company will need $406 000 in capital cost for underground development, while confirming that the project schedule for equipping the vertical shaft hoist and commissioning of operations on 870 level remains on schedule for February.

Further, the study highlights that the miner will follow a six-month underground mining plan on 926 level while re-equipping the vertical shaft to 870 level.
 
"RHA was always planned, in the longer term, to be an underground mine. Unforeseen developments during the initial openpit operations led the company to accelerate the move to underground mining.

“This change in strategy has resulted in the need to finance company overheads for an extended period without recourse to cash flow generated from the openpit and finance substantial additional debt generated by RHA,” CEO George Roach has said.

He adds that Premier has been successfully extracting and stockpiling underground since late November last year and now expects RHA to generate positive operational cash flow this year.

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.