Premier African Minerals Limited told investors on Friday it remains confident on the prospects in Zimbabwe projects after raising funds to support its operations.
The company raised US$563,000 through equity subscriptions and secured a US$300,000 loan in the first half of the year. In August it raised a further £750,000 before expenses, which will be used for the restructuring and ongoing holding costs of the RHA tungsten mine and plans to bring it back into production.
The group said the prospects for RHA have “improved considerably” with the recent rise in tungsten prices. Drilling at the open pit and the underground at RHA is underway.
New regulations in Zimbabwe designed to increase the indigenous population’s stake in the sector meant Premier had to reduce its ownership in RHA. But the company said it was encouraged with recent events in Zimbabwe and assurances that resolution to the equity issue at RHA should be expected.
"The financial drain on the company over the past six months has been substantial and the costs associated with holding RHA on care and maintenance as well as the uncertainties associated with timing of the Zimbabwean government's decision has made it very difficult to both hold the gompany ready for a quick restart at RHA and cut costs as the situation may indicate," said chief executive George Roach.
"Suffice it to say that the status at RHA must now come to a head."
He added: “Premier continues to reduce overheads and is pleased to report that executive management have agreed in principle to accept not less than 50% of their already reduced remuneration in the form of equity in Premier and a further announcement will be made in respect of these proposed arrangements."!
For the Zulu lithium project, Premier African said it was unable to reach the final terms with Cadence Minerals Plc to fund the definitive feasibility study.
However, other interested parties have engaged with Premier about concluding a new joint venture agreement to progress Zulu and RHA in one agreement.
“The Zulu Lithium Project has potential to develop into a company making asset and we look forward to exploration results as they become available in the near future,” Roach said.
Loss before tax for the first half narrowed to US$1.4mln from US4.5mln last year and ended the period with US$299,000 in current assets. - proactiveinvestors.co.uk
