Premier acquires a conditional interest in MNH

RNS Number : 1735M

Premier African Minerals Limited

06 May 2020

 

Premier African Minerals Limited / Ticker: PREM / Index: AIM / Sector: Mining

For immediate release

 6 May 2020

Premier African Minerals Limited

Premier acquires a conditional further interest in MN Holdings Limited

The Board of Premier African Minerals Limited ("Premier" or the "Company") is pleased to announce that it has today agreed to acquire a further 7% in MN Holdings Limited ("MNH"), the owner and operator of the Otjozondu Manganese Mining Project ("Otjozondu") in Namibia. The purchase consideration of US$700,000 is payable in new Premier shares and is entirely dependent on shareholder approval. On completion, Premier's interest in MNH will increase to 19%.

George Roach, Chief Executive of Premier commented, " This further proposed increase in our holding in MNH is based on the same valuation formula applied to our initial acquisition, effectively an independent valuation of plant and machinery and does not factor any upside into the price calculation. This transaction will require shareholder approval that will be sought at a Special General Meeting ("SGM").

Nevertheless, this does represent a more significant stake in what we expect to be a cash generative asset supportive of group overheads in the near future and comes on the back of a sharp increase in the price for manganese. I do expect to update the market soon in regard to developments at RHA and details related to the required SGM . "

The Terms of the Sale and Purchase Agreement

The Sale and Purchase Agreement ("Agreement") is conditional on shareholder consent that will need to be obtained within 30 days from the date of this announcement. Premier intends to convene SGM of shareholders to seek an increase to its authorised share capital to allow the board to proceed with this proposed transaction.

The consideration shares will be issued at the higher of the closing share price of the Company prior to the date of announcement of this Agreement or the closing share price of the Company on the day that shareholder approval is obtained to enter into the Agreement ("Consideration Shares"). The Consideration Shares will be subject to orderly market requirements and any sale will be managed by Premier's broker.

About the Otjozondu Manganese Mining Project

The Otjozondu Project is located some 450 kilometres east of Walvis Bay, a port town on the coast of Namibia which is currently used to ship manganese ores to international markets. The Project is located in a well-known and established manganese district that has been largely consolidated under Otjozondu, whose tenements cover an area of approximately 1,367 square kilometres and more than 114 kilometres of strike, of which only 14 kilometres has been explored to the point of declaration of a JORC resource. The area under tenement encloses an historic and successful manganese mining district. Otjozondu's operations are continuous from a number of open pits in an owner-miner environment. Processing to the extent necessary is through a crush screen and jig plant.  All plant and equipment are owned by MNH. Otjozondu is wholly owned by MNH. Otjozondu' s current operational profile is as follows:

· Experienced management and operational team with proven operational success;

· Currently exporting up to 10,000 tonnes lump ore per month at better than 35% Mn;

· Operations generated N$21.0 million (equivalent to US$1,428,000) to the year ending 30 June 2019;

· Marketing contract in place;

· Established road/rail route to Walvis Bay;

· Unused capacity exists in all facets of the operations;

· Historic JORC 2004 (non-JORC 2012 compliant) resource, as set out further in Table 1 below; and

· Otjozondu has an anticipated Exploration Target of 30 -50 million tonne grading at 23% - 27% Mn.

Table 1: Summary Historic Resource at Otjozondu using a 15% Mn cut-off:

Resource classification	Million Tonne	Mn%	Fe%	SiO2 %	Al2O3 %	BaO %	P%	Contained Mn Tonne
Indicated	4.3	22.3	14.6	32.1	4.9	2.4	0.03	961,000
Inferred	10.7	22.5	12.8	33.6	5.0	2.5	0.04	2,417,700
Total	15.0	22.5	13.3	33.2	5.0	2.5	0.04	3,378,700

  Notes:

1.  Mineral Resources have been rounded and are stated both gross and net attributable to MNH.

2.  Otjozondu is the operator and owns 100% of the Otjozondu licence such that gross and net attributable Mineral Resources to Otjozondu are the same. The historic Mineral Resources estimate was independently prepared for the previous owner, Shaw River Manganese Limited, by Cube Consulting Pty in December 2012 who classified and reported the resource in accordance with Reporting of Mineral Resources and Ore Reserves (JORC Code 2004- non-JORC 2012 compliant and therefore not reported in accordance with an AIM Standard).

3.  Premier has not independently verified or updated the Cube historic resource estimate. No adjustment or update has been made to the historic resource statement for any production by Otjozondu since the historic resource statement was prepared in December 2012.

MNH - Further AIM disclosures

MNH was incorporated in 23 February 2017 in Mauritius. MNH acquired the entire issued share capital of Shaw River Mauritius from Shaw River Manganese Limited for A$4.952 million in early 2018. Shaw River Mauritius indirectly owns the entire issued share capital of Otjozondu Mining (Pty) Limited ("Otjozondu"), a Namibian incorporated entity which owns and operates the Otjozondu Manganese Mining Project.

MNH has not published any results since incorporation as it acts solely as the holding company for purpose of acquiring Shaw River Manganese Limited.

The last audited reported accounts for Otjozondu are for the year ended 30 June 2018, for which revenue amounted to N$27 million (equivalent to US$1.8 million, see note below) and operating profit before tax (and interest charges to group companies) was N$0.3 million (equivalent to US$0.02 million). Total assets as at the same date amounted to N$14.2 million (equivalent to (US$0.9 million).

In the unaudited management accounts for 6 months ended 31 December 2019, Otjozondu reported revenue of approximately N$35 million (equivalent to US$2.4 million)) and an operating profit before tax (and interest charges to group companies) of approximately N$11million (equivalent to US$0.8 million). Total assets as at the same date amounted to approximately N$28 million (equivalent to US$1.9 million).

Note:

The current exchange rate of US$1.00/N$14.7 has been used to translate Otjozondu's results into US Dollars above.

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014. The person who arranged the release of this announcement on behalf of the Company was George Roach.

Enquiries:

Fuad Sillem	Premier African Minerals Limited	Tel: [phone]
Michael Cornish / Roland Cornish	Beaumont Cornish Limited (Nominated Adviser)	Tel: [phone]
Jerry Keen/Edward Mansfield	Shore Capital Stockbrokers Limited	Tel: [phone]

Notes to Editors:

Premier African Minerals Limited (AIM: PREM) is a multi-commodity mining and natural resource development company focused on Southern Africa with its RHA Tungsten and Zulu Lithium projects in Zimbabwe.

The Company has a diverse portfolio of projects, which include tungsten, rare earth elements, lithium and tantalum in Zimbabwe, encompassing brownfield projects with near-term production potential to grass-roots exploration. The Company holds 5,010,333 shares in Circum Minerals Limited, the owners of the Danakil Potash Project in Ethiopia, which has the potential to be a world class asset. In addition, the Company holds a 12% interest in MN Holdings Limited, the owner and operator of the Otjozondu Manganese Mining Project in Namibia.

Glossary

" Al2O3" "A$" "BaO" "dmtu" "Fe"	Aluminium oxide.   Australian Dollars. Barium oxide. Dry metric ton unit. Equivalent to 10 kg of Mn Iron
"JORC" "lump ore"	The Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves, as published by the Joint Ore Reserves Committee of The Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Minerals Council of Australia. Mine size specification 80% plus 10 mm/minus 100 mm
"Mn"	Manganese.
"Mineral Resources" "N$" "P" "SiO2"	A concentration or occurrence of material of intrinsic economic interest in or on the Earth's crust in such form, quality and quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade, geological characteristics and continuity of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge. Mineral Resources are sub-divided, in order of increasing geological confidence, into Inferred, Indicated and Measured categories.  Namibia Dollar. Phosphorus. Silicon dioxide.
"Tonne" "ZAR"	Metric ton.   South African Rand.

Forward Looking Statements:

Certain statements in this announcement are or may be deemed to be forward looking statements. Forward looking statements are identified by their use of terms and phrases such as ''believe'' ''could'' "should" ''envisage'' ''estimate'' ''intend'' ''may'' ''plan'' ''will'' or the negative of those variations or comparable expressions including references to assumptions. These forward-looking statements are not based on historical facts but rather on the Directors' current expectations and assumptions regarding the Company's future growth results of operations performance future capital and other expenditures (including the amount. nature and sources of funding thereof) competitive advantages business prospects and opportunities. Such forward looking statements reflect the Directors' current beliefs and assumptions and are based on information currently available to the Directors.  A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements including risks associated with vulnerability to general economic and business conditions competition environmental and other regulatory changes actions by governmental authorities the availability of capital markets reliance on key personnel uninsured and underinsured losses and other factors many of which are beyond the control of the Company. Although any forward-looking statements contained in this announcement are based upon what the Directors believe to be reasonable assumptions. The Company cannot assure investors that actual results will be consistent with such forward looking statements.

Qualified Person

Gerard Evans, Resource Geologist for Premier African Minerals, has reviewed and confirmed the technical detail set out herein in respect of Otjozondu is in line with the information provided by MN Holdings Limited. Gerard Evans has 27 years' experience in mining industry specialising in resource geology and holds a B.Sc Hons degree in geology from the University of the Witwatersrand. He is registered member of SACNASP (400015/08), GSSA and GASA.

ENDS

 

END

 

 

ACQBUGDUBDGDGGL