Interim Results

Premier African Minerals Limited / Ticker: PREM / Index: AIM / Sector: Mining 16 September 2013 Premier African Minerals Limited (`Premier' or `the Company') Unaudited Interim Results for the six months ended 30 June 2013 Premier African Minerals Limited, the AIM quoted multi-commodity natural resource company with mineral projects located in Africa, announces its unaudited interim results for the six months ended 30 June 2013. Highlights * Completed a maiden resource statement and mining study on RHA Tungsten Project in Zimbabwe * Received final approval from the TSX Venture Exchange for sale of Togo and Mali subsidiaries to AgriMinco Corp (`AgriMinco') for consideration of 120 million new shares in AgriMinco, representing 42% of the share capital in AgriMinco Executive Chairman and CEO Statement Shortly after the reporting period ended 30 June 2013, Premier achieved two significant milestones: the completion of a maiden resource statement and mining study outlining the robust economics of its near-term RHA Tungsten Project in Zimbabwe; and approval of the sale of our Togo and Mali subsidiaries from the TSX Venture Exchange (`TSX-V') to take a 42% shareholding in AgriMinco Corp. (formerly known as Ethiopian Potash Corp). Both of these achievements have potential to deliver value to our shareholders in the near-term. Projects RHA Tungsten Project - Zimbabwe In August 2013, Premier published a maiden SAMREC code compliant resource of 1,093,000 tonnes at a grade of 8.7 kg/t tungsten trioxide ('WO3') in the Inferred category, and 147,000 tonnes at 4.7 kg/t WO3 in the Indicated category. Importantly, this grade compares most favourably to industry standards and was calculated over one lode, `Lode 2A', of a seven lodes identified at RHA to date. The Preliminary Economic Assessment (`PEA') and Mining Study announced on 18 August 2013, illustrated robust economics and indicated a Capex of US$13.5m, a pre-tax IRR of 316%, positive cash flow of US$118 million, an undiscounted pre-tax NPV of US$118 million, and a lead time to first production of saleable product of approximately 10 months from the commencement of development. For the full details of the PEA and Mining Study, please visit the Company's website www.premierafricanminerals.com. There is potential to increase and upgrade RHA's resource in the future as further exploration is conducted on the known remaining mineralised lodes described in the PEA. Additionally, as announced earlier this month, Premier extended its option over the dormant historic Tung tungsten mine (`Tung'). The Tung mine, which is approximately 5 km to the North of RHA, has 2 km of untested strike, which we believe could add to the resource base of RHA and in turn increase the life of mine. Premier is actively engaged in discussions with potential off-take partners and funders to advance the development of the project targeting production by late 2014. Corporate Transaction On 5 July 2013 we received final approval from the TSX-V for the sale of one of our Togo subsidiaries and our Mali subsidiary which hold exploration permits for phosphates, clays and potash to AgriMinco (formerly Ethiopian Potash Corp.). The Company now holds 120 million new shares in AgriMinco, representing approximately 42% of the issued shares. 100 million of the shares become tradeable on 1 November 2013 while 20 million remain in escrow pending the fulfilment of certain technical requirements imposed by the TSX-V. Through our shareholding in AgriMinco, we gain exposure to its highly prospective Danakil potash property in Ethiopia in which it has a 30% interest. AgriMinco has a free carry to scoping study and a total spend of $7 million. The operators and 70% owners of the Danakil property, Circum Resources Ltd., plan to rapidly advance exploration on the property. Financial Review In the six months to 30 June 2013 the Group incurred a loss of US$1,186,807. The loss includes a US$288,714 share based payment charge for options issued on Admission to AIM and excessive professional fees, partly related to the AgriMinco transaction. The Company invested US$587k in its exploration properties, mainly on its RHA Tungsten Project resource work and mining study. Cash at the end of June 2013 was US$157k with the Â£300k (US$465k) facility being drawn down from the month of July. As mentioned in our annual report issued in June 2013, the Company needs to secure further funding to advance RHA and to fund operations and is currently in negotiations with several parties. It is noted that 100 million of the Company's shares in AgriMinco will be free trading from 1 November 2013. Subject to regulatory approval, I have provided an undertaking to Premier that additional drilling, metallurgical test work and early EPCM work necessary at RHA to facilitate early exploitation may commence immediately and that associated overheads will be met pending conclusion of the negotiations presently underway. Corporate Review Following the period end, two new board members were appointed Alexander du Plessis and Neil Herbert (see announcement dated 20 August 2013). Both bring valuable skills to Premier; Alexander du Plessis in regard to mine development with special reference to Premier's RHA Tungsten Project and Neil Herbert in corporate affairs, market communication and deal structuring. In line with these appointments, Bruce Cumming and Leslie Goodman have stepped down from the Board. Outlook I am delighted with the progress that we have made these past six months in regard particularly to our RHA Tungsten Project and our investment in AgriMinco. I particularly look forward to seeing the Company transition from exploration to exploitation. I believe we are in a fortunate position in that our leading project is concerned with Tungsten, currently a favoured and desireable commodity. George Roach Executive Chairman and CEO 16 September 2013 For further information please visit www.premierafricanminerals.com or contact the following: Pamela Hueston Premier African Minerals Limited Tel: +44 (0) 755 778 3855 Tony Rawlinson Cairn Financial Advisers LLP (Nomad) Tel: +44 (0) 207 148 7900 Jerry Keen Shore Capital Stockbrokers Limited Tel: +44 (0) 207 408 4090 (Broker) Edward Mansfield Shore Capital Stockbrokers Limited Tel: +44 (0) 207 408 4090 (Broker) Felicity Edwards St Brides Media & Finance Ltd (PR) Tel: +44 (0) 20 7236 1177 Charlotte Heap St Brides Media & Finance Ltd (PR) Tel: +44 (0) 20 7236 1177 CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME Continuing operations Notes Six months Six months Year to 31 to 30 June to 30 June December 2013 2012 2012 (Unaudited) (Unaudited) (Audited) $ $ $ Administrative expenses 5 (1,180,753) (468,909) (2,040,721) Depreciation and amortization expense (6,054) (14,253) (25,581) Exploration expenses - (9,947) (36,279) Operating loss (1,186,807) (493,109) (2,102,581) Finance costs - - 4,312 Loss before tax (1,186,807) (493,109) (2,098,269) Income tax expense 6 - - - Loss for the period (1,186,807) (493,109) (2,098,269) Other comprehensive income: Exchange differences on (125,431) (25,307) 31,408 re-translation of foreign operations Total comprehensive income for the (1,312,238) (518,416) (2,066,861) period attributable to the owners of the parent Loss per share attributable to the owners of the parent (expressed in US cents) Basic loss per share 7 (0.4c) (1.0c) (3.0c) Diluted loss per share 7 (0.4c) (1.0c) (3.0c) CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION Notes 30 June 30 June 31 December 2013 2012 2012 (Unaudited) (Unaudited) (Audited) $ $ $ ASSETS Non-current assets Intangible exploration and evaluation assets 8 7,287,276 3,806,606 6,724,099 Property, plant and 42,154 58,392 48,301 equipment Total non-current assets 7,329,430 3,864,998 6,772,400 Current assets Trade and other 9 129,635 1,195,133 179,973 receivables Cash and cash equivalents 156,934 87,737 1,517,784 Total current assets 286,569 1,282,870 1,697,757 TOTAL ASSETS 7,615,999 5,147,868 8,470,157 LIABILITIES Current liabilities Trade and other payables 10 (339,690) (889,785) (170,324) Borrowings 11 - (5,638,567) - Shares to be issued 12 (1,500,000) - (1,500,000) TOTAL CURRENT LIABILITIES (1,839,690) (6,528,352) (1,670,324) AND TOTAL LIABILITIES NET ASSETS/(LIABILITIES) 5,776,309 (1,380,484) 6,799,833 EQUITY Share capital 13 11,006,728 1,562,000 11,006,728 Merger reserve (176,495) (176,495) (176,495) Foreign exchange reserve (94,023) (25,307) 31,408 Share based payment 592,352 19,604 303,638 reserve Retained earnings (5,552,253) (2,760,286) (4,365,446) TOTAL EQUITY ATTRIBUTABLE TO THE OWNERS OF THE PARENT 5,776,309 (1,380,484) 6,799,833 CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS Notes Six months Six months Year to 31 to 30 June to 30 June December 2013 2012 2012 (Unaudited) (Unaudited) (Audited) $ $ $ Net cash outflow from operating 14 (672,335) (836,333) (1,759,712) activities Investing Activities Exploration and evaluation 8 (586,664) (1,290,314) (1,825,596) expenditures Purchases of property, plant and - (30,000) (30,862) equipment Net cash used in investing (586,664) (1,320,314) (1,856,458) activities Financing Activities Proceeds from borrowings 11 - 2,205,106 3,766,385 Proceeds from issue of share 13 - - 1,291,272 capital Net cash inflow from financing - 2,205,106 5,057,657 activities Net (decrease)/increase in cash and cash equivalents (1,258,999) 48,459 1,441,487 Cash and cash equivalents at 1,517,784 68,448 68,448 start of period Net exchange (losses)/gains (101,851) (29,170) 7,849 on cash and cash equivalents Net cash and cash equivalents 156,934 87,737 1,517,784 at end of period CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY Attributable to the owners of the parent Share Merger Foreign Share Retained Total capital reserve exchange based Earnings reserve payment reserve $ $ $ $ $ $ At 1 January 2012 1,562,000 (176,495) - 19,604 (2,267,177) (862,068) Loss for the period - - - - (493,109) (493,109) Exchange - - (25,307) - - (25,307) differences on re-translation of foreign operations Total comprehensive - - (25,307) - (493,109) (518,416) income for the period At 30 June 2012 1,562,000 (176,495) (25,307) 19,604 (2,760,286) (1,380,484) At 1 January 2012 1,562,000 (176,495) - 19,604 (2,267,177) (862,068) Loss for the year - - - - (2,098,269) (2,098,269) Exchange - - 31,408 - - 31,408 differences on re-translation of foreign operations Total comprehensive - - 31,408 - (2,098,269) (2,066,861) income for the year Transactions with owners Issue of equity 10,843,510 - - - - 10,843,510 shares Share issue costs (1,398,782) - - - - (1,398,782) Share based payment - - - 284,034 - 284,034 At 31 December 2012 11,006,728 (176,495) 31,408 303,638 (4,365,446) 6,799,833 Loss for the period - - - - (1,186,807) (1,186,807) Exchange - - (125,431) - - (125,431) differences on re-translation of foreign operations Total comprehensive - - (125,431) - (1,186,807) (1,312,238) income for the period Transactions with owners Share based payment - - - 288,714 - 288,714 At 30 June 2013 11,006,728 (176,495) (94,023) 592,352 (5,552,253) 5,776,309 1. GENERAL INFORMATION Premier African Minerals Limited (`Premier' or `the Company'), together with its subsidiaries (the `Group'), was incorporated in the Territory of the British Virgin Islands under the BVI Business Companies Act, 2004. The address of the registered office is Craigmuir Chambers, PO Box 71, Road Town, Tortola, British Virgin Islands. Premier's shares were admitted to trading on the London Stock Exchange's AIM market on 10 December 2012. The Group's operations and principal activities are the exploration, evaluation and development of mineral reserves, primarily on the African continent. The presentational currency of the condensed consolidated interim financial statements is US Dollars. 2. BASIS OF PREPARATION These unaudited condensed consolidated interim financial statements for the six months ended 30 June 2013 were approved by the board and authorised for issue on 16 September 2013. The basis of preparation and accounting policies set out in the Annual Report and Accounts for the year ended 31 December 2012 have been applied in the preparation of these condensed consolidated interim financial statements. These are in accordance with the recognition and measurement principles of the International Financial Reporting Standards (`IFRS') as endorsed by the EU that are expected to be applicable to the consolidated financial statements for the year ending 31 December 2013 and on the basis of the accounting policies expected to be used in those financial statements. The figures for the six months ended 30 June 2013 and 30 June 2012 are unaudited and do not constitute full accounts. The comparative figures for the year ended 31 December 2012 are extracts from the 2012 audited accounts and do not constitute full accounts. The independent auditor's report on the 2012 accounts was not modified, but included an emphasis of matter on going concern. 3. GOING CONCERN These unaudited condensed consolidated interim financial statements were prepared on the going concern basis. The going concern basis assumes that the Group will continue in operation for the foreseeable future and will be able to realise its assets and discharge its liabilities and commitments in the normal course of business. The Group has incurred significant operating losses and negative cash flows from operations as the Group is an exploration stage resource Group. The recoverability of the underlying value of exploration and evaluation assets is entirely dependent on the existence of economically recoverable reserves, securing and maintaining title and beneficial interest in the properties, the ability of the Group to obtain the necessary financing to complete development, and future profitable production. The Group had cash reserves at 13 September 2013 of approximately $40k, and has an undrawn loan facility from the Chairman of $157k available to it. The Directors have prepared detailed cash flow forecasts for the period ending 30 September 2014, taking into account forecast expenditure, available working capital and the existing loan facility. These forecasts indicate that the Group will need to obtain additional loan finance or equity to fund its operations for that period. As set out in the Chairman's Statement, the Chairman is currently in negotiations with several parties to provide funds to the Group. The Chairman also states 100 million AgriMinco shares will be free trading from 1st November 2013 and that ongoing overheads and exploration and development on RHA to facilitate early exploitation will be met pending conclusion of negotiations with potential funders. After careful consideration of those matters set out above, the Directors are of the opinion that the Group will be able to obtain adequate resources to enable it to undertake its planned activities for the period to 30 September 2014 and have prepared these condensed consolidated interim financial statements on the going concern basis. These condensed consolidated interim financial statements do not include any adjustments to the amounts and classification of assets and liabilities that might be necessary should the Group be unable to continue in business. 4. SEGMENTAL REPORTING Segmental information is presented in respect of the information reported to the Directors. Currently the Group is in the exploration phase and no revenue is being generated. The main business segment is that of an exploration group and a corporate administrative entity. An analysis of the Group's non-current assets by geographic location is set out below. 30 June 30 June 31 December 2013 2012 2012 (Unaudited) (Unaudited) (Audited) Non-current assets $ $ $ Zimbabwe 5,288,932 2,556,607 4,848,553 Togo 2,040,498 1,308,391 1,923,847 7,329,430 3,864,998 6,772,400 5. ADMINISTRATIVE EXPENSES Six months Six months Year to to to 31 December 30 June 30 June 2012 2013 2012 (Unaudited) (Unaudited) (Audited) $ $ $ Staff costs 136,233 84,255 391,393 Consulting and advisory fees 196,922 83,170 235,727 Directors' fees 22,606 - 2,868 Audit, accounting and legal fees 242,172 23,036 79,115 Marketing and public relations 40,498 26,100 36,961 Travel 116,016 123,643 219,661 Vehicle 39,212 24,061 36,433 Donations - 25,380 25,088 Office and administration 98,561 62,750 218,444 Realized foreign exchange (gain) loss (181) 16,514 48,037 Aborted listing costs - - 372,240 Share based payment 288,714 - 374,754 1,180,753 468,909 2,040,721 6. TAXATION There is no taxation charge in the period to 30 June 2013 (June 2012: nil, Dec 2012: nil). As an International Business Group, the British Virgin Islands imposes no corporate taxes or capital gains tax. However, the Group may be liable for taxes in the jurisdictions of the underlying operations. To date, the Group has incurred tax losses however a deferred tax asset has not been recognised in the accounts due to the unpredictability of future profit streams. 7. LOSS PER SHARE The calculation of loss per share is based on the loss after taxation divided by the weighted average number of shares in issue during each period. Six months Six months Year to to to 31 December 30 June 30 June 2012 2013 2012 (Unaudited) (Unaudited) (Audited) $ $ $ Net loss after taxation (1,186,807) (493,109) (2,098,269) Weighted average number of Ordinary 335,567,591 47,300,002 69,413,680 Shares in calculating basic earnings per share Basic loss per share (expressed in US (0.4c) (1.0c) (3.0c) cents) Weighted average number of Ordinary 335,567,591 47,300,002 69,413,680 Shares used in calculating fully diluted earnings per share Diluted loss per share (expressed in US (0.4c) (1.0c) (3.0c) cents) As the Group incurred a loss for each period, there is no dilutive effect of share options or warrants. 8. EXPLORATION AND EVALUATION ASSETS Total $ Cost At 1 January 2012 2,512,136 Expenditure on exploration and evaluation 1,290,314 Foreign exchange 4,156 At 30 June 2012 3,806,606 Expenditure on exploration and evaluation 2,898,162 Foreign exchange 19,331 At 31 December 2012 6,724,099 Expenditure on exploration and evaluation 586,664 Foreign Exchange (23,487) At 30 June 2013 7,287,276 Exploration costs not specifically related to a license or project or on speculative properties are expensed directly to profit or loss in the period incurred. 9. TRADE AND OTHER RECEIVABLES 30 June 30 June 31 December 2013 2012 2012 (Unaudited) (Unaudited) (Audited) $ $ $ Sundry receivables 80,000 50,000 151,287 Prepayments 49,635 1,145,133 28,686 129,635 1,195,133 179,973 10. TRADE AND OTHER PAYABLES 30 June 30 June 31 December 2013 2012 2012 (Unaudited) (Unaudited) (Audited) $ $ $ Trade payables 253,850 821,244 107,037 Accruals 85,840 68,541 63,287 339,690 889,785 170,324 11. BORROWINGS Borrowings comprised loans from related and connected parties and were capitalised as equity on Premier's Admission to AIM. 12. SHARES TO BE ISSUED On 27 November 2012, the Group entered into an agreement to acquire the Zulu claims from Mr Richard Dollar, a consultant to the Group. The consideration for this acquisition was satisfied through the issue of $500,000 ordinary shares on Admission to AIM (refer note 13) and $1,500,000 in ordinary shares due to be issued. The quantity of shares to be issued is dependent on the exchange rate at date subsequently this obligation is accounted for as a liability. On 16 September 2013, the Company approved, pursuant to the exercise of its option dated 27 November 2012 to acquire the Zulu claims, the issue and allotment of 48,877,500 new ordinary shares at a price of 2 UK pence per share, being the same price as the placing shares issued on Admission to AIM (refer note 15). 13. SHARE CAPITAL Issued share capital Number of $ Shares On incorporation 50,000 50,000 Subdivision of shares into 14 ordinary shares 650,000 - Issue of shares to acquire ZimDiv Holdings 47,250,002 1,512,000 Limited As at 1 January 2012* and 30 June 2012 47,950,002 1,562,000 Share issues on 4 December 2012: * Shares issued for capitalisation of 2011 56,000,000 3,409,692 loans * Shares issued for services received 14,175,000 453,600 * Shares issued to Admission Placees 75,000,000 2,420,815 * Shares issued for Zulu option, first 15,625,000 500,000 tranche of shares * Shares issued for capitalisation of 2012 118,442,589 3,790,163 loans * Shares issued for advisor fees 8,375,000 269,240 As at 31 December 2012 and 30 June 2013 335,567,591 12,405,510 Reconciliation to balance as stated in the condensed consolidated interim statement of financial position Issued share capital (before issue costs) as at 31 12,405,510 December 2012 Share issue costs - year ended 31 December 2012 (1,398,782) Issued share capital (net of issue costs) as at 31 11,006,728 December 2012 and 30 June 2013 * Premier acquired the ZimDiv Group in a Share Exchange Agreement in advance of the Initial Public Offering. The transaction has been accounted for as a merger of entities under common control and presented in the condensed consolidated interim financial statements as if the Group has been one since from 1 January 2012. 14. NOTES TO THE CONDENSED CONSOLIDATED INTERIM CASH FLOW STATEMENT Six months Six months Year to to to 31 December 30 June 30 June 2012 2013 2012 (Unaudited) (Unaudited) (Audited) $ $ $ Loss before tax (1,186,807) (493,109) (2,098,269) Adjustments for: Depreciation and amortisation 6,054 14,253 25,581 Finance costs - - (4,312) Share based payments 288,714 - 374,754 Operating cash flows before movements (892,039) (478,856) (1,702,246) in working capital Decrease/(increase) in receivables 50,338 (1,093,696) (78,536) Increase in payables 169,366 736,219 21,070 Net cash outflow from operating (672,335) (836,333) (1,759,712) activities 15. EVENTS AFTER THE BALANCE SHEET DATE On 5 July 2013, the Company received final approval from the TSX Venture Exchange (`TSX-V') for the acquisition by AgriMinco Corp. (`AgriMinco') (formerly Ethiopian Potash Corp.) of its Togo and Mali subsidiaries. The Company now holds 120 million new shares in AgriMinco, representing approximately 42% of the issued and outstanding shares. These shares, except as mentioned below, are subject to a four month holding period and will be tradeable from 31 October 2013. Of these shares, 20 million shares relating to the sale of its Mali subsidiary will be held in escrow pending TSX-V approval of technical and legal reports being satisfactorily submitted prior to 30 June 2014. If approval is not forthcoming the Mali subsidiary transaction will be unwound. As part of the approval of the transactions, the Company has appointed two representatives to AgriMinco's board. On 17 March 2011, the ZimDiv Group entered into an Option Agreement with Mr C Liebenberg and Ms C Correia (`Liebenberg Option') for the right to initially prospect for base minerals and precious metals with an option to purchase a block of mineral claims located in Zimbabwe. The purchase price was $150,000 less any claim maintenance costs paid by the Group and the agreement was for a term of 12 months with the right to extend for a further 12 months under the same terms and conditions. On 17 February 2013 the Liebenberg Option was extended for a further 6 months at a monthly option fee of $4,000. On 28 August 2013 the option agreement was extended for a further 6 months expiring 28 February 2014 at the same option payment price with an increase in the exercise price to $156,000. On 16 September 2013, the final share payment consideration due to Richard Dollar in respect of the exercise of the Zulu option was settled. The consideration is US$1.5m (Â£978k) satisfied by the issue of 48,877,500 new ordinary shares at an issue price of 2 UK pence per share to Alpha International Business Limited, a nominee elected by Richard Dollar, a director of the Company's Zimbabwean subsidiaries.

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