Otjozondu Loan Extension and Funding

RNS Number : 1146K

Premier African Minerals Limited

31 August 2021

 

31 August 2021

Premier African Minerals Limited

Otjozondu Loan Extension and Funding

The Board of Premier African Minerals Limited ("Premier" or the "Company") is pleased to announce it has agreed to increase the existing loan agreement with Otjozondu Mining (Proprietary) Limited ("Otjozondu Loan"), to be funded by a new Loan Agreement with Mr Neil Herbert, the Chairman of the Company ("Director Loan").

George Roach, CEO commented : "Otjozondu has contemplated for some time now a change in the existing off take partner and the payment terms. The existing contract is subject to a 90-day notice period and appropriate notice has now been given.

This allows both Premier and Otjozondu to proceed with alternative negotiations intended to improve the existing arrangements and to secure advance funding to support planned expansions in mining operations.

On receipt of notice, the existing offtake partner has varied the previous trade terms, and this results in a delay in settlement. The loan supports this and is expected to be of a short-term nature."

Otjozondu Off-Take Partner

Otjozondu Mining (Proprietary) Limited ("Otjozondu") have issued their existing off-take partner with the required 90-days' notice, the contract will terminate on the 18 November 2021. Otjozondu remains in ongoing discussions with its existing off-taker on improved commercial terms including the required expansion capital to assist with existing mining operations.

Premier is equally in advanced discussions with other potential off-take partners to assist Otjozondu in securing the best possible financial terms from its future off-take partner.

Otjozondu Loan

On 3 June 2021, Premier provided a US$260,000 loan direct to Otjozondu for use at Otjozondu Manganese Mining Project in Namibia ("Initial Amount"). The secured loan with an interest rate of 20% per annum is repayable in US$25,000 instalments on each shipment of Manganese commencing from the beginning of September 2021.

Premier has now agreed to extend the existing loan by US$180,000 ("Extension Amount") thus increasing the total loan amount to US$440,000. Premier has further agreed that the repayment term of the Initial Amount will only commence on the first shipment of manganese following the signing of a new off-take agreement.

The parties have further agreed that the Extension Amount will be immediately repayable on the signing of the new offtake agreement from proceeds from the new off-take agreement.

Director Loan

Mr Neil Herbert has made available a loan of US$180,000 to the Company. Under the terms of the Director Loan, the loan is both unsecured and will not attract any interest and is repayable in full by the Company on the signing of a new off-take agreement at Otjozondu or 90 days following signing of the Director Loan, whichever occurs sooner.

The purpose of the Director Loan is to provide funding to the Company to allow the amendment of Otjozondu Loan while Premier, acting collectively with Otjozondu, looks to secure the best possible off-take funding package.

Further Disclosures

Mr Neil Herbert has a formal engagement with MN Holding Limited ("MNH"), the operator of Otjozondu, to act as consultant under which he is entitled to a 10% fee on any overall purchase of MNH, payable by MNH.

Mr Neil Herbert has a beneficial interest in Cambrian Limited ("Cambrian") which has an existing loan to MNH of US$450,000.

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.

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 as it forms part of UK Domestic Law by virtue of the European Union (Withdrawal) Act 2018.

The person who arranged the release of this announcement on behalf of the Company was George Roach.

Enquiries:

George Roach	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]
Matthew Bonner	EAS Advisors LLC	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 19% interest in MN Holdings Limited, the operator of the Otjozondu Manganese Mining Project in Namibia.

ENDS

 

END

 

 

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