Premier African Minerals Limited RHA Tungsten Mining Operations - Update (7007L)

TIDMPREM

RNS Number : 7007L

Premier African Minerals Limited

05 October 2016

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

For immediate release

5 October 2016

Premier African Minerals Limited

("Premier" or the "Company")

RHA Tungsten Mining Operations - Update

Available Tonnage and Processing Plant Upgrades

Premier African Minerals Limited (AIM: PREM), the London quoted mining exploration and production company, is pleased to report that a review of immediately available tungsten rich material at its RHA Tungsten Operations ("RHA") in Zimbabwe has been completed and this review has shown that there is sufficient tonnage immediately available both in the open pit and underground operations to support an initial 3 years' of operations at 39,000 tons per month once the proposed use of X-Ray Transmission ("XRT") system for ore sorting has been installed at RHA's ore processing plant. Target date for installation is the end of November this year.

The XRT ore sorter is expected to be supplied on a toll basis and the company is fully funded for this RHA upgrade. At the planned 39,000 tonnes per month of ore mined, it is estimated that RHA should be producing about 10,000 metric ton units (mtu) of tungsten trioxide concentrate per month, which is equivalent to approximately US$1.12 million per month in gross revenue at the current net price of US$112 per mtu, which would be received by RHA. A mtu is equal to ten kilograms of tungsten tri-oxide equivalent contained in a concentrate and is the standard weight measure of wolframite. Tungsten concentrate prices are generally quoted as US dollars per mtu discounted off the European price for ammonium para-tungstate (APT).

RHA Management budgets a monthly total expenditure on an EBITDA basis at $825,000 when XRT is fully operational and projected tonnages, recoveries and grades are achieved.

George Roach, Premier's CEO, commented:

"The review at the Company's RHA tungsten mine indicates that we have at least 3 years of tungsten rich material immediately available from the open pit and underground operations. We are targeting a mining and processing rate of 39,000 tonnes per month, with 23,000 tonnes per month coming from the open pit and 16,000 tonnes per month scheduled from underground. The successful installation of the XRT ore sorting unit, in combination with sufficient tonnage able to be mined with little or no development will result in significantly higher feed grades to the plant with higher production at lower cost and the Company is now pushing hard to increase production and bring the project into profit by the end of December this year."

RHA Tungsten Mine - Processing Plant Upgrades:

X-Ray Transmission ("XRT") test work on the RHA tungsten ore was originally commissioned back in October 2015 with an initial sample, which showed excellent results. As a result of this original test work further test work was subsequently conducted earlier this year by processing specialists Cronimet Mining Processing South Africa ("Cronimet") on a larger 7 ton bulk sample of the RHA mine's tungsten ore. The test work showed that run-of-mine ore with a head grade containing 1.62 kg per tonne (0.162%) of tungsten oxide (WO(3) ) resulted in the XRT sorter achieving a concentrate grade of the ore to the plant prior to final processing of 86 kg (8.6%) WO(3) per tonne.

The feasibility of the installation of a 50 tonne per hour XRT sorter into the existing crushing circuits at RHA has already been established and the Company is in final negotiations with the supplier of the XRT sorter to supply and install the unit at the RHA processing plant by the end of November 2016.

RHA Tungsten Mine - Available Tonnage:

The review of resources contained in the open pit projected to a further 20 meter depth, and bulk mined with no stripping ratio, indicates the immediate availability of 1.030 million tonnes of open pit resource grading at 1.5 kg per tonne WO(3) in the inferred category as included within the SAMREC compliant resources reported by the Company in May 2014 and October 2014 ("October 2014 Resource Estimate").

The Company's estimate of underground material accessible from existing underground development (without the need for further drives or shafts), is 505,000 tonnes. RHA mined and processed material from underground in September 2016 and the recoveries indicated a ROM grade in excess of 4kg per tonne. The Company's technical team is confident of the grade continuity in the known underground system. No cut-off grades were applied to these estimates of available tonnages due to the planned use of XRT ore sorting.

Historically, the Company reported resources at RHA in the October 2014 Resource Estimate in regard to lodes 1 and 2 systems only. The available tonnage estimate in the underground workings is in respect of lode systems 4 to 7 and relates only to material contained off existing developed drives and semi-developed stope areas from 100 meters below the 870 level to surface. No SAMREC compliant resource estimate has yet been prepared or reported in respect of lode systems 4 to 7. This ore body remains open on strike and at depth and ongoing underground sampling and lateral drilling expected to commence this quarter, may significantly increase the confidence and size of the target underground resource as and when a SAMREC compliant resource estimate on this section is reported.

Qualified Person:

Gerard Evans, Resource Geologist for Premier African Minerals, has reviewed and confirmed the statements related to open pit and underground resources set out herein. Gerard Evans has 25 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.

Forward Looking Statements:

Certain statements in this announcement, are, or may be deemed to be, forward looking statements. Forward looking statements are identi ed 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 re ect 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.

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

Glossary of Technical Terms

 
 "(Fe, Mn)            Chemical composition of wolframite 
  WO(4) " 
 "Indicated           That part of a Mineral Resource for 
  Resource"            which tonnage, densities, shape, physical 
                       characteristics, grade and mineral 
                       content can be estimated with a reasonable 
                       level of confidence. It is based on 
                       exploration, sampling and testing 
                       information gathered through appropriate 
                       techniques from locations such as 
                       outcrops, trenches, pits, workings 
                       and drill holes. The locations are 
                       too widely or inappropriately spaced 
                       to confirm geological and/or grade 
                       continuity but are spaced closely 
                       enough for continuity to be assumed 
 "Inferred            That part of a Mineral Resource for 
  Resource"            which tonnage, grade and mineral content 
                       can be estimated with a low level 
                       of confidence. It is inferred from 
                       geological evidence and sampling and 
                       assumed but not verified geological 
                       and/or grade continuity. It is based 
                       on information gathered through appropriate 
                       techniques from locations such as 
                       outcrops, trenches, pits, workings 
                       and drill holes that may be limited 
                       or of uncertain quality and reliability 
 "kg/t"               Abbreviation for kilogramme per tonne 
 "Lode"               Previous workers identified continuous 
                       to semi-continuous mineralised quartz 
                       veins as Lodes 
 "Measured            That part of a mineral resource for 
  mineral resource"    which quantity, grade or quality, 
                       densities, shape, and physical characteristics 
                       are so well established that they 
                       can be estimated with confidence sufficient 
                       to allow the appropriate application 
                       of technical and economic parameters, 
                       to support production planning and 
                       evaluation of the economic viability 

                       of the deposit. The estimate is based 
                       on detailed and reliable exploration, 
                       sampling and testing information gathered 
                       through appropriate techniques from 
                       locations such as outcrops, trenches, 
                       pits, workings and drill holes that 
                       are spaced closely enough to confirm 
                       both geological and grade continuity 
 "Mineral resource"   Concentration or occurrence of diamonds, 
                       natural solid inorganic material or 
                       natural fossilized organic material 
                       including base and precious metals, 
                       coal, and industrial minerals in or 
                       on the Earth's crust in such form 
                       and quantity and of such a grade or 
                       quality that it has reasonable prospects 
                       for 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 
 "SAMREC"             South African Code for Reporting of 
                       Mineral Resources and Mineral Reserves 
 "Tungsten"           Metallic element known also as wolfram 
                       with the chemical symbol W and atomic 
                       number 74 
 "wolframite"         Mineral name for iron-manganese tungstate; 
                       (Fe,Mn)WO(4,) an ore of tungsten. 
                       The ratio of iron to manganese varies; 
                       iron-rich wolframite is known as ferberite 
                       FeWO(4) , manganese-rich wolframite 
                       is known as hübnerite MnWO(4) 
 "WO(3) "             Tungsten trioxide 
 "XRT technology"     X-ray sorting technique where specific 
                       mineral (e.g. wolframite) bearing 
                       rock can be separated from specific 
                       mineral-poor rock and other impurities. 
                       This upgrades in metal terms the material 
                       feed to the plant energy and lowers 
                       the tonnage of rock requiring processing 
                       which results in substantially improved 
                       the economics for mineral processing 
                       operations. 
 
 

Enquiries:

 
                         Premier African Minerals     Tel: [phone] 
 Fuad Sillem              Limited                      922074 
----------------------  ---------------------------  ------------------ 
 Michael Cornish         Beaumont Cornish             Tel: +44 (0) 207 
  / Roland Cornish        Limited                      628 3396 
                          (Nominated Adviser) 
----------------------  ---------------------------  ------------------ 
 Jerry Keen/Edward       Shore Capital Stockbrokers   Tel: +44 (0) 207 
  Mansfield               Limited                      408 4090 
----------------------  ---------------------------  ------------------ 
 Charles Goodwin/Aidan 
  Stanley /Dominic       Yellow Jersey PR             Tel: [phone] 
  Barretto                Limited                      085 670 
----------------------  ---------------------------  ------------------ 
 

Notes to Editors:

Premier African Minerals Limited (AIM: PREM) is a multi-commodity mining and natural resource development company focused in Southern and Western Africa with production started at its flagship RHA project in Zimbabwe.

The Company has a diverse portfolio of projects, which includes tungsten, rare earth elements, gold, lithium and tantalum in Zimbabwe and Benin, encompassing brownfield projects with near-term production potential to grass-roots exploration. The Company also holds 2 million shares in Circum Minerals Limited ("Circum"), the owners of the Danakil Potash Project in Ethiopia, which has the potential to be a world class asset. At present those shares are valued at US$4 million based on the latest price at which Circum has accepted subscriptions.

ENDS

This information is provided by RNS

The company news service from the London Stock Exchange

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October 05, 2016 02:00 ET (06:00 GMT)