Premier African Minerals Share Discussion Threads

[bushranger] 24/2/2019 23:09

@tedoby2 The situation now is that PREM are running on empty/or have run out of funds for working capital as Aug 18 raise was only to last until Dec 18. The proposal to buy 50% of KME/ HBR will see current shareholders dilluted by 3.9 BILLION shares. In my opinion this deal has been spun so as to give something other than a beggers bowl for next Primary Bid raise. If PIs fund this madness GR will continue to have his company to continue to drive into the ground for another few years.

[tedoby2] 24/2/2019 22:16

The situation now is very different Val and Prem isnt just a pile of dirt - whatever that means.

No one knows what the future holds but as I see it GR will not be at the helm going forward whatever happens. FWIW I agree GR has made mistakes. But in my eyes they were proportional.

You're a highly intelligent person. That's clear. But with due respect you shouldn't be taking a reference from the past to look forward as you're doing.

[valhalla2017] 24/2/2019 21:15

Ted - so if I told you two years ago that at the beginning of 2019, rha would be in c&m, Zulu would just be a pile of dirt, and circum would be ‘close’, what would you have replied. I’m sure some explanation how there was no way that would occur because GR knows what he’s doing. And yet here we are.

Once GR gets his placing off and covers his salary we could easily be in the same exact position in another two years.

Remember when folks were demanding shareholder value creation from GR early last year. What did GR do instead. Decimate the share price

[tedoby2] 24/2/2019 20:28

Val there isnt the close similarity between HBR & RHA that you're trying your best to proposition on here.

They're entirely different and with respect you don't know what the immediate future plans are on HBR. The past situation on RHA cannot be used as a guide.

THe drilling at HBR won't be done to better uderstand the certified resource. It'll be done to increase it!

I've already given reasons why HDR is very different to RHA. But the big one as far as you're concerned mind is that GR is unlikekly to be at the helm on HDR!

[valhalla2017] 24/2/2019 18:19

Ted - this acquisition of HBR is just GR trying to continue the gravy train. Now he’s talking about DD, then it’s going to be additional drilling to better understand the resource, then new equipment etc.... sound familiar?

[tedoby2] 24/2/2019 17:26

In Newquay Cornwall last I heard.

[thelogman] 24/2/2019 16:41

Comical, where is xulu with 1 pound share,

[tedoby2] 24/2/2019 15:07

No Val.

HBR is entirely different to what RHA was.

Different margins and markets. The financial fundamentals are very different too.

But moreover a radically different partnership arrangement and agreement.

In fact its quite hard to draw any similarities between the two. They're apples and pairs I'm afraid!

[valhalla2017] 24/2/2019 14:54

Ted - wasn’t this the exact same thinking behind RHA? Historical mine, cheap workforce etc... and how has that panned out?

[tedoby2] 24/2/2019 14:06

I can't be sure but perhaps this gold opportunity is one of at least four ways he may have been thinking of;-

Honey Badgers Ran mine has two mining locations on it’s current licensed area that it plans to put back into production. Ran & Fishpond being one and Kimberley the other.

Both locations were operational at different times during the last century. Ran & Fishpond between about 1925 and 1970 during which time it produced 2.3m grams Au at an average grade of 6.6g/t and Kimberley between about 1905 and 1990 during which it produced 6.5m grams Au at an average grade of 7.0g/t by the looks of things. So it appears 8.8m grams or 260k oz’s Au were produced overall when it was operational. I have no details of Cu production but we should make a special note of the historic Au grades which were particularly high.

There is a JORC resource of 535k oz’s Au at just 2.1g/t and 0.33% Cu for the mine. There's no date given for the certification but the disconnect between the Au grades and the change from JORC to SAMREC suggests to me it was done early in the LOM. The current licensed area is 188Ha and a further 108Ha is under application to extend mining operations together with an area designated for new tailings and infrastructure improvements. Even though the current resource is well delineated over the two mining locations further and extensive drilling is also planned but over the larger area with a target to double the resource. The LOM if that's achieved should be more attractive at just over 20 years unless the ROM is increased too of course.

The areas are ready for open pit development and processing in the short term. The use of a third party off site sulphide treatment plant will be made available in the short term whilst a new facility is built on site is appears to be part of the start up plan.

The ramp up to full production within two years is relative quick and at that stage target production is forecast to be 36k oz’s Au & 1300t’s Cu a year if everything goes to plan. C3 costs or AIC’s as they're sometimes referred to are forecast to be low at $750/oz Au. That could be due to the physical shape of the ore bodies and resulting low strip ratios. But moreover I think it's the fact that there will be little or no debt and finance costs. The skills needed are also in place and there's a large labour force available locally in Bindura.

I believe GR mentioned heap-leaching in the Webinar perhaps because of the sulphide content. But for me I doubt it will be considered much further. It’s a red herring I think. The Au grades look marginal if not a little too high to lend themselves to that process. But I think the climate would likely create too much down time. Moreover with a Cu content at the grades we’re looking at the copper would “drink” the Cyanide and probably make the process uneconomical. Best take a leaf out of all the neighbouring miners books too and keep tank leaching in the plan is my view..

So a “fag-packet221; financial appraisal as things stand should tell us that with Cu in the mix at 1300t’s p.a and 0.33% grade the increase from the price of gold to the all important “gold equivalent” price should be about 20%. The Cu price being $7000/t currently.

Therefore at today's prices revenue should be 36k oz’s at $1580/oz AuEq or thereabouts. So $57m. C3 Costs should be 36k oz’s at $750/oz. So $27m and annual net Profit should therefore be in the region of $30m or £24m at today's exchange rate. Avery attractive net profit of over 50%. Assuming from there a P/E ratio of 10 is reasonable in an earning metric value calculation that would give HB a notional Market Cap of £240m in its own right.

My guess is that Prem might have 10bn shares in issue at that stage and again assuming that's about right HBR would give Prem a contribution to its share price of 1.2p in a 50/50 j.v. partnership at the two year milestone. Working back from that in theory there's no reason why the opportunity shouldn't add at least 0.30p to Prems share price of entering into an a formal agreement in less than three months. So with a 6,000% return on investment in two years using today's Au & Cu prices the HBR j.v. opportunity doesn't seem too shabby to me.

The diversification and risk mitigation the opportunity has for Prem could be as important as fundamentals like these. As attractive as they may appear.

[valhalla2017] 24/2/2019 13:49

I thought when GR said last week that he was going to start restoring shareholder value I didn’t realise he meant just asking the shareholder group to attack any criticism of GR. for a sec I thought he meant real concrete actions. Silly me.

[tedoby2] 24/2/2019 13:22

bushranger you say "There is no way anyone private or institutions would give PREM $5.1M." So why do you think Prem needs to look for those two sources "private or institutions" to buy shares to the value of $5.1m?

Also how do you know this is true? "There will need to be a raise for cash to provide working capital on top of the dillution of 3.9 BILLION shares."

GLA genuine holders

[bushranger] 24/2/2019 11:26

@Napom... And just a reminder that people who have listened to the supporters of PREM over the last two years have lost 80% + of their capital. Not a lol matter. Just total contempt by PREM pushers for the average investor.

[bushranger] 24/2/2019 11:22

@mihn2. The issuing of 3.9 BILLION PREM shares to cover $5.1M rather than giving cash in my opinion is not better. To me it shows GR is desperate. There is no way anyone private or institutions would give PREM $5.1M. PREM have no money to offer, working capital was set to run out Dec 18. If Honey Badger mine was so great and so near production & KME have all the equiptment why not mine it themselves? There will need to be a raise for cash to provide working capital on top of the dillution of 3.9 BILLION shares. Sharehokders here are in my opinion going to suffer big time. As far as if you believe GRs podcast. VOX had to change their rules last year due to the what GR said and then subsequently did.

[mhin2] 23/2/2019 23:10

I have been in (and out, and in and out) and out for almost a decade. However, am I the only one in thinking that GR's tone was different in the recent podcast. I like the fact that Prem is going to issue shares for 50% of the gold and equipment company- I prefer that to a raise. However
a)there will be a raise but..
b)If (and I feel that it might happen now) RHA comes back online with a favourable deal involving cash then the fund raise might be higher than the current share price.

Finally it was interesting that GR did not mention Circum, although it would be good if GR did not have to reduce PREMs holding (2022 for production, and financing being explored since Nov 2018)

GR is getting old and ready to retire; has a lot of `skin' in the game. I am sure he will want to monetise it if he can. Although Mugabe has gone, it is still not clear how the `heirs' will attempt to manage the economy. Perhaps, the deal with PREM will give an indication.

I am not an expert. However, I expected change after Mugabe stood down. GRs RNS' (if they are to be believed) indicate that dialogue has been opening up since August. Lets see if things get moving- Zimbabwe certainly needs to get its economy going, but the Jury seems to be out on whether it will happen, although it does seem that Zim. is seeking to attract FDI.

[napom] 23/2/2019 17:25

Potential losses for shorting a stock is unlimited....just a reminder for next week lol

[thelogman] 22/2/2019 21:16

Since May last year there has been plenty of opportunity to trade this rubbish, hi molj hope you well like crazy and indeed woody.

[valhalla2017] 22/2/2019 21:00

From the amount of times my name is mentioned on lse you would think I was single handedly moving the share price I wish!

Everyone knows the share price performance is tied to GRs inability to create shareholder value and his diluting the company into oblivion. Now he’s proposing to dilute the company by another 50% and folks are wondering why the market is not jumping up in joy. Ha.

[bushranger] 22/2/2019 17:41

@bigboots you ask "what happens if KME and HBR do a deal and take shares in lieu?" I take it from this statement that you have not even read the RNS setting out the KME/HBR deal? If you read the 14th Feb RNS ( the offical market staement) put out by PREM you would see that the deal WILL involve KME taking PREM shares in lieu...to the value of $5.1M. ie 3.9 BILLIION PREM shares.I stated 'raise' because that is effectively what it is.. The result is exactly the same. Why is PREM doing this rather than paying cash?. My opinion would be that PREM knows it could not raise the money for it, thats why Novembers plans fell through. Institutions would not give money to PREM and there is no way they could raise that amount of money from PI's no matter how much it is spun/pushed. Why are KME wanting this deal? I'd say they probably have as dud an assest as PREM and are happy to take what they can get..thats my opinion. Who is going to bear the cost in dilution and further share price destruction..the average PI investor in PREM. PREM has no money to even fund its working capital, so there is going to have to be a raise for actual cash
on top of the deal to pay expenses and cost of trying to get up and running the new aquisition, plus RHA, plus any expenses that need to be backdated plus wages for GR & Co. If PI fund this madness they in one way deserve to lose their money. I just hope the new/ naive investors dont get sucked in.

[valhalla2017] 22/2/2019 16:57

well that was a dud of 'you would not want to be out of this over the weekend' trade.

GR might have to replace Napom - folks are starting to catch on.

[bigboots] 22/2/2019 14:49

bushranger, but what happens if KME and HBR do a deal and take shares in lieu ? could be interesting

[bushranger] 22/2/2019 13:03

@bigboots The chances the raise will be at 0.10p-0.12p is small. It will more likely be around 0.08-0.09p. Lets assume though the raise will be at ONE TENTH OF ONE PENCE (0.1p). A raise for the KME & HBR deal ALONE will add 3.9 BILLION shares. in August PREM raised 750k for workinfg capital to last until December 18. It is thought PREM has been trying to conserve this money and stop itself going bust by being in shutdown mode and defering employees wages. So how much working capital is going to be needed to not only to fund PREM, back pay workers?? and fund working capital for the none productive Honey Badger mine?? At least HUNDREDS OF MILLIONS of shares minimum. NO this is NOT cheap.

[bigboots] 22/2/2019 10:28

Has George finally got the show on the road. The podcast was mildly bullish, the RNS this week was very positive and the fund raise, if it comes will be small

At 0.10/0.12p looks cheap