AIM-listed Premier African Resources says it will stop operations at its RHA Tungsten mine in Kamativi, until it agrees on a viable financing agreement with its partner, Zimbabwe’s National Indigenisation and Empowerment Board (NIEEB).
NIEEB which holds 51 percent of RHA Tungsten owes Premier $20 million and has not contributed towards the project. Premier owns the RHA Tungsten plant and equipment; has been the sole funder.
Premier partnered NIEEB in 2015 in a deal which made the miner compliant with the local empowerment act then. Government has since limited thelaw’s application to diamond and platinum mining.
“RHA will complete one final shipment before mid-January and will then suspend production until such time as a commercial and viable agreement is reached with NIEEB to ensure a long-term future for RHA,” chief executive George Roach said in a trading update.
“Premier will continue to incur minimal ongoing care and maintenance costs in relation to RHA whilst the position is resolved”.
Last December RHA failed to meet profitable production levels.
Premier also owns Zulu lithium mine near Fort Rixon in Matabeleland South, which it plans to list separately in London.
The Zulu project has an estimated 20.1 million tonnes grading 1.06 percent lithium oxide.
“The listing is intended to take place as soon as possible, subject to regulatory and other approvals. Premier intends, subject to appropriate legal and taxation advice, to distribute to Premier shareholders at the time of listing a substantial proportion of Premier’s retained interest in Zulu Newco,” said Roach.
“It is evident that a separate listing of Zulu Lithium has the potential to unlock significant value based on comparable hard-rock lithium projects.”