Chronicle Editor
Oliver Kazunga, Senior Business Reporter
ZIMBABWE mining group, Premier African Minerals, which owns RHA Tungsten project in Hwange, has commended the Government for facilitating progress towards operationalising the tungsten investment.
In 2019, Premier announced that it had signed an agreement with the National Indigenisation and Economic Empowerment Fund (NIEEF), and the deal was expected to see Government advancing US$6 million to commence production at the RHA Tungsten project.
The mining group holds 49 percent in RHA Tungsten mine while the Government, through NIEEF, controls 51 percent.
Early this year, the mining group announced that NIEEF was re-evaluating its ongoing involvement in the RHA Tungsten project.
In a trading update released this week, Premier African Minerals said: “The Ministry of Industry and Commerce has now confirmed in writing that the directors of RHA previously appointed by National Indigenisation and Economic Empowerment Fund (NIEEF) should continue to act in that capacity, effectively removing one of the stumbling blocks to finding a mutually acceptable solution to the funding and equity dilemma at RHA.
“The Ministry had required that the board of RHA be properly constituted before final decisions could be taken by the Ministry and NIEEF in regard to the breach by NIEEF of their agreement to fund the development of a new decline shaft at RHA and the cost to bring the mine back into production.”
It said Premier now intends to convene a meeting of the directors of RHA to agree a variation to the terms of tungsten firm’s shareholder agreement.
This would allow Premier to increase its shareholding in the Matabeleland North-based mining company unless NIEEF has remedied the ongoing breach under the revised Management Agreement by providing the outstanding funding on or before the date of the meeting.
Premier said NIEEF had agreed to invest US$6 million into RHA in accordance with the recommissioning budget, and after converting the RTGS dollars funding provided by NIEEF into United States dollars, the current shortfall is US$4,94 million, including the further funding of US$108,806 the fund agreed to provide as announced in May this year.
The mining group has further agreed with its offtake partner, to independently revalidate the conclusions reached in the Technical Report and Development Plan (as announced on 3 October 2018) that RHA could operate profitably on a reduced throughput of 6 000 tonnes per month from underground operations undertaken through the existing vertical shaft.
“On satisfactory conclusion of this review, it is anticipated that our offtake partner will then be in a position to consider fully funding the return to production (estimated to require funding of US$1,7 million), subject to resolution of the present impasse with NIEEF,” it said.
On the Zulu lithium and tantalum project, Premier said based on recent communication with the Ministry of Mines and Mining Development, it continues to be encouraged that finality in regard to its Exclusive Prospecting Order application is achievable in the near future.
“Whilst the lengthy delay has been disappointing, our internal review of the publicly available historic data on the potential prospecting area is encouraging and we look forward to further updating the market when the EPO is awarded,” said Premier. — @okazunga.
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