ZIMBABWE-focused miner, Premier African Minerals (Premier), seeks to acquire a further 7% stake at Namibian MN Holdings Limited (MNH) for US$700 000, a move expected to be a cash-generative asset supportive of group overheads in the near future.
BY MTHANDAZO NYONI
The acquisition of an additional 7% shareholding would bring Premier’s stake in MNH, which owns the Otjozondu Manganese Mining project in Namibia, to 19%.
Currently, the shareholding stands at 12%.
The mining concern, which owns the RHA Tungsten, Zulu Lithium and Tantalite Projects in Zimbabwe, said the deal was, however, still subject to shareholders’ approval.
“The board of Premier African Minerals Limited is pleased to announce that it has today (May 6, 2020) agreed to acquire a further 7% in MN Holdings Limited, the owner and operator of the Otjozondu Manganese Mining Project in Namibia,” the group said in a statement.
“The purchase consideration of US$700 000 is payable in new Premier shares and is entirely dependent on shareholder approval. On completion, Premier’s interest in MNH will increase to 19%,” it said.
Premier chief executive George Roach said the proposed shareholder increase in MNH was based on the same valuation formula applied to its initial acquisition, effectively an independent valuation of plant and machinery, and does not factor in any upside into the price calculation.
He said the transaction will require shareholder approval that will be sought at a special general meeting (SGM).
“Nevertheless, this does represent a more significant stake in what we expect to be a cash-generative asset supportive of group overheads in the near future and comes on the back of a sharp increase in the price for manganese. I do expect to update the market soon in regard to developments at RHA and details related to the required SGM,” the Premier boss said
The company said the sale and purchase agreement was conditional on shareholder consent that would need to be obtained within 30 days from the date of the announcement.
Meanwhile, Premier has announced that the Industry and Commerce ministry has indicated that while they cannot conclude the negotiation in regard to RHA under the COVID-19 lockdown, they have nevertheless provided $2 500 000 (equivalent to US$108 806 at the official bank exchange rate), in interim funds that are adequate to cover holding and security costs at RHA for an extended period.
Roach said: “This agreement provides a further cash buffer as we approach finality in regard to both our EPO application at Zulu Lithium (Pvt) Limited and the ongoing negotiations at RHA Tungsten Private Limited in Zimbabwe.”
He also said they entered into a secured US$290 000 investment agreement before costs with D-Beta One EQ, Ltd, YA II PN, Ltd and Riverfort Global Opportunities PCC Limited, collectively.
Roach said the annual interest rate payable on the outstanding investment amount is 10%.
Premier 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 grassroots 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.