Mining company Premier African Minerals, which owns 49% of the RHA tungsten mine (RHA), in Zimbabwe, and is currently the only financial supporter for operations at the mine, reports that the ongoing financial discussions with the National Indigenisation and Economic Empowerment Fund (NIEEF), which has a 51% interest in the mine, are progressing well.

“Premier has been the sole funder of RHA to date, although it only has a 49% interest –proposed new legislation in Zimbabwe will permit 100% foreign ownership,” explains Premier CEO George Roach.

At a meeting in Harare in January, NIEEF has reaffirmed the current policy change in Zimbabwe with regard to the indigenisation requirements and has indicated NIEEF’s willingness to agree a mechanism to restructure its ownership of RHA.

“I am pleased that discussions are progressing well and that NIEEF has confirmed their commitment to the development of RHA. We hope to report on these discussions in the coming weeks,” Roach says.

Discussions on proposed contract amendments between Premier and NIEEF to achieve this were expected to progress during the last weeks of January. Further, Premier is currently in discussions with the fund, as well as other interested groups, to review alternative financing arrangements that will allow for further external funding for RHA.

RHA
The RHA project spans 1 800 ha, is divided into 50 mineable mineral blocks and is located near Hwange, in Zimbabwe.

Premier owns ten of the 50 mineable mineral blocks, with a preliminary economic assessment (PEA) on the project having been completed in August, 2013. The mine plan presented in the PEA consists of an openpit, followed by an underground operation, with combined life-of-mine of six years at a run-of-mine production rate of 192 000 t/y. Operations at the mine started in August 2016.

The underground mine produces a wolframite concentrate that is measured in metric ton units. The company explains that every metric ton unit of wolframite concentrate is equivalent to 10 kg of tungsten trioxide contained in a concentrate at about 60%.

Premier has, since the completion of the PEA, commissioned consulting firm Bara Consulting to update the financial model of the project to demonstrate the effect of the additional work that has been completed since the publication of the PEA on the product valuation.

Continuing Operations
The company explains that continuing operations at RHA depend on additional sources of capital being provided. RHA was scheduled to complete one final shipment before mid- January, after which it was scheduled to suspend production until such time as a commercial and viable agreement is reached with the NIEEF to ensure a long-term future for RHA.

Premier has stated that it will not provide any further finance, other than a bridging facility for concentrate ready for shipment.