Name and Location
RHA tungsten project, Zimbabwe.

Client
Premier African Minerals (49%).

Project Description
The preliminary economic assessment (PEA) on the project was completed in August 2013. The mine plan presented in the PEA consists of an openpit, followed by an underground operation, with a combined life-of-mine of six years at a run-of-mine production rate of 192 000 t/y or 16 000 t/m.

Premier Mining has since commissioned Bara Consulting to update the financial model for the project to demonstrate the effect on the project valuation of the additional work that has been completed since the publication of the PEA. The financial model outlines a low-capital implementation strategy.

Operations will start with an openpit mine, constrained to an 18-month production period, and then progress to underground operations. The project has an updated measured mineral resource of 320 032 t at 6.52 kg/t of tungsten, indicated resources of 1.23-million tonnes at 8.35 kg/t of tungsten, and inferred resources of 1.18-million tonnes at 2.85 kg/t of tungsten.

Net Present Value/Internal Rate of Return
Bara’s financial model reflects a pretax net present value of $15.8-million and an annualised internal rate of return of 286%, calculated on a quarterly basis.

Value
The project has a start-up capital estimate of $4.15-million from $4.77-million.

Duration
Production is assumed to start in April, with pit preparation starting in March.

Latest Developments
An implementation study report on the low-capital openpit start-up strategy for Premier African Minerals’ RHA Tungsten project has determined a lower estimated preproduction capital cost of $4.15-million.

In October last year, the Aim-listed company provided details of the start-up strategy, which had set out an initial estimated preproduction capital requirement of $4.77-million.

Premier has highlighted that the implementation study report has maintained the June 2015 targeted date for first production, while operating costs have been reduced to $89.1 a metric tonne unit (mtu) of tungsten trioxide (WO₃).

“The report confirms our strategy for RHA and supports our conclusions that the openpit is projected to generate sufficient surplus cash to allow for the start of repayment of loans to be made to RHA by Premier, and to finance the build of the underground operations,” says Premier CEO George Roach.

He further notes that Premier is still in negotiating potential additional funding for the project.

Further, while the company has been offered offtake agreements for WO₃ over the life of the mine, it will investigate other alternatives given the fact the mine has the potential to be “a significant, stable and long-term producer”.

The RHA project is expected to process 8 000 t/m of run-of-mine ore and produce, on average, 92 t/m of concentrate at 63% WO₃ over a 22-month period.

Meanwhile, Premier has placed an order for a $2.2-million processing plant for the RHA tungsten project, advancing the miner’s goal of reopening the mine.

The process plant is designed to meet a throughput of 16 t/h, or 8 000 t/m, and is expected to support wolframite recovery of 82.8%.

This production rate excludes any consideration of a preconcentration circuit which, if implementead in future, could increase the plant throughput fivefold at a 20% recovery loss.

The modular plant will be built in Johannesburg by Appropriate Process Technologies, after which the modules will be containerised and trucked to site, where the process plant is expected to be fully commissioned by mid-2015.

Key Contracts and Suppliers
Bara Consulting (updated financial model).

On Budget and on Time?
Not stated.

Contact Details for Project Information
Premier African Minerals, tel +27 100 201 281 or email info@premierafricanminerals.com.