Name of the Project
RHA tungsten underground mine restart.

Location
Zimbabwe.

Project Owner/s
Premier African Minerals.

Project Description
The RHA tungsten mine has a significant underground operation, which is currently under care and maintenance.

Premier aims to re-establish production at RHA, with a technical and economic assess­ment proposing two production scenarios: underground production at a production rate of 6 000 t month to 7 000 t month or underground and openpit mining at a production rate of 6 000 t a month and 34 000 t a month respectively, with a plant processing rate of 40 000 t a month.

Premier is considering only the first option as a basis for restarting production at RHA. Existing resource estimates in the underground areas of RHA, excluding any openpit resources, indicate a mine life of more than ten years. In the underground production scenario, the mine life modelled has been limited to an initial 15 months of mining, including a month of rehabilitation for the underground mine and three months of development before the start of stoping. The reason for this limit at this time is that the results of drilling currently under way will guide the future underground development and mining rate.

The initial tungsten production is modelled to 2 700 t a month from underground mining, with the company incrementally increasing this to a steady-state production of 6 000 t in month 14. RHA also has sizable historical tailings deposits accumulated during historical production in the 1970s. The potential simultaneous processing of tailings and underground ore has also been examined in house by Premier and has not been independently reviewed.

The company undertook an assessment to determine the tungsten resources contained in the tailings, and conducted a comprehensive sampling programme to determine the size fraction, grade and potential in situ resource. The results of the programme concluded that 86.1% of the material was above 45 µm, which is a suitable size for gravity concentration. The company has estimated that it can produce a tonne of concentrate from the tailings for 59% tungsten. These results have not yet been independently reviewed. Considering these favourable economics, the company has concluded that it should combine the reprocessing of these tailings with underground mining operations as and when they restart.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
Not stated.

Capital Expenditure
The total underground mining costs, according to the economic and technical assessment, is estimated at $1.06-million.

Planned Start /End Date
Not stated.

Latest Developments
Premier African Minerals has signed a new management agreement with the National Indigenisation and Economic Empowerment Fund of Zimbabwe (NIEEF), which is expected to result in the RHA tungsten project being brought back into production without any further financing from Premier. This funding will allow for required upgrades, including to the project’s connection to the electricity grid. These are expected to result in significant operating cost reductions.

The legally binding agreement with the NIEEF includes funding of $6-million for RHA.

The use and application of these funds is expected to result in RHA being brought back into production later this year and
Premier has retained ownership of the plant and equipment.

Premier’s 100%-owned subsidiary, ZimDiv Holdings, has been appointed as the manager for five years. In particular, the manager has full authority and responsibility for the day-to-day operations of RHA. The new management agreement replaces the old agreement that had been entered into in September 2013. The manager will conduct the operations at RHA in accordance with the general terms and conditions of the agreement and the approved budget and will report directly to the RHA board.

The RHA board will agree the management fee that will include a performance-related adjustment, which requires first concentrate shipment within 100 days of receipt of the new investment.

The investment from the NIEEF will be structured as share capital and Premier will simultaneously capitalise an equivalent amount from Premier’s existing loan account.

The company has agreed a provisional implementation process with the NIEEF.

Key Contracts and Suppliers
Bara Consulting (technical and economic assessment).

On Budget and on Time?
Not stated.

Contact Details for Project Information
Premier African Minerals, email info@premierafricanminerals.com.