Premier African Minerals Limited / Ticker: PREM / Index: AIM / Sector: Mining

29 September 2017

Premier African Minerals Limited

("Premier" or the "Company")

£3.5 Million Funding Update

Premier African Minerals Limited (AIM:PREM), the London-quoted mining and exploration company, is pleased to announce an underwritten offer for £3.5 million via the PrimaryBid.com platform. Further details of the PrimaryBid Ltd. ("PrimaryBid") offer will be set out separately in an announcement to follow shortly.

Highlights

The Company plans to use the proceeds of the Offer to:

·     Complete plant upgrades at RHA Tungsten Mine ("RHA");

·     Fully funded remaining underground development at the RHA mine to scale up production to the mine design rate;

·     Full repayment and cancellation of the Delta-Beta One EQ Ltd ("D-Beta") equity swap agreement;

·     Full repayment and cancellation of the YA II PN Limited ("YA II") loan agreement;

·     Completion of the PEA on the Zulu Lithium Project ("Zulu"); and

·     General working capital. 

George Roach, Chief Executive Officer of Premier, commented:

"This funding via PrimaryBid will allow the Company to fully repay and cancel the existing loan note and swap agreement. This funding will also provide the final budgeted additional capital for final plant upgrades at RHA and fully-fund the remaining underground mine development. The recent rise in the APT price has significantly lowered the break-even throughput rate of the plant to 4,500 tonnes per month which can be comfortably achieved during the latter part of Q4 2017. RHA's capital development budget is now fully funded. At the same time, we will complete the PEA on the Zulu Project which will allow us to re-engage in more meaningful joint venture discussions.

We do not expect to be raising any additional capital to fund RHA capital developments going forward.  Furthermore, the Company will have fully paid-off and unwound the YA II loan and D-Beta swap as announced on 31 July 2017 and as such will no longer be part of our balance sheet."  

Share issue

Pursuant to the PrimaryBid Offer the Company will cancel the swap agreement with D-Beta by the repurchase of the balance of subscription shares issued in July 2017, which will be issued to subscribers under the PrimaryBid Offer together with the further issuance of up to a further 538,095,239 new ordinary shares.

RHA Production Guidance

Premier is pleased to provide the following production guidance from the management team at RHA.   All the upgrades to the front-end of the plant should complete during Q4 2017. The plant has continued to undergo significant optimisation and shipments have been made. The Company has also increased and upgraded the resources in the underground mine as announced in 15 September.

Underground Mine

During the latter part Q4 2017, throughput from the underground mine is projected at not less than 6,000 tonnes per month and the plant is projected to be profitable at this rate without any additional ore from the open pit mine. Production from the underground mine will be scaled up incrementally to the targeted design rate, this is expected to be achieved during Q2 2018 which would generate a net positive cashflow of around US$547,000 per month on an EBITDA basis based on the anticipated ore grades, plant through-puts, recoveries as well as current APT price. The initial production target excludes any production from the open pit mine.

Open Pit

The Company has engaged Venmyn-Deloitte (Pty) Limited, an independent advisory company with extensive experience in preparing Mineral Resource and Reserve Statements to carry out a review of the open pit Mineral Resource Estimate (as announced on 30 September 2016), as well as advise on optimisation of the parameters used in the Mineral Resource Estimate. Given the recent increase in the APT price, the Company is expecting a significant increase in revenues from the open pit operation since the guidance note announced on 30 January 2017 and will provide further production guidance on the open pit on completion of this review during October.

Enquiries:

Beaumont Cornish Limited is acting solely as the Company's Nominated Adviser for the purposes of the AIM Rules and no one else and will not be responsible to anyone other than the Company for providing the protections afforded to its clients or for providing advice in relation to the matters referred to in this announcement and is not acting in respect of the PrimaryBid Offer nor providing any advice in relation thereto.

Forward Looking Statement

Certain statements in this announcement, are, or may be deemed to be, forward looking statements. Forward looking statements are identified by their use of terms and phrases such as ''believe'', ''could'', "should" ''envisage'', ''estimate'', ''intend'', ''may'', ''plan'', ''will'' or the negative of those, variations or comparable expressions, including references to assumptions. These forward-looking statements are not based on historical facts but rather on the Directors' current expectations and assumptions regarding the Company's future growth, results of operations, performance, future capital and other expenditures (including the amount, nature and sources of funding thereof), competitive advantages, business prospects and opportunities. Such forward looking statements reflect the Directors' current beliefs and assumptions and are based on information currently available to the Directors. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements including risks associated with vulnerability to general economic and business conditions, competition, environmental and other regulatory changes, actions by governmental authorities, the availability of capital markets, reliance on key personnel, uninsured and underinsured losses and other factors, many of which are beyond the control of the Company. Although any forward-looking statements contained in this announcement are based upon what the Directors believe to be reasonable assumptions, the Company cannot assure investors that actual results will be consistent with such forward looking statements.

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

Notes to Editors

Premier African Minerals Limited (AIM: PREM) is a multi-commodity mining and natural resource development company focused in Southern and Western Africa with production started at its flagship RHA project in Zimbabwe.

The Company has a diverse portfolio of projects, which include tungsten, rare earth elements, gold, lithium and tantalum in Zimbabwe and Benin, encompassing brownfield projects with near-term production potential to grass-roots exploration. In addition, the Company holds 5,010,333 million shares in Circum, the owner of the Danakil Potash Project in Ethiopia, which has the potential to be a world class asset. At present those shares are valued at US$10.2 million based on the latest price at which Circum has accepted subscriptions. Premier also has an interest in Casa Mining Limited, a privately-owned exploration company that has a 71.25 per cent interest in the 1.5 million ounce inferred resource Akyanga gold deposit in the DRC.

ENDS