TIDMPREM
RNS Number : 8062N
Premier African Minerals Limited
31 October 2016
Premier African Minerals Limited / Ticker: PREM / Index: AIM /
Sector: Mining
For immediate release
31 October 2016
Premier African Minerals Limited
("Premier" or the "Company")
Completion of the acquisition of controlling interest in TCT
IF
Summary
Further to the announcement on 27 April 2016, Premier African
Minerals Limited, the AIM-traded, multi-commodity mining and
natural resource development company focused on Southern and
Western Africa, is pleased to announce that it has completed the
acquisition of a 52% interest in Mozambique-based TCT Industrias
Florestais Limitada ("TCT IF"), which owns a substantial limestone
deposit located on rail in the Sofala Province of Mozambique. TCT
IF is the holder of the exploration licence together with
significant forestry operations.
Highlights
-- TCT IF is self-sustaining and will contribute positively to group cash flows in 2017
-- Early test-work and import replacement opportunities
supported by local demand for lime for cement production,
agricultural and many other important applications including
aggregates, assures the market for low capital cost industrial
scale production
-- Revenue and infrastructure from existing forestry operations
expected to significantly reduce exploration and development costs
of the deposit
-- TCT IF's limestone deposit covers 27 km(2)
-- The Tete/Beira rail link, complete with 3-line siding, runs
adjacent to the northern boundary of the property
George Roach, CEO of Premier African Minerals, commented: "This
is a unique opportunity to acquire a deposit that has very good
prospects for development into a major low cost industrial scale
mining operation with essential infrastructure already in place and
a cash generative business to help finance the development. The
forestry operations of TCT IF will benefit immediately from limited
support that Premier has already provided in the form of essential
consumables as much as expansion of export opportunities in
addition to existing markets in the UK and SADC region."
Background to the acquisition
The conditional acquisition of a controlling interest in TCT IF
was announced by the Company on 27 April 2016. The conditions
precedent have been satisfied and the acquisition is now complete.
As previously announced, Premier's development strategy is to find
low capex projects with potential near-term production. The Board
of Premier believes that the TCT IF limestone project provides this
opportunity in a region that the Company currently operates in, and
that TCT IF's limestone and timber interests complement the
Company's current portfolio of minerals and natural resource
interests.
TCT IF
TCT Industrias Florestais Limitada ("TCT IF") is a private
Mozambique based natural resources company, which has an early
stage 27 km(2) limestone exploration license in Mozambique. In
addition, TCT IF has a 24,821 hectare hardwood forestry concession
located in central Mozambique, with allied milling and furniture
manufacture and semi-finished goods export.
The limestone deposit is located 20 km southwest of Caia within
the forestry concession area and the exploration licence is
coincident, in part to the forestry concession. The Tete / Beira
rail link, complete with a 3-line siding, runs on the northern
boundary of the concession. Early test-work on surface material of
the limestone indicates that there are potentially acceptable
grades of calcium carbonate (CaCO3) for limestone for use in cement
production. In addition, initial work suggests that solubility
should be suitable for Agrilime and the material is also expected
to be suitable for aggregate production. The Board believes that
there is local demand for lime for cement production, agricultural
applications, aggregates and other industrial uses.
The Forestry concession is valid for another 10 years subject to
renewal for another 50 year term and is permitted to cut up to
3,000 m(3) per annum, over and above historically cut and dead
timber. TCT IF is the operator of the limestone exploration license
and this is valid for two years from the date of formal grant in
January 2016, and is renewable for another two year period. The
work commitments under the exploration license are set out in an
approved exploration programme that is budgeted at US$200,000.
There has been limited exploration work to date on the limestone
deposit and there is no current resource, although there is
evidence of historic small scale mining activity. The Company plans
to commence an initial exploration and assessment work programme on
the limestone deposit that is expected to provide a maiden resource
and preliminary scoping study over the course of 2017.
In addition to its limestone project, TCT IF also has an
existing forestry operation that is expected to contribute
significantly to cash flows from an early stage. Limited
rehabilitation in the milling operations of the forestry division
will see volumes increase to achieve this. At present TCT IF
produces a range of Mozambique hardwoods and either exports top
grade kiln dried timber in unfinished or semi-finished form.
Bespoke furniture and a number of allied timber items are
produced from timbers that are highly rated in both Germany and the
UK. Located within the forest area, TCT IF operates a 28 bed lodge
and a 9,963-hectare game farm and hunting concession. This
concession is valid until 2065. TCT IF is expected to be fully
self-sustaining and will contribute positively to cash flow for
Premier as a whole.
The forest concession includes rights to harvest up to 3,000
m(3) of logs annually. This represents potential gross revenue of
up to US$1.5m against projected concession operating costs of less
than $750k. Optimisation of the timber operations to achieve this
return is a short term priority.
Further details on TCT IF's activities are available from its
website, www.dalmann.com.
Acquisition agreements and terms
The Company has concluded the public deeds for the assignment of
quotas to acquire a 26% interest in TCT IF from Transport Commodity
Trading Mozambique Limitada ("TCTM") and a further 26% interest
from GAPI Sociedade de Investimentos S.A. ("GAPI"), in aggregate
amounting to 52% for a total consideration of US$2.1 million.
Pursuant to the completed agreement with TCTM as announced on 27
April 2016, the Company has acquired TCTM's 26% interest in TCT IF
(the "TCT Agreement") for a consideration of US$1.1 million,
payable in four tranches in either new Premier Ordinary Shares or
cash at the election of TCTM. The amended payment tranches are as
follows: the first tranche now amounts to US$220,000 and is payable
within five working days to TCTM following pending approval by the
Mozambican authorities. The second tranche amounts to US$440,000
and is payable within 60 days following the first tranche. The
third tranche amounts to US$220,000 and is payable within 90 days
following the first tranche and the final tranche amounts to
US$220,000 and is payable within 120 days following the first
tranche.
Pursuant to the agreement with GAPI, the Company has acquired
GAPI's 26% interest (the "GAPI Agreement") for a consideration of
US$1 million, payable in five tranches in either new Premier
Ordinary Shares or cash at the election of GAPI. The first tranche
amounts to US$220,000 and is payable within five working days to
GAPI following pending approval by the Mozambican authorities. The
second tranche amounts to US$195,000 and is payable within 13
months following the first tranche. The third tranche amounts to
US$195,000 and is payable within 21 months following the first
tranche and the fourth tranche amounting to US$195,000 is payable
within 29 months following the first tranche. And, the final
tranche amounting to US$195,000 is payable within 36 months
following the first tranche.
The Original Public Deed Certificates ("Certificates") for both
the TCTM Agreement and the GAPI Agreement shall remain in the care
of the full-service law firm of SAL & Caldeira Advogados,
Limitada who are Premier's elected solicitors, until written
confirmation is received from either GAPI or TCTM confirming that
the final instalment of the purchase price has been received
("Period"), thereafter, the Certificates will be released to
Premier whereby final procedural registration of the assignment of
quotas as well as the publication of the amendment of the articles
of association of the TCT IF shall be enacted. Furthermore, the
Parties have acknowledged and agreed that during the period,
Premier shall have an irrevocable power of attorney to permit
Premier to participate and vote in all General Assembly meetings on
behalf of both parties. Premier shall also be allowed to appoint a
representative to the TCT IF's Board of Directors. And in this
regard, Premier has elected George Roach to TCT IF's Board of
Directors. Premier has further been appointed as the manager of TCT
IF.
The total consideration payable under the TCTM Agreement and the
GAPI Agreement amounts in aggregate to US$2.1 million (equivalent
to approximately GBP1,735,000).
Forward Looking Statements
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 Regulation 596/2014.
Enquiries
Premier African Minerals Tel: +44 (0)7734
Fuad Sillem Limited 922074
------------------------ --------------------------- -----------------
Michael Cornish Beaumont Cornish Tel: +44 (0) 207
/ Roland Cornish Limited 628 3396
(Nominated Adviser)
------------------------ --------------------------- -----------------
Jerry Keen/Edward Shore Capital Stockbrokers Tel: +44 (0) 207
Mansfield Limited 408 4090
------------------------ --------------------------- -----------------
Charles Goodwin/Harriet
Jackson/Dominic Yellow Jersey PR Tel: +44 (0) 754
Barretto Limited 427 5882
------------------------ --------------------------- -----------------
About Premier African Minerals Limited:
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 includes
tungsten, rare earth elements, gold, lithium and tantalum in
Zimbabwe and Benin, encompassing brownfield projects with near-term
production potential to grass-roots exploration. The Company holds
2 million shares in Circum Minerals Limited ("Circum"), the owners
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$4 million based on the latest price at which Circum has accepted
subscriptions. Premier also has a 4.5% interest in Casa Mining
Limited, a privately owned exploration company that has a 71.25%
interest in the 1.2 million ounce Akyanga gold deposit in the
DRC.
ENDS
This information is provided by RNS
The company news service from the London Stock Exchange
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