Aim-listed Premier African Minerals has entered into a secured $200 000 loan agreement and related subscription agreement with a company owned by a trust of which CEO George Roach is a beneficiary.
The proceeds of the new loan will be used to support ongoing development and provide additional general working capital for the company, which owns the RHA Tungsten and Zulu lithium and tantalum projects, in Zimbabwe.
The lender may convert any percentage of the principal amount into new ordinary shares of the company, which, if the full amount is converted, can amount to 4.4% of issued share capital.
Meanwhile, Premier is waiting for a decision by Industry and Commerce Minister DR Sekai Nzenza on behalf of the National Indigenisation and Economic Empowerment Fund (NIEEF) on how best to move forward with the RHA project.
The company has sent NIEEF a notice of demand to either remedy an ongoing breach under a revised management agreement, by providing outstanding funding of $5-million, or vary the terms of the RHA shareholder agreement to allow Premier to increase its shareholding in RHA.
Premier is also waiting for confirmation from the Zimbabwean Mining Affairs Board around the exclusive prospecting order (EPO) application made by the company.
"Premier starts each month with fixed overheads for the daily operations of the business and these must be funded to ensure Premier continues to operate as a going concern.
“We have not yet acquired a sufficiently meaningful stake in Otjozondu Mine in Namibia to address overheads and at the same time continue to ensure that we are able to meet immediate payment requirements when Zulu EPO is awarded,” Roach states.
He adds that the situation at RHA is deeply frustrating. Premier has a plant standing, a number of staff members who have been retrenched and "all because NIEEF perpetuates a state of noncompliance with the revised management agreement and will not agree any of the alternatives the company has proposed", Roach explains.
“It gives me no pleasure whatsoever that we have now had to serve a demand, but the delays are not in Premier's interests and cannot conceivably be in the interests of Zimbabwe either.”