Premier discovers new tungsten reserves

HARARE - London-listed resources group Premier African Minerals (Premier) has extended its Zimbabwean tungsten mine’s lifespan by nine years after a study indicated more reserves.

A recent survey of Premier’s tungsten project by Bara Consulting highlighted increased resources, almost doubling the estimated value of the mine in Kamativi, north-west Zimbabwe.

The mine is now projected to produce almost 24 000 tonnes up from 8 900 tonnes previously of concentrate over its mine life with 15 000 tonnes of wolframite (tungsten) contained within that.

Revenues of $435 million — up from $185 million — would be generated at an assumed sale price for tungsten of $288 per metric tonne unit, with free cash flow of $271 million.

“The net present value is put at $183 million compared to $99 million, while the life of the operation has been extended to 15 years from six,” read part of the report.

Tungsten and its alloys are used extensively for filaments for electric lamps, electron tubes and television tubes.

The RHA tungsten deposit is approximately 800 metres strike length and 300 metres width.

It comprises 50 mineral claim blocks covering an area of 1 800 hectares.

George Roach, Premier’s chief executive, said although the revised study was still at preliminary economic assessment status, “it had given a substantial boost to confidence in the project”.

The new figures reflect revised metallurgical and test work results and new optimisation studies.

One of the advantages enjoyed by RHA is its low start-up costs and these were only slightly affected by the additional production at $12,8 million against $11,2 million.

“We expect to provide more details of the low capital, near term production options we plan to implement in the near term,” said Roach

The London-listed resources firm’s net present value of $183 million assumed a five percent discount rate, while the internal rate of return rose to 455 percent from 378 percent.

This comes as the group recorded a profit of $1,058 million in the six months to June 2014.

“It is encouraging in these interims to note the significant realignment of our expenditure into project development from corporate costs, and the major developments at our RHA Tungsten Project in Zimbabwe during the period,” said Roach.

He noted that the results reflected the changing dynamic of Premier from a brownfield exploration company into a near term tungsten production company with positive cash flows from operations expected in 2015.

“We continue to find Zimbabwe a country where mining projects can be executed in a timely and constructive manner,” he added.

Premier is a multi-commodity exploration and development company focused in Southern and West Africa.

The company has a diverse portfolio of multi-commodity projects which includes tungsten, rare earth elements, gold, lithium and tantalum in Zimbabwe and Togo, which span from brownfield projects with near-term production potential to grassroots exploration.

Comments (1)

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