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Northland Capital Partners View on the City Premier African Minerals

Published: 08:11 10 Dec 2015 GMT

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Premier African Minerals (LON:PREM) – SPECULATIVE BUY*: Issue of Equity and Circum Minerals update
Market Cap: £3.8m; Current Price: 0.475p
Subscription for £112,500 and strategic advisor appointed to Circum Minerals

  • Premier African Minerals has received a direct subscription for £112,500 from a single subscriber. Prem will issue 30,000,000 shares at a price of 0.375p per share. Following the issue of shares, the Company will have 1,026,574,863 shares in issue.
  • Second, Circum Minerals has engaged a strategic advisor to provide advice with respect to it Tier One World Class Danakil Potash Deposit located in Ethiopia – Prem has a 2% holding in Circum. The advisor will provide access to development partners and financial institutions that could allow the advancement the project. These discussions are expected to commence on the receipt of the mining licence.
  • Production expected to be scaleable from an initial estimate of 2.75mt per annum of which 2mt would be muriate of potash and 0.75mt would be sulfate of potash.

Northland Capital partners view: Premier African Minerals will use these funds to assist in the ongoing underground mine development and working capital requirements at the RHA Tungsten Project, located in Zimbabwe. Circum Minerals, a private company where Premier African Minerals owns 2%, believes it has one of the largest and lowest cost potash deposits in the world. As an example of the potential value that could be realised by Circum Minerals, a 25% interest in the Yara Dallol deposit located to the south of Danakil, was sold for US$51.25m to a subsidiary of Liberty Mutual Insurance. Based on this the valuation of the Yara Dallol deposit is worth US$200m in total, the production forecast from Yara Dallol is 21.8% of the initial production estimate from Danakil.

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