Premier African reviewing options at RHA and planning to spin-off its Zulu lithium project
Premier African Minerals Ltd (LON:PREM) plans to float off its Zulu lithium project in Zimbabwe.
The company has made significant progress on the project over the past year, and the current drilling programme continues to intersect wide and high-grade spodumene pegmatite mineralisation.
Valuations for comparable hard-rock lithium projects exceed Premier's current market capitalisation and the board believes significant value will be unlocked by having a separate listing for Zulu.
Premier is in discussions with various drilling contractors to fund future drilling programmes at Zulu on an earn-in basis and accordingly, is not dependent on any substantial placement into this proposed new company.READ Premier African issues more assays from 'best hole' yet at Zimbabwe lithium deposit
The news was less upbeat at the company’s flagship RHA tungsten project, where the company had hoped to achieve profitable production levels in the fourth quarter of 2017 after doing some underground development and plant modifications.
Mining and plant operations at RHA currently continue and following an in-depth assessment of the operations at RHA, Premier will provide a further update and revised guidance.
"Even though we made significant progress at RHA during the last quarter of 2017, the mine did not meet the guidance of profitable production during Q4, 2017. Premier has previously stated that unless RHA traded profitably during December 2017, Premier would not provide further financial support to RHA. Accordingly, Premier is immediately approaching our 51% partner in RHA to assist in facilitating a long-term solution for RHA,” said George Roach, the chief executive officer of Premier.
"Whilst Premier continues with discussions with several parties in regard to development of our Zulu asset, it is clear that we need to separate Zulu from Premier to see the real value in this asset unlocked and a proposed separate listing will be the first step in this process," he added.
Shares in Premier lost a third of their value on the news about RHA.