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Premier African Minerals sees value in Circum

Published: 08:01 11 May 2015 BST

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Premier African Minerals’ (LON:PREM) expects there to be an increase in the value of potash group Circum when a new study is released later this year. 

The group sold its stake in the Danakil project in Ethiopia to Circum last year in return for around US$5mln in cash and two million shares, a 2.15% stake, to concentrate on its RHA tungsten mine in Zimbabwe.

In January, Premier said it was considering a sale of the rest of its Circum stake later this year.

Circum published the first results of an exploration programme at Danakil, however, and the company seems more optimistic on the project.

George Roach, CEO, commented: “Circum's announcement further supports the belief that the Danakil Potash Project has the potential to be a major world-class potash asset.”

He said he expects an increase in the value of Premier’s shares in Circum and implied he would wait until after the definitive feasibility study has been completed in the second half of the year before making a decision.

The report said the Mineral Resource Estimate, based on drilling 35% of the licence area to a depth of 400 metres, is 4.2bn tonnes of measured, indicated and inferred resources.

Geological estimates over the remainder of the licence, however, suggest there is an additional 7-9bn tonnes to a depth of approximately 800 metres, potentially totalling 13bn tonnes.

A definitive feasibility study will be published in July with Circum currently finishing a US$30mln private placing to help fund both that and the first phase of development.


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