Premier African Minerals (LON:PREM) expects to see a move to profit at its RHA tungsten mine in the first quarter of 2016 having opened the mine in "trying times".
In a corporate update, the miner outlined some of the difficulties at the Zimbabwean project, where open pit operations have been temporarily suspended to reduce cash outflow.
First ore from underground was generated on October 27 and is on track to meet full plant capacity in the first quarter of 2016.
Chief executive George Roach explained: "The combination of a falling APT price, difficulties in achieving the planned Run of Mine feed grade from the open pit and some residual issues in attaining steady state in plant operations, have not made for the start to production Premier had anticipated.
"Despite this we have opened a new mine in very trying times.
"Our experience to date has provided a solid platform from which we expect to see a move to profit during Q1 2016.
"Acceleration of the underground mining and the potential to upgrade through XRT sorting of the open pit material has real promise for the future of RHA."
Significantly, Roach added that the group's exploration in Benin and at Zulu in Zimbabwe continued to show promise for early production at low capital cost and will be pursued provided that the objective remains realistic.
"At the same time, Premier is viewing other opportunities in niche minerals that offer the same opportunity and it is hopeful that transactions can be concluded in the near future."
Its investment in Circum Minerals has the potential to be realised during 2016, the firm noted.
"The apparent value in this investment provides comfort to the necessary debt and equity-based funding that Premier may need as we develop our company," said Roach.
Premier African has a 2% stake in Circum after it sold the Danakil potash project to it (Circum) in 2013 for US$5mln cash and a further 2mln shares.
In August this year, a US$2.1bn value was attributed to the project in the definitive feasibility study published by Circum.
Following the statement, broker SP Angel said: "The life of the open pit was always limited so accelerated underground development makes sense.
"We look forward to further news flow as the company delivers further ore from underground to start processing."
Shares eased 12% to 0.55p.