Premier African Minerals Ltd (LON:PREM) has completed the acquisition of a majority stake in TCT IF, a limestone and logging operation in Mozambique.
The limestone deposit is next to a railway linking Tete to Beira, with the forestry business already having infrastructure in place and generating revenue.
Premier will acquire a 52% stake in TCT IF for US$2.1mln (£1.74mln), comprising two 26% stakes from local firms TCTM and GAPI payable in cash or shares.
According to Premier, TCT IF is self-sustaining and will contribute positively to group cash flows in 2017.
Local demand for lime for cement production, agricultural and other uses underpins the case for a low capital cost industrial scale production development, while the forestry operations will significantly reduce exploration and development costs of the deposit.
George Roach, Premier African Minerals’ chief executive, said: "This is a unique opportunity to acquire a deposit that has very good prospects for development into a major low cost industrial scale mining operation.”