Premier African Minerals Ltd (LON:PREM) is raising just over £1mln which will fund the completion of work on the RHA tungsten mine, in Zimbabwe.
The mine is undergoing a phase of construction and optimisation through the first quarter of 2017.
In a statement the company told investors that the implementation and commissioning of the redesigned crushing, screening and ore upgrade circuits is scheduled for completion in February.
As such the company expects to restart processing at RHA in March, and over the course of the month it anticipates that optimisation work on the XRT sorter and ore sizing screens will take place.
During that time RHA will start producing wolframite and will generate revenue, the company said.
It expects the mine’s throughput will increase steadily to a target of 7,500 tonnes, at which point it is expected generate positive cash flow on an earnings basis of US$200,000 per month.
Further optimisation works are planned for the plant and sorter which - alongside an anticipated start-up of open pit operations - will deliver further improve in net revenue and earnings.
Premier African Minerals says it will give further market guidance for its production and operations on a monthly basis until a steady-state is achieved.
"Bringing RHA into production has been a challenge but our team is confident that this project time line is achievable and the market guidance provided is realistic,” said chief executive George Roach.
“At the same time, this placing will mean that RHA is fully funded through to production.
“RHA's indebtedness to Premier (approximately US$20m) becomes repayable as and when RHA commences commercial production.”
Roach highlighted that with production coming and assays due from the Zulu project shortly, and believes it will be a transformational period for the company.
The company is issuing 536.8mln new shares in the placing, with each share priced at 0.19p.