Shares in Premier African Minerals Ltd (LON:PREM) zipped higher this morning after the junior miner upped its stake in potash producer Circum Minerals, which owns the potentially huge Danakil project in Ethiopia.
Premier has agreed to snap up another 416,700 shares – around 0.5% of Circum’s issued share capital – from GMP Securities for just shy of US$521,000. It will make the payment to GMP through the issue of 87.5mln new PREM shares.
WATCH: Zulu looking set to be 'bigger than the others' in Zimbabwe
That takes the AIM-quoted firm’s total interest in Circum to 4.1mln shares, or 4.2%.
Danakil has the potential to be massive
Back in 2015, a definitive feasibility study suggested the total value of Danakil was in the region of US$2.1bn – after tax.
If true that means Premier’s stake is worth around US$80mln; a sizeable amount given the explorer’s current market value of £18mln.
Circum is targeting annual production at Danakil of 2 million tonnes (Mt) of potassium chloride and 0.75Mt of potassium sulphate for phase I, with the possibility of two or three further expansions.
Seismic data has also suggested the potential total resource of the project is in the region of 12 to 14bn tonnes.
Shares in Premier added 5.4% to 0.61p.