Premier African Minerals Ltd (LON:PREM) shares shot up some 40% on Monday’s news that the proposed restructuring of the RHA Tungsten vehicle won’t be impeded by Zimbabwe’s indigenisation policies.
The AIM-quoted company currently owns 49% of RHA. It has provided loans to the connected company and it is proposed that the debt will be capitalised, resulting in Premier increasing its stake to 90%.
WATCH: Premier African Minerals 'encouraged' by support for RHA restructuring
In a stock exchange statement, Premier said it has received written confirmation from the Ministry of Mines and Mining Development that under the amended Indigenisation and Economic Empowerment Act, RHA is no longer required to comply with indigenisation policies and that the proposed restructuring of RHA can proceed without approval from the Ministry of Mines.
George Roach, Premier chief executive, highlighted that the RHA mine is a near-fully developed mine and, amid the ‘firming’ tungsten prices, it has the potential to be brought back into production.
“Based on the reassurances by the Ministries, Premier will report on the finding of the independent review to bring RHA back into production in the coming weeks and look to conclude one of the various funding options as previously announced on 20 July 2018,” Roach said.
“Simultaneous with this, Premier is also reviewing bulk tests concluded on historic tailings in 2016 based on the much-improved tungsten prices, with a view to possible mitigation of peak funding requirements to get RHA operational."
Premier shares rose 0.06p or 42% to trade at 0.24p.