Premier African Minerals (LON:PREM) – CORP: Interim results
Market Cap: £8m; Current Price: 0.4p
From yesterday: LBT widens due to operational issues at the RHA Tungsten Mine
LBT increased to US$2.8m in H116 from US$1.5m in H115, as a result of increased depreciation and amortisation expense and gross costs caused by the operational issues at the RHA Tungsten Mine.
Net debt decreased to US$3.8m in H116 compared to US$4m in H115.
NORTHLAND CAPITAL PARTNERS VIEW: Operational issues at the RHA Tungsten Mine made the start of 2016 a difficult period for Premier African Minerals. The recently completed upgrades to the plant will allow Prem to increase processing rates to planned levels going forward. An expansion to 16,000t per month is scheduled for H117, once an upgrade to the shaft is completed in November 2016. This upgrade is likely to impact near-term production levels but negative effects will be outweighed by the longer term benefits. Prem is also in discussions to use an XRT sorting machine on a toll treatment basis that will allow both open pit and underground mining to be upgraded, increasing production to 39,000t per month from February 2017. At this level of production and based on anticipated grades, around 10,000mtu of WO3 per month is expected to be produced generating gross revenue of US$300,000 per month. Other positive news is that the Company can operate on the accessible underground ore for the next twelve months without incurring any major underground development costs.