The transaction sees Premier buy a 7% interest in MN Holdings Limited, the project’s owner, for US$700,000 paid in new shares. It will increase Premier African’s stake in MN to 19%.
“This further proposed increase in our holding in MNH is based on the same valuation formula applied to our initial acquisition,” George Roach, Premier African's chief executive said in a statement released after the market close on Wednesday.
“Nevertheless, this does represent a more significant stake in what we expect to be a cash generative asset supportive of group overheads in the near future and comes on the back of a sharp increase in the price for manganese," he added.
Otjozondu, located in a well-known and established manganese district, spans some 1,367 square kilometres and the project is presently known to have 114 kilometres of strike, of which only 14 kilometres has been explored to the extent that resources can be estimated.
Open-pit mining is ongoing and processing is done via a crush screen and jig plant. The operation is exporting some 10,000 tonnes of lump ore with 35% manganese per month.
It generated around US$1.42mln in the year ended June 30, 2019. A historic resource estimate, non-JORC (2012) compliant, sees some 3.378mln tonnes of manganese at the project.