🕐03.10.13 - 10:27 Uhr

PREMIER AFRICAN MINERALS: SHORE CAP INITIATION OF COVERAGE



Good morning, AIM listed Premier African Minerals house broker Shore Capital, has issued its Initiation of Coverage for Premier.

Shore Cap support PREMs belief that the Companys flagship RHA tungsten project in Zimbabwe, "could be rapidly brought into production as a low-capex and -opex mine." PREM hopes to be able to commence construction and production at RHA by the end of 2013 and 2014, respectively, subject to availability of funding.

To this end, PREM reiterated at the end of September 2013 that it is in "advanced negotiations" on offtake and project finance. I have include and attached the full note. Kind regards, Charlotte
Premier African Minerals A tasty little tungsten dish for starters Initiation of Coverage note attached ________________________________ Explorer-developer Premier African Minerals (PREM), led by highly experienced, proven management, has amassed a multi-commodity suite of assets in Africa.

In late August 2013, PREM released very positive results from a Preliminary Economic Assessment and concept mining study (hereafter collectively referred to as the PEA) on the flagship RHA tungsten (WO3) project in Zimbabwe.

The PEA envisaged a six-year operation producing 1.89ktpa of 65% WO3 concentrate from Lode 2A.

Assuming life-of-mine (LoM) average operating costs of US$59.3/t ROM (run-of-mine), upfront capex of US$13.5m and an ammonium paratungstate (APT) reference price of US$400/mtu, pre-tax NPV0% was calculated at US$117.7m and IRR at 316%.

Subsequent pit optimisation improved these figures to US$120m and 378%, respectively.

In our view, these results support PREMs belief that RHA could be rapidly brought into production as a low-capex and -opex mine.

PREM hopes to be able to commence construction and production by end 2013 and 2014, respectively, subject to availability of funding.

To this end, PREM reiterated at the end of September 2013 that it is in "advanced negotiations" on offtake and project finance. ________________________________
RHA resource is high-grade and has expansion potential: RHA boasts a SAMREC-compliant Indicated resource (100% basis) of 0.15Mt at a diluted grade of 0.47% WO3 and an Inferred resource of 1.09Mt @ 0.87%, for a total of 1.24Mt @ 0.82% WO3.

These grades compare very favourably with those of the 10 peer companies that we follow (median and average overall resource grades: 0.28% and 0.41%, respectively).

We believe there to be good potential to expand RHAs resources (and thereby volumes and/or mine life) further in the form of strike and depth extensions to Lode 2, the other known lodes and as yet undiscovered lodes (PREMs drilling has already identified several previously unknown veins). Very encouraging site tour: Shore Capital visited PREMs RHA and Katete projects in northwestern Zimbabwe in February 2013.

We were struck by the condition of infrastructure in the region, which was much better than we had expected - e.g.

most roads had few (if any) potholes.

Access to both projects was easy, electricity lines from the Hwange power station (Zimbabwes largest) passed nearby and, importantly, in a generally dry region, we noted possible sources of water in the vicinity. Many potential sources of significant upside: We derive a base-case 49%-attributable post-tax NPV10% valuation for RHA of 2.6p/share (fully diluted basis), with a conservative 4.8p/share upside case.

Including the market value of PREMs 42% interest in AgriMinco increases these figures to 2.9p/share and 5.1p/share, respectively - with as yet no value attributed to potential copper concentrates, Katete or PREMs various other assets.

There are thus many potential sources of significant upside even in our upside case, in our opinion. +Shore Capital acts as Broker to Premier African Minerals. [cid:image002.png@01CEC017.6F2157C0]







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