Premier African Minerals announced a placing on Tuesday to raise £0.75m before expenses, at an issue price of 0.18p per new ordinary share.
The AIM-traded firm said it had been “clear for some time” that it would need to supplement working capital, in part to support costs associated with the restructuring and ongoing holding costs of the RHA Tungsten Mine, which remained “vital” to bringing RHA back into production expeditiously.
It said that, further to yesterday’s announcement which set out that Premier’s proposal had been “favourably received” by the relevant ministries, the company was looking to de-risk the development of RHA.
As such, Premier would begin mobilising the driller with the aim to commence a drilling programme of up to 2,750 meters as soon as possible, with the objective of expanding the resource base as well as increasing the confidence levels of both the open pit and underground resources.
The company said it would provide regular updates on that drilling programme.
In addition, the company and its technical consultants were said to be finalising an assessment of the wolframite resources contained in the tailings facility of RHA, with Premier expecting to publish an updated technical report shortly.
The placement would see Premier fully funded in regard to working capital until December, without any dependency on revenue generated from a possible early return to production, targeted at 6,000 tonne per month at RHA.
At the same time, Premier said it was actively seeking the appointment of a new full-time finance director, and was implementing a series of internal cost-cutting measures to reduce the overheads of the company.
“This placement gives Premier a head start at RHA and provides the working capital necessary for the group as a whole,” said chief executive officer George Roach.
“Being able to get the additional drilling started immediately at RHA is likely to add further value to the mine and will guide efficient and effective back-to-production strategies.”
Roach said that, with the Zulu Lithium and Tantalum Project nearing completion of its due diligence period, he was “looking forward” to updating the market on the proposed investment by Cadence.
“At the same time, we have re-examined our bulk test on historic tailings at RHA and are confident that with improved tungsten prices at present, we are able to expedite reopening of operations using tailings as a supplemental ore feed.”