Premier African Minerals has signed a new management agreement with Zimbabwe’s the National Indigenization and Economic Empowerment Fund (NIEEF) for the operationalization of the RHA Tungsten Mine.

RHA Tungsten Mine is located approximately 270km northwest of Bulawayo.

Premier holds a 49 percent interest in RHA and is the operator.

The new management arrangement replaces the old management agreement that had been entered into on the September 23, 2013.

In terms of the new management arrangement Premier’s wholly-owned subsidiary ZimDiv Holdings Limited has been appointed as the Manager for a period of five years.

Zimdiv Holdings will conduct the operations at RHA in accordance with the general terms and conditions of the management arrangement and the approved budget and shall report directly to the board of RHA.

The board of RHA will agree the Management Fee that will include a performance related adjustment, which requires first concentrate shipment within 100 days of receipt of the new investment.

“Whilst it has been a long haul, I am very pleased to be able to report that we have signed a new legally binding agreement with NIEEF that includes a funding undertaking of US$6 million for RHA.

“Use and application of these funds is expected to see RHA back in production later this year and allows for required upgrades that are expected to result in major operating cost reductions including electricity grid connection. Premier retains ownership of the plant and equipment and is reappointed as the manager for a further 5 years with renewal thereafter,” said CEO George Roach.

“The investment from NIEEF will be structured as share capital and Premier will simultaneously capitalise an equivalent amount from Premier’s existing loan account.

“In my opinion, this represents both an equitable solution and a good time for the Zimbabwean Government to invest directly in this project. RHA has been significantly de-risked over the past 4 years and is now an operation that is better understood.”

The RHA project comprises 50 Mineral Claim Blocks, covering 1,800 hectares, consisting of 10 owned by Premier and 40 which are under option.