Premier African Minerals shares rally after RHA update

Shares in Premier African Minerals (LON:PREM) rallied on Monday after the company issued an update on the status on restructuring efforts of RHA.

The restructuring concerns RHA Tungsten Private Limited, the company that own RHA Tungsten Mine in Zimbabwe, which Premier currently hold a 49 percent interest in.

Premier said it had obtained confirmation from the Ministry of Mines and Mining Development that in accordance with the Indigenisation and Economic Empowerment Act, which means RHA is no longer required to comply with indigenisation policies.

This means that the proposed restructuring of RHA can continue without approval.

George Roach, CEO of Premier, stated: “I would like to express my appreciation to the Ministries for their assurances and positive responses, which show their clear commitment to dealing with this process. RHA is a near fully developed mine and with a resolution to the equity situation in sight, and the recent firming of tungsten prices, has the potential to be back in production.

Last month, the company announced it was in the process of reviewing four alternatives to re-start its RHA mine.

Suspension at the mine cost the company $9.8 million, according to the company’s latest accounts, as uncertainty over ownership continued to impact profits.

Re-opening the mine requires a settlement with the Zimbabwe government, which part owns shares in RHA.

Premier proposed shareholder loans be capitalised upon, which bring it’s stake up to 90 percent.

According to the update, the proposal was well received by the Ministry and stakeholders, providing a boos to plans to re-vive production.

Premier African Minerals Limited is a multi-commodity mining and natural resource development company.

It is primarily focused Southern Africa, with both its RHA and Zulu projects located in Zimbabwe.

Shares in the company are currently trading +42.35 percent as of 12.35PM (GMT), as investors react to the update.