Tawanda Musarurwa Senior Business Reporter
Regional mining group, Premier African Minerals says it has signed a new management agreement with the National Indigenisation and Economic Empowerment Fund (NIEEF) for the operationalisation of the RHA Tungsten Mine.
This follows a US$6 million capital injection from the Government.
RHA Tungsten Mine is located approximately 270km north-west of Bulawayo.
Premier has advanced the RHA project from an exploration project through to a producing tungsten mining operation.
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.
“In particular, the manager has full authority and responsibility for the day to day operations of RHA,” said Premier.
The manager 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 with the management fee that will include a performance related adjustment, which requires first concentrate shipment within 100 days of receipt of the new investment.
Commenting on the development Premier CEO George Roach said; “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. 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 four 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.
Small-scale surface and underground mining was conducted at the site between 1931 and 1979, with total production from the RHA mine standing at 1 247,65 tonnes of wolframite concentrate, containing 65 percent WO3.
Premier has so far invested around US$18 million in the acquisition and development of the mine as well as the plant and necessary infrastructure.