14th Feb 2019 12:58
LONDON (Alliance News) - Premier African Minerals Ltd on Thursday amended the terms of its KME Holdings Ltd deal, including no longer spinning-out some of its own assets alongside KME's.
Shares were down 10% on Thursday at 0.099 pence each.
Premier African in November agreed a deal to buy assets from KME for USD4 million, then combine them with its own Zimbabwean assets and seek a listing for them on an unspecified London market.
However, it will now pay USD1.4 million for half of KME Plant Pty Ltd, which includes six exploration rigs, and various vehicles and equipment at a value of USD4 million. These are the same assets agreed in November.
Premier African now will also buy 50% of Zimbabwe-focused near-term gold producer Honey Badger Resources Ltd for USD3.7 million in stock.
Honey Badger has two development projects, with one having a resource of 535,000 ounces and the second a historic resource of 500,000 ounces.
"The board believes there is the potential to target a total resource covering these two projects in excess of two million ounces of gold through additional exploration work and drilling utilising the KME Plant Hire asset base," said Premier African.
It hopes to have gold production going at the two assets within nine months.
Premier African also plans to get drilling going again at its Zulu lithium project in Zimbabwe.
Chief Executive George Roach said: "Premier must protect against the possibility of a future adverse event disabling our company as has been the case with RHA Tungsten, and in fact against any further delays, for whatever reason.
"At the same time, management has decided to expand operations by taking advantage of some significant opportunities in Zimbabwe, bring Zulu back to development and generally reduce the impact and dependence on RHA Tungsten," he continued.
At RHA Tungsten, the Zimbabwean government in December said the mining contract would need to be renegotiated were the subsidiary to be included in the spun-off company.
"Whilst the issue of the shares to acquire 50% of each of KME Plant Hire and Honey Badger will require Premier shareholder approval and will add significantly to total shares in issue, the overall value created is expected to outweigh the dilutive effect."
Related Shares:
Premier African Minerals