2nd May 2014 10:32
LONDON (Alliance News) - Premier African Minerals Ltd (PREM) Friday said it has negotiated an interest-free USD2.5 million bridge loan from Circum Minerals Ltd, which will allow PREM to exercise its option to acquire AgriMinco Corp's interest in the Danakil Potash project.
PREM holds a 42% interest in AgriMinco, which has a 30% stake in the Danakil project. Circum Minerals holds the other 70% stake.
On March 20, PREM said it entered into an option agreement with AgriMinco Corp, whereby AgriMinco granted PREM the exclusive option to purchase 100% of the shares of Mandalore Developments Ltd, AgriMinco's wholly-owned subsidiary that holds its stake in the Danakil Potash project.
PREM on Friday said the option strike price is CAD4.9 million and would comprise the settlement of up to CAD1.5 million of AgriMinco?s debts, the issue of CAD1.0 million of PREM shares to AgriMinco, and the cancellation of PREM?s interest in AgriMinco.
PREM has granted Circum an option, valid until June 5, to acquire the 30% interest in the project from PREM for the USD2.5 million that it lent to PREM, plus new Circum shares and further deferred consideration payable in either cash or Circum shares, "that is anticipated, in aggregate, to be no less than the consideration paid by PREM to AgriMinco," PREM said.
Chairman and Chief Executive Officer George Roach said: "The transaction will significantly assist Premier in advancing its Zimbabwe projects, in particular bringing RHA Tungsten closer to production, and this together with the retained interest in Circum."
The deal comes as PREM saw its share jump Thursday after it reported a significant increase in tungsten metal at the RHA Tungsten Project in Zimbabwe.
PREM reported a substantial increase in both the size and the confidence of the resource at RHA, with resource tonnage up 152% to 2.73 million tonnes at a composite grade of 8.7 kilograms per tonne of tungsten trioxide. PREM is the operator and holds a 49% interest in the project.
The stock was trading at 1.06 pence Friday morning, up 12%, making it one of the biggest gainers on AIM.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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