9th Oct 2015 11:26
LONDON (Alliance News) - Premier African Minerals Ltd on Friday said it has raised money to provide working capital during the re-opening of underground operations at the RHA tungsten project in Zimbabwe and final stages of the ramp up to the first quarter of 2016.
At that point, RHA Tungsten (Private) Ltd is expected to begin repaying debt to the company. Premier African Minerals operates RHA Tungsten and holds a 49% interest.
Darwin Strategic Ltd arranged the subscription for the loan notes.
The subscription deal for 36 loan notes saw an issue price of GBP22,500 per loan note.
"Effectively, RHA Tungsten should have been contributing to loan repayments from July 2015. Whilst the delay in attaining profitability is disappointing, we have confidence in the future of this project as a significant contributor in the medium term," Premier African Minerals Chief Executive George Roach said in a statement.
"RHA remains responsible for the repayment of the full, true cost of debt and that includes the effective cost of any equity placed pursuant to a conversion of loan notes. Confidence in the ability of RHA to repay Premier in full, is my single most important concern as this assures a strong future for Premier. In effect, the more dilutive repayment of debt becomes, the greater the indebtedness of RHA to Premier," Roach said.
Shares in the commodity resource and development company were down 12% 0.902 pence on Friday shortly after the announcement.
By Samuel Agini; [email protected]; @samuelagini
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