15th May 2014 10:36
LONDON (Alliance News) - Premier African Minerals Ltd Thursday said that Circum Minerals Ltd has bought its stake in the Danakil potash project in Ethiopia for cash and shares.
The AIM-traded, multi-commodity natural resource company with mineral projects located in western and southern Africa, said Circum exercised its exclusive option to acquire the entire issued share capital of Mandalore Development Ltd, a company which holds a 30% interest in the Danakil project and which Premier African bought recently.
Circum already owns 70% of the site and will now own the entire property.
Premier African Minerals said that it will now no longer have to repay a USD2.5 million net bridging loan from Circum and will be issued two million new shares in Circum with a present estimated value of USD1.4 million.
The company also said that it will receive a further USD1 million payment in July, September, November And January 2014.
"Through this transaction, Premier has effectively realised substantial early value from an exploration project in a capital market environment that is simply not supportive of mineral exploration," Chief Executive George Roach said in a statement.
"With USD5 million effectively 'in the bank', a retained value in Circum, several advanced exploration projects and our outstanding RHA Tungsten project at a virtual ready to build stage, I feel justified in approaching the future with confidence," he added.
Premier African Minerals shares were up 8.3% to 0.975 pence, putting it among the top AIM ALL-Share risers Thursday.
By Tom McIvor; [email protected]; @TomMcIvor1
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