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George Roach, chairman, chief executive officer and major shareholder of Premier African Minerals (PREM), sounds upbeat as he pauses from crucial last-minute offtake and financing negotiations for the company’s RHA tungsten project in north-west Zimbabwe, which he says should start production in June. He says talks have reached a ‘very detailed’ stage about a single debt package worth $2 million (£1.3 million) to cover the final shortfall and plant is being assembled in Johannesburg to re-launch the mine, which was developed up to the 1970s by Canadian miner Falconbridge, a company later bought by the Xstrata combine.
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Comments
Marc johnson
You have failed to mention the $2.5 million shares we have in Circum Minerals which has the potential to become one of the best potash resources in the world. Also ZULU Lithuim which will be started very near production of RHA and the IRR of over 450% for the underground Mine.
Davidé
Hi Robert,
It’s not clear what you are referring to when you state that the selling price is $200 per tonne. It’s likely that the price you quote is actually for a metric ton unit (MTU), which is 10kg of tungsten trioxide (WO3). This in turn contains 7.93kgs of tungsten. A ton of actual tungsten is 100 times more expensive than you suggest in the article.
:)
wildrides
Tungsten price is on the floor already and with new mines opening here , there and everywhere in addition. Cant see it getting funding if it aint got it already . Tungsten is in over supply and its only gonna get worse with these new fangled LED bulbs instead of tungsten bulbs .
catempire
Shareprophets claim to be exactly that “Shareprophets” … you send out ebooks “100 best mining stocks” yet in your articles you cannot differentiate between Ton’s and MTU’s.
All the gear.. No idea!!
Davidé
Wildrides, tungsten pricing has been very volatile over the past few years, which is symptomatic of the unstable supply and demand of the metal. There are certainly lots of ‘projects’ in the late stages, but not really any new producers currently, and there are some large current producers ramping down, notably in Canada. Who knows what the situation is in China – the main issue for Tungsten is the lack of visibility, so short-term outlook is murky. However in the long-term I think it’s highly likely that demand will continue to grow; China may not be growing as quickly but it’s industrialisation has not slowed, which is a more important indicator for this sort of material.
With regards to usage, lighting filaments are a small percentage of global use and that reduction has been baked into the supply/demand chain for many years. Personally I feel it’s far more likely that there will be positive demand changes in the next decade (the move by Intel to ensure non-conflict tungsten supply could have a positive impact on non-artisanal miners for example)
Marc johnson
wildrides
you having a laugh what a stupid post. Look at the Cost of getting it out the ground compared to most tungsten plays. very low and with the IRR as it is most tungsten plays wont have the flexilbility of PREM. Undetgorund mining has an IRR of 450% so even more flexilbility. I think you should go look at the last presentation from the CEO regarding funding he already has it. And whilst your looking i suggest you actually look at what tungsten is used for nowadays…..lightbulb comment did make me chuckle tho
Eyeguy
Another point which is pretty huge, is that all of Premier’s spend on RHA will be returned to Premier BEFORE any profit split from the indigenisation laws. So Premier will be owed circa $12 million which they will get back, likely over a 9 month period after underground mine has been paid with any capex from the pit mine.
And the MCAP here is just over £4 mill. Laughable.
wildrides
Davy and Marky
Your in denial fellas …………… just look at the 5yr price graph . If this deal was so good they would have had finance in long ago. No one wants the stuff ……….. every Tom, Dick and Harry are exploring for it and new mines are coming on stream right now WLFE for example . Not enough loot to finish the project at this late stage …….. dear dear .
Marc Johnson
Wildrides you have already shown your a lunatic by suggesting tungsten isn’t worth anything cos it only gets used in bulbs! Nutter. Check the capex of wolf and grades and as you’ve said tungsten prices are low so who goes first us or them? Also funding has been sorted but he’s got two deals so far and awaiting to pick the rest. Also if you had any clue about life in general you’d notice prem have a world class lithium mine due for more testing and 3million with of share in a world class potash resource which they put as finance against funding. Now jog on and try your amateurish research and comments on the 100s of shares which a rubbish on aim. Or tell me a better share I’m intrigued.
Eyeguy
Wild rides- may I suggest then the mining sector isn’t for you. The profit margin even at a 30% discounted sale price is still 100% for RHA. All in costs circa $89/MTU.
Find me a gold producer with these costs with a funded mine with a NPV of circa $200 at an mcap of £4 million and I will call you a liar.
The majority of new producers have break even costs over $250/MTU. I can post my research here later if you are naive to this fact. This will mean that the supply/demand equilibria will shift if tungsten price becomes too low. IE no supply with increasing demand pushing prices up again.
RHA will have some of the lowest Capex, OPEx numbers in the industry with the highest grades and the probability of expanding the resource and operation 5 fold with existing revenues. This has all been mentioned either on RNS or presentations.
All this for £4 million mcap.
And they have $2.5 mill of circum shares and are owed circa $12 mill from RHA