Premier African Minerals Ltd (PREM) Issues Equity For Settlement

The company commenced its operations in early 2007, under the name G&B African Resources Ltd. George Roach and Bruce Cumming founded the company. In 2012, the company went through corporate action, name change. It was changed from G&B African Resources Ltd to Premier African Minerals Ltd. The company invests in commodities like tungsten, lithium, titanium, phosphates, clays and rare earth elements; which can be easily converted to cash at a later stage.

The emphasis is laid on value creation through right acquisitions and continuous exploration which may further lead to strategic partnerships such as Joint Ventures etc. The company has bought mineral assets in the African region, focussing on sites where there has been historical production. The company has projects located in Zimbabwe, Mozambique and Togo.

On 28 May 2019, the board of the company issued shares (ordinary) to Directors, employees and to 3rd parties for settlement of unpaid amounts (accrued) to the tune of £145,787. These shares are termed as “Settlement shares”. The Company issued 54,241,382 shares to Directors as settlement for unpaid fees (accrued) at an issue price of 0.09 pence/share with the total amounting to £48,817. The company also issued 39,966,803 shares have been issued to certain employees in settlement of unpaid salaries (accrued) amounting to £35,970. In addition, 67,777,778 shares have been issued to 3rd parties as settlements for unpaid amounts (accrued) amounting to £61,000, at the issue price.

 The “KME Payment Shares” which were issued earlier has not been released till date by Premier to the KME. Premier African Minerals Limited has been unable to revise the relationship between the company and KME Plant Hire Proprietary Limited ("KME") for the next phase of drilling activities at the Zulu Lithium Project in Zimbabwe. The company controls the Zulu Lithium Project in Zimbabwe.

The company has cancelled the shares (212,413,793) which were issued as pre-payment to KME for mobilisation and drilling. As the long form drilling contract with KME was called off, the company has cancelled the delivery of shares which were supposed to be paid to KME and application is submitted to AIM for the cancellation of the KME Payment Shares. This is effective on or about 4 June 2019.

Since the proposed drilling programme by KME has been called off, the Company has once again initiated discussions held with the previous drilling contractor to recommence work at Zulu as the company believes that this should expedite the process.

The Company has been successful in establishing contact with the Zimbabwe Ministry of Industry, Commerce and Enterprise Development, which supervises National Indigenization and Economic Empowerment Fund of Zimbabwe (NIEEF).

The Company's agreement with NIEEF with respect to RHA Tungsten, (announced on 7 May 2019) has a binding provision to provide $6 million to the project. Till date, these funds are still awaited. While the company believes the agreement to be fruitful and expects NIEEF to comply with the terms agreed upon earlier.Â

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Financial Highlights for H1 FY2018 ($, thousand)

(Source: Annual Report, Company’s website)

There has been a subsequent decline in the revenue, which stood at $166,000 for H1 FY2018. The Operating loss stood at $1,394,000 in H1 FY2018 against $3,289,000 in H1 FY2017. The loss for the year stood at $1,481,000 in H1 FY2018 against $4,495,000 in H1 FY2017. The Cash and cash equivalents stood at $91,000 as on H1 FY2018, which was down by 52.10 per cent from H1 FY2017. The borrowings have gone up to $534,000; which was up by 71.15 per cent from H1 FY2017.

During the first half of the period ending 30 June 2018, the Company was able to raise $0.563 million through equity subscriptions, at an issue price of 0.16 pence per share, those proceeds were used to cancel all the existing warrants held by Darwin Capital Limited ("Darwin") and for general working of the company. The Company also entered a loan worth $0.300 million with a company owned by a Trust of which Mr George Roach is a beneficiary.Â

Premier African Minerals Limited Share Price Performance

Daily Chart as at June-10-19, before the market close (Source: Thomson Reuters)

On June 10, 2019, at the time of writing (before the market closed, at 12:57 PM GMT), Premier African Minerals Ltd shares were trading at GBX 0.075, with no change against the previous day closing price. Stock's 52 weeks High and Low is GBX 0.28 /GBX 0.0681. At the time of writing, the share was trading 73.21 per cent lower than the 52w High and 10.13 per cent higher than the 52w low. Stock's average traded volume for 5 days was 52,127,747.20; 30 days – 44,797,217.37 and 90 days – 53,971,299.02. The average traded volume for 5 days was up by 16.36 per cent as compared to the 30 days average traded volume. The company’s stock beta was 0.57, reflecting lower volatility as compared to the benchmark index. The outstanding market capitalisation was around £5.87 million.Â