Modern Mining February 2015

MINING News

Pre-production capex for tungsten project in Zimbabwe reduced

Premier African Minerals Limited has provided details of the Implementation Study report it has prepared in regard to the open-pit start up strategy for its RHA tungsten project in Zimbabwe. Premier is the operator of the proj- ect and holds a 49 % interest. Highlights of the report include a reduction in pre-production capital to US$4,15 million and in operating costs to US$89,1/mtu (metric ton unit). The pre-tax NPV (at a discount rate of 10%) is estimated at US$5,4million, the pre-tax IRR at 161 % and the payback fromfirst produc- tion at 10 months. “The Implementation Study confirms our strategy for RHA and supports our con- clusions that the open pit is projected to generate sufficient surplus cash to allow both commencement of repayment of loans made to RHA by Premier, and to finance the build of the underground operations,” com- ments George Roach, Premier’s CEO. “Most encouraging is the projected operating cost of US$89,1 per mtu WO 3 .” RHA will target processing of 8 000 tonnes of run of mine ore per month at a diluted grade of 10,24 kg/t to produce, on average, 92 tons of concentrate at 63 %WO 3 per month over a 22-month period. The definitive estimate is a culmination of work performed by Peacocke Simpson & Associates, Appropriate Process Technologies (APT), CAE Mining Africa, Senet, Blonton Management Consultants, Ground Water Development Consultants, Constant Chuma

Consulting and Bumira Environmental Consultants and is considered suitable as the control budget estimate for the execu- tion phase (-5 % to +15 %). The financial model incorporates firm quotations for 80 % of the pre-production capital estimate including fabrication and installation of the process plant, earth- works and civil works, a road upgrade, the mining contract, as well as the pro- curement and construction management contract. As we reported in last month’s issue, Premier recently placed an order for the project’s process plant. The plant is designed to meet a throughput of 16 t/h or 8 000 tonnes per month and achieve a wolframite recovery of 82,8 %. The stated production rate excludes any consideration of a pre-concentration circuit which, if implemented in future, could increase the plant throughput fivefold at a 20 % recov- ery loss as determined in the metallurgical test work announced in September 2014. The modular plant will be built in Johannesburg by Appropriate Process Technologies (APT). The modules will be containerised and trucked to site where it is expected that the process plant will be fully commissioned by mid-2015. The RHA project is located in Mata­ beleland North province, about 20 km south-east of Hwange and 270 km north of Bulawayo, the provincial capital. 

The RHA project layout showing pit and waste dumps.

February 2015  MODERN MINING  9