Premier African Minerals (LON:PREM) is considering using existing underground shafts and a new processing plant to bring its RHA Tungsten projectin Zimbabwe into production next year.
Originally, the mine plan envisaged an open pit and development of a decline for future underground mining.
The new approach would enable production to commence from as soon as the early part of next year at a reduced mining rate with expansion taking place progressively thereafter.
Premier added it would also be able to finance this alternative without the need to raise further equity.
A review is underway and expected to be completed by August. This will include the specifications for the new processing plant and also new metallurgy.
Recent tests will have to be repeated after recoveries came in at 60% instead of an expected 88%. The new tests will use underground material.
Any offtake agreement will be signed only after this work has been completed, Premier African said.
The group has appointed Wolfgang Hampel as exploration manager and is close to appointing a project director to manage the RHA project.
George Roach, Premier’s chief executive, said: “The companynow has the funding to contemplate the low capex, near-term production alternatives for RHA.
“Whilst I am frustrated that the metallurgical studies need to be repeated, a satisfactory result will significantly strengthen our confidence in the project.”
Premier African has a 49% interest in RHA and is the operator.
Broker VSA added that quarterly cash settlement payments from Circum Minerals, for the Danakil project sale, will be crucial to realising the funding and development plan for RHA in the coming months.
For the first time, Premier also mentioned a potential pilot plant on its Zulu lithium project, also in Zimbabwe, where VSA had not ascribed a value as news has been so scarce.
Speculative buy remains VSA’s stance, thugh ti won’t set a target price until the review is complete.