Premier African Minerals Limited (LON:PREM) has published a shareholder update from Circum Minerals Limited, in which it holds around 5mln shares.
In the update, Circum said various parties were in the process of due diligence for a potential sale or development agreement of its Danakil potash project in Ethiopia and that the process was expected to conclude by the end of the year.
In the event that the project is taken forward to development, Circum said it intended to finance it through a combination of debt and equity to enhance returns and that a London based financial advisor was appointed in the second half of 2018 to structure a suitable debt package and excellent progress had been made in this regard with expressions of interest received from various commercial and development banks for the entire debt package.
The next step would be the appointment of Circum’s owners engineer, which would, in due course, lead to the shortlisting and selection of the various contractors required to execute the construction work programmes.
In terms of the potash market, Circum said prices for the mineral had continued their recoveries from 2017 lows owing to tight global supply and demand fundamentals, while its own product had been market tested and was deemed to be of “excellent” quality and in high demand.
The company also said the Ethiopian government remained supportive of the project and was continuing with major infrastructure work to open Danakil to development.
Looking forward, Circum said it was “optimistic” that the positive developments would result in a successful liquidity event for shareholders in due course.
In late-morning trading on Wednesday, Premier African shares were down 9.9% at 0.07p.