LONDON (ShareCast) - Premier African Minerals, an AIM-listed natural resource company, fell after admitting the metallurgical study on the RHA tungsten project in Zimbabwe needs to be repeated.

At 60%, the study sample grade was deemed "acceptable", but according to Premier "under-estimates the anticipated outcome" meaning further testwork must be undertaken using new underground material samples, so as to enable optimisation of the tungsten crushing and milling processes.

In positive news, the completed initial mineralogical study on which the RHA mining study update is being based has indicated a high grade concentration and anticipated recoveries of around 88%.

Premier also said it had commissioned a further review of potentially low capital cost, near term production alternatives at its RHA project, in which it holds a 49% operating interest.

The new approach being reviewed will examine the potential for an immediate start of mining operations through the utilisation of the existing underground development and shaft system, and construction of the plant at the historic site.

The plant and flow sheet is expected to be of similar design and capacity to that contemplated in the initial mine study.

If approved, the new approach is expected to be adopted from the early part of 2015 at a reduced mining rate with expansion taking place progressively thereafter. The group anticipates the approach could be undertaken without any need for further equity.

Furthermore, the company announced that it has appointed Wolfgang Hampel as Exploration Manager and expects to announce the appointment of a Project Director who will manage the investigation of the near-term production opportunities.

Chief Executive George Roach said: "[...] The company now 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."

Shares dived 18.18% to 0.9p by 09:52.

NR

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