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Cradle Arc Grants Singa Option To Acquire Zambian Assets

Mon, 16th Apr 2018 13:56

LONDON (Alliance News) - Africa-focused precious metals miner Cradle Arc PLC said on Monday it has entered an option agreement granting Singa Holdings Zambia Pvt Ltd to either form a joint venture, or acquire Cradle Arc subsidiary Luiri Gold Mines Ltd.

Luiri Gold Mines currently holds the Matala and Dunrobin gold assets in Zambia.

Singa has an exclusive option to acquire Luiri for USD2.5 million, which expires on July 1, and if exercised, Cradle Arc will receive a royalty of 1.5% of gross revenue generated from both assets up to a maximum aggregate of the net present value of USD2.5 million discounted at 8.0%.

The other option granted Singa, which expires on June 30, is to form a joint venture for the operation of the Matala and Dunrobin assets, which will be terminated on the start of commercial gold production.

Singa will pay an option fee of USD30,000 in three equal monthly tranches, starting on the date of agreement.

"The development of our Zambian gold assets has long been an important goal for the company. We are, however, extremely mindful of the potential dilution that raising equity funds for the development of Matala could have on existing shareholders at the company's current share price, and we therefore consider that this partnership with Singa represents the best path towards potential production in the near to mid-term," said Chief Executive Kevin van Wouw.

Shares in Cradle Arc were up 1.8% at 7.10 pence on Monday.

By Dayo Laniyan;

Copyright 2018 Alliance News Limited. All Rights Reserved.

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