CRA.L Share News (CRA)

LONDON (Alliance News) - Cradle Arc PLC, an African focused metal exploration company, said Tuesday its Mowana copper mine in Botswana is showing a significant increase in its grade resource and that it has secured USD10 million funding.

The mining company will implement an accelerated development plan following the positive resource update in order to fast-track access to deeper ores.

An estimate from the Mowana mine shows 1.2% copper for 861,000 tonnes of contained copper from 75 million tonnes. Measured and indicated resource estimates from 40 million tonnes at 1.17% copper for 466,000 tonnes of contained copper.

On a directly comparable basis, at a cut-off, the resource grade has increased by 18% and contained copper by 6%.

A USD10 million debt funding has been secured for the accelerated development plan and will enable the company to refinance offtake linked pre-payment facility provided by Fujax Minerals and Energy Ltd.

An additional mining fleet of 25 vehicles, including trucks, excavators, loaders and support equipment will be delivered to the site to facilitate the accelerated development.

Kevin van Wouw, CEO of Cradle Arc, said: "Mowana has demonstrated its significant scale and, following the successful recommencement of production during 2017, our focus has now turned from the testing phase to increasing throughput and building towards profitability. To achieve this, we have formulated an Accelerated Development Plan, whereby four mining units will be in service in the Mowana open pit. We are delighted to have secured US$10 million of debt funding to support these efforts and refinance part of the Group's existing indebtedness. The net funds raised will enable us to bolster our mining fleet, accelerate access to the supergene and sulphide ores where grades are higher and recoveries have been shown to be strong, and refinance the Group's offtake linked pre-payment facility to reduce overall borrowing costs and improve the capital base of the group.

"Our new resource model captures our improved understanding of the Mowana opportunity, allowing for better returns to be achieved in the near term as we move from the testing and recovery phase towards steady state operations and our goal of achieving initial nameplate capacity of c.12,000 tonnes of copper per annum. Alongside this, work continues on the definition of the maiden JORC (2012) reserve estimate, which will incorporate the planned process plant improvements so that, once we have achieved initial nameplate capacity at the current plant, we can look to build production to over 20,000 tonnes per annum via the planned DMS upgrades. With a restructured and strengthened balance sheet and clearly defined accelerated development plan, we look forward to establishing Mowana as a major copper producer."

Shares in Cradle Arc were up 14% to 7.24 pence each Tuesday morning.