LONDON (Alliance News) - Cradle Arc PLC on Monday said Leboam Holdings (Pty) Ltd has obtained a loan of USD2.0 million to fix breakdowns and interruptions at the Mowana copper mine in Botswana.
Cradle Arc has a 60% ownership of Leboam and the loan facility has been provided by Cradle Arc's largest shareholder, PenMin Botswana Proprietary Ltd.
The loan has an interest rate of 13.5% per year which compounds monthly and increased by 2% in the event of any default.
The USD2.0 million will be used to improve and rehabilitate the processing facilities at Mowana, which have been subject to "intermittent breakdowns and interruptions" that prevented Cradle Arc from meeting its production targets in the third 2018 quarter.
Completion of the loan is conditional on a debt sale agreement with Fujax Minerals & Energy Ltd. Under this, a sum of USD3 million that Cradle Arc owes to penMin under its existing agreements will now be paid to Fujax.
Shares in Cradle Arc were up 11% at 1.33 pence on Monday.