CRA.L Regulatory News (CRA)

Cradle Arc plc / EPIC: CRA.L / Market: AIM / Sector: Mining

15 October 2018

Cradle Arc plc

("Cradle Arc" or the "Company")

Extension of Thakadu and Makala Mining Licence

Cradle Arc (AIM: CRA), the African focused base and precious metals exploration and production company, is pleased to announce that the Botswana Ministry of Mineral Resources, Green Technology and Energy Security ("MMR") has extended the group's existing Mining Licence No. 2010/96L (the "Licence"), which is now valid until 31 May 2020. The Licence area covers 28.5km2 and includes the Thakadu open pit and adjacent Makala underground deposit, approximately 70km south east of the Company's flagship Mowana copper mine ("Mowana").

Highlights

· Extension of Mining Licence No. 2010/96L granted by the MMR in Botswana, which is now valid until 31 May 2020, covering the Thakadu and Makala deposits.

· Thakadu was mined by its previous owners, with ore delivered to the Mowana processing plant, up to June 2015.

· Thakadu has a JORC-compliant indicated mineral resource estimate of 2.3Mt at 1.11% copper and 11 g/t of silver, and a JORC-compliant inferred mineral resource estimate of 5.4Mt at 0.63% copper and 9 g/t of silver.

· Makala, which is 700m north east of Thakadu, is a higher grade copper and silver deposit containing a JORC-compliant inferred mineral resource estimate of 11.5Mt at 1.46% copper and 34 g/t of silver.

· Shallow, historical mining between the two deposits indicates the potential for future infill drilling to join the two deposits along strike to create a total strike length of over 3km.

· Makala and Thakadu have been the subject of two historical independent scoping studies that indicate underground mining techniques can potentially be deployed to successfully exploit the deposit.

· The combined deposits have the potential to contain a resource of over 50Mt, with an approximate 19Mt resource already established in the indicated and inferred categories as noted above.

Kevin van Wouw, CEO of Cradle Arc, commented:

"We have always believed that the Makala and Thakadu deposits present a great opportunity for Cradle Arc. Thakadu ores were mined and transported to our Mowana copper mine by its previous owners as recently as 2015, so we have significant existing knowledge of the potential quality of the copper sulphide ore which also has significant silver credits.

"Now that we have been formally granted an extension to the mining licence until the end of May 2020, we can, subject to obtaining the requisite finance in due course, start to plan for the additional drilling required in the future to enhance the confidence of the existing resource, a vital step towards completing a feasibility study for a potential underground mining operation using access from the base of the existing open pit."

Further information

The Licence covers the highly prospective Makala and Thakadu deposits 70km south east of the Company's existing Mowana copper mine. The licence area can be accessed from a well-maintained gravel road, approximately 5km away from the intersection with the tarred Francistown - Orapa A30 road, near the settlement of Matsitama, approximately 80km west of Francistown. There is also a 40km gravel road running north east to the A3 that was built to transport Thakadu ores to Mowana where the ores were processed.

Geology of the deposits

Both Thakadu and Makala are hosted within the Matsitama Metasedimentary Group, comprising carbonaceous and argillaceous metasediments which are enclosed within foliated granitoids of the Mosetse Complex. The Matsitama Metasedimentary Group lies in structural contact or unconformably over the granite/gneisses and forms two main areas of outcrop: the Matsitama Belt which hosts the Thakadu and Makala deposits and the arcuate "Bushman Belt" to the north where Mowana is located. The Matsitama Metasedimentary Group consists of greenschist to amphibolite facies metamorphic rocks with the following specific types of rocks identified: calcareous sandstones, conglomerates, pelites, arkoses, quartzites, volcanic tuffs and agglomerates, amphibolites, limestones, banded ironstones and serpentinites.

The copper mineralisation is broadly strata-bound and hosted by a complexly folded sequence of felsic sedimentary rocks, ranging between a thickness of approximately 50-150m. The felsic metasedimentary sequence includes siliceous carbonates, biotite schists, calcareous pelites and graphitic carbonates. The stratigraphy above and below the felsic package is dominated by amphibolite derived from mafic/intermediate intrusives, volcanic and volcaniclastic rocks.

Hypogene sulphide mineralisation is predominantly hosted by quartz and quartz-carbonate rich arenites and to a lesser extent in biotite schists. Chalcopyrite is the dominant Cu-sulphide with minor bornite. Pyrrhotite is present in some zones and the sulphides generally occur as irregular stringers and disseminations in the quartz-carbonate rich units and in irregular quartz-carbonate veined zones.

Thakadu

Up to June 2015, Thakadu was mined by its previous owners for high quality sulphide ores that were processed at Mowana with excellent recoveries. Mining ceased as all available ores in the open pit were mined out, however approximately 2.3Mt of indicated mineral resource and approximately 5.4Mt of inferred mineral resource remain in the deposit.

In November 2014, Golder Associates reported a NI 43-101 and SAMREC compliant in-situ indicated mineral resource estimate at a 0.25% copper cut-off of approximately 2.3Mt at a copper grade of 1.11% for 25kt of copper metal and a silver grade of 11 g/t for 800,000 ounces of silver metal, and an inferred mineral resource estimate of approximately 5.4 million tonnes at a copper grade of 0.63% for 34kt of copper metal and a silver grade of 9 g/t for 1.6 million ounces of silver metal.

The Thakadu deposit hosts various different styles of mineralisation, but is dominated by hypogene sulphides (chalcopyrite ± bornite) hosted within the quartz-carbonate units with a lesser near surface oxide zone. The Thakadu mineralisation has been traced from surface to approximately 420m below surface and over a strike length of approximately 600m.

Makala

The Makala deposit is located approximately 1,800m to the northwest (centre to centre) of the Thakadu deposit and approximately 700m from the deposit along strike. The Makala deposit is hosted within the same broad metasedimentary package as Thakadu with the principal lithologies enclosing the deposit being quartz-rich calcareous rocks, various mica schists, phyllites and minor carbonaceous (graphitic) phyllites and various amphibolites.

The aforementioned resource report by Golder Associates contains a NI 43-101 and SAMREC compliant in-situ inferred mineral resource estimate at a 0.25% copper cut off at Makala of approximately 11.5Mt at a copper grade of 1.46% for 167,000 tonnes of copper metal and a silver grade of 34 g/t for 12.5 million ounces of silver metal.

Peolwane

In between the two abovementioned deposits along strike is a 700m gap where no deep drilling has been completed. Shallow historical mining took place in this area showing the presence of copper minerals. In-fill drilling in this area has the potential to connect the two deposits along strike and to create a total strike length of over 3km.

Potential Resource

The Makala and Thakadu orebody is up to 12m thick, has been mapped down to a depth of 400m, and is open to both the West and down dip. Using a strike length of 3km, and an average orebody width of 8m, management believes that there may be the potential for a combined deposit with more than 50Mt of mineral resources if, as expected, the deposit continues on dip to a depth of 800m.

Scoping Studies

Two historical independent scoping studies have been completed on a potential underground mine at Makala and Thakadu using decline access from the bottom of the Thakadu pit. The first was completed by Coffey Mining in 2012 and, more recently Sound Mining completed a similar study.

The primary objective of a scoping study is to provide an overall financial and technical opinion of a project to aid management in its decision making as to the best route to advance the project. An indicative financial model was constructed in each of the abovementioned scoping studies on the basis of the known mineral resource estimates and a conceptual mining model created using mining inputs based on industry standard data.

Both studies indicated that the resource was eminently mineable with financial returns strong enough to justify further development.

The quality of both the Thakadu and Makala deposits should potentially enable each to be financed separately. Cradle Arc has therefore initiated discussions with potentially interested parties with the objective of completing the requisite in-fill drilling at Peolwane, upgrading the mineral resource estimates, and completing a preliminary feasibility study to present to the MMR

Kevin van Wouw, the Company's CEO and a Fellow of the South African Institute of Mining and Metallurgy, has reviewed and approved the technical information contained within this announcement. Mr van Wouw has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity that he is undertaking and meets the criteria for a qualified person under both the requirements of the JORC Code and the AIM guidance note for mining and oil & gas companies. Mr van Wouw has reviewed this announcement and consents to the inclusion in this announcement of the matters based on his information in the form and context in which they appear.

**ENDS**

For further information on the Company, please visit www.cradlearc.com or contact:

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) 596/2014.

About Cradle Arc

AIM-quoted Cradle Arc plc is the 60 per cent. owner of the Mowana copper mine in Botswana, an operational open pit mine and processing facility located in the north-east of the country, approximately 120 km northwest of Francistown.

The Company has an independent open pit ore reserve estimate (Proved and Probable JORC 2012) of 31.8 Mt at 1.17% Cu for 370,800 tonnes contained copper, based on a Dense Media Separation (DMS) mine plan.