CRA.L Regulatory News (CRA)

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

10 September 2018

Cradle Arc plc

("Cradle Arc" or the "Company")

Joint Venture with Indiana Resources for the Advancement of theKossanto West Gold Project in Western Mali

Cradle Arc (AIM: CRA), the African focused base and precious metals exploration and production company, is pleased to announce that Caracal Gold Mali SARL ("Caracal"), its wholly owned subsidiary, has entered into a joint venture agreement (the "Joint Venture" or "JV") with Mukuyu Resources (Mali) Limited ("Mukuyu") for the exploration and development of Cradle Arc's 137 km2 Kossanto West Gold Project in western Mali ("Kossanto West" or the "Project") comprising the Kobokoto Est and Koussikoto exploration permits (the "Permits"). Mukuyu is a wholly owned subsidiary of Indiana Resources Limited ("Indiana Resources") an ASX listed base and precious metals exploration company.

Highlights

· Joint Venture formed for the exploration and development of Kossanto West which is in line with Cradle Arc's stated strategy to retain exposure to its African gold exploration portfolio and potential upside whilst minimising its exploration and development spend

· Pursuant to the terms of the Joint Venture:

o Indiana Resources to fund all costs up to and including the completion of a pre-feasibility study ("PFS") on the Project

o On completion of a PFS, Indiana Resources will hold a 65% participating interest and Cradle Arc will retain a 35% participating interest in the Permits

o All costs thereafter will be split between the JV parties in accordance with their participating interest

o The permits will continue to be held by Caracal, until such time as the JV Committee establishes a new company ("NewCo") for the future development of a mine

o On formation of NewCo, Caracal will transfer the relevant Permits to NewCo, with the JV partners expected to hold 90%, in the same proportion as their respective participating interests in the JV, and the Malian Government expected to hold the balancing 10%

· Initial work programme includes further geological mapping of Kossanto West with potential follow up pitting and trenching activities and reconnaissance drilling, which is anticipated to be undertaken by Indiana Resources over the first 12 months

Kevin van Wouw, CEO of Cradle Arc, commented:

"This agreement enables Cradle Arc to advance its highly prospective West African gold assets, whilst maintaining its primary strategic focus on the development of the Mowana Copper Mine.

"The terms of the JV do not require Cradle Arc to fund exploration activities up to the PFS stage, such that accordingly there will be minimal impact on the Company's balance sheet as we continue to focus on our core asset in Botswana.

"We are delighted to be working with Indiana Resources through their subsidiary, Mukuyu. Indiana Resources has a high-quality team in place and a complementary portfolio of assets in Mali."

The Joint Venture

Caracal, Cradle Arc's wholly owned subsidiary, and Mukuyu, a wholly owned subsidiary of Indiana Resources, have entered into the Joint Venture in respect of the advancement of Kossanto West.

On completion of the JV, Indiana Resources will hold a 65% participating interest in the Permits with Cradle Arc retaining a 35% participating interest with Indiana Resources responsible for undertaking all exploration work over the Permits and funding all costs up to and including the completion of a PFS. On completion of a PFS, all costs thereafter will be split between the JV parties in accordance with their participating interest.

A joint venture committee (the "JV Committee") will be formed, comprising one representative from Indiana Resources and one from Cradle Arc, in order to manage the JV and approve, inter alia, the work to be undertaken and budgets for the Project, approval of a PFS and any decision to proceed with the future development of a mine. The representatives from each party shall each exercise a vote at the JV Committee equal to their respective participating interests in the JV. The JV Committee will also be responsible for the decision to establish NewCo, at which point the relevant Permits will be transferred from Caracal to NewCo, with the Malian Government currently expected to be issued 10% of NewCo (being a free carried interest or such other holding as may be prescribed by Malian Law) and the JV partners expected to hold the remaining 90%. This will initially be held in the same proportion as each company's respective interests in the JV, resulting in Indiana Resources holding 58.5% and Cradle Arc holding 31.5% of NewCo, assuming that Indiana Resources and Cradle Arc maintain their respective participating interests at the same level subsequent to the completion of a PFS. Cradle Arc has guaranteed the due and punctual performance by Caracal of Caracal's duties and obligations to Indiana Resources under the terms of the Joint Venture agreement. Each party has pre-emption rights in the event that the other party wishes to dispose of its participating interest in the Joint Venture.

The Joint Venture is conditional on the completion of certain routine matters that are customary for an agreement of this nature and are expected to have been satisfied within 30 days of signing the agreement. A further announcement will be made by Cradle Arc upon the satisfaction of these conditions as appropriate.

Kossanto West

Kossanto West comprises the Kobokoto Est and Koussikoto exploration permits which cover 137 km2 in western Mali. These permits were previously subject to a JV with Randgold Resources (Mali) Ltd ("Randgold") that was terminated earlier this year.

It is interpreted that a major structural event occurred within the permit boundaries of Kossanto West. The regionally significant Main Transcurrent Shear Zone ("MTZ") appears to change its strike direction from NNE to NNW, and exploration work completed by Cradle Arc and confirmed by Randgold identified numerous high-grade gold targets coincident with this change of the MTZ.

The Joint Venture Work Programme

Indiana Resources will build on the excellent ground work that was completed by Randgold. Their focus will be to quickly establish drill targets for either diamond core and/or reverse circulation drilling. It is anticipated that this work could be completed during the first 12 months of the Joint Venture.

**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, a fully operational open pit mine and processing facility located in the north-east of the country, approximately 120km northwest of Francistown.

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