6 Dec 2018 16:50
Cradle Arc plc / EPIC: CRA.L / Market: AIM / Sector: Mining
6 December 2018
Cradle Arc plc
("Cradle Arc" or the "Company")
Operational and Financial Update
and Suspension of Trading
Cradle Arc (AIM:CRA), the African focused base and precious metals exploration and production company, announces that, further to its announcement of 19 November 2018, the conditional US$4m extension to its subsidiary, Leboam Holdings (Pty) Limited's ("Leboam"), pre-existing working capital facility (the "Working Capital Facility Extension" or "WCFE") with Fujax Minerals and Energy Limited ("Fujax") has not been completed.
As previously announced, the Working Capital Facility Extension was conditional on, inter alia, the completion of the requisite documentation and Fujax's final credit committee approval. Whilst Fujax advanced the sum of US$1m to Leboam pending completion of the extended facility, it has now informed the Company that it will not permit any further drawdowns unless Leboam agrees to vary the previously agreed, but not legally binding, terms and grant security over its interest in the Mowana Copper Mine in Botswana ("Mowana" or the Mine") in respect of both the WCFE and all other indebtedness due to it by Leboam.
Accordingly, the Company has entered into negotiations with certain of the group's secured debt providers, namely the holders of the US$10m secured loan notes, which mature in April 2019, and ZCI Limited, to seek their consent to share their security over Mowana with Fujax. However, to date, such negotiations have not been progressing in a positive direction.
The inability to agree the requisite documentation for the WCFE and hence be able to draw down further on the WCFE has placed significant pressure on Leboam's working capital position, such that Leboam's Board has regrettably decided to suspend mining operations at Mowana until further notice.
In light of the above, the Company's Board is seeking insolvency advice and, accordingly, pending clarification of the financial position, the Company has requested that the trading of its ordinary shares on AIM be suspended as soon as practicable.
A further announcement will be made as and when appropriate.
**ENDS**
For further information on the Company, please visit www.cradlearc.com or contact:
Cradle Arc plc Kevin van Wouw Mark Jones | Tel: +44 (0)20 7637 5216 |
Strand Hanson Limited James Spinney Matthew Chandler
|
Tel: +44 (0)20 7409 3494 |
SP Angel Corporate Finance LLP Ewan Leggat John Meyer
|
Tel: +44 (0)20 3470 0470 |
Tavistock Communications Limited Charles Vivian Gareth Tredway |
Tel: +44 (0)20 7920 3150 |
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 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.