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Cradle Arc PLC (CRA)

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Thursday 06 December, 2018

Cradle Arc PLC

Operational and Financial Update and Suspension

RNS Number : 7301J
Cradle Arc PLC
06 December 2018
 

 

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.

 

 


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