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Cradle Arc PLC (CRA)

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Tuesday 26 June, 2018

Cradle Arc PLC

Operational Update and 2018 Production Guidance

RNS Number : 5673S
Cradle Arc PLC
26 June 2018
 

26 June 2018

Cradle Arc plc

("Cradle Arc" or the "Company")

Operational Update and 2018 Production Guidance

Cradle Arc (AIM: CRA), the African focused base and precious metals exploration and production company, is pleased to provide an update in respect of operations at its 60 per cent. owned Mowana Copper Mine in Botswana ("Mowana" or the "Mine"), together with production guidance for the remainder of 2018.

 

Highlights:

·    Project level operational cash flow break even expected to be achieved at Mowana for the month of June 2018, with cash generation expected to improve throughout H2 2018;

·     The ramp-up of mining activities at the Mine re-commenced in mid-April 2018 following the announcement of the Company's accelerated Mine development plan (the "Accelerated Development Plan") and US$10 million of secured debt funding;

·     At least 5,700 tonnes of contained copper is expected to be produced in H2 2018;

·     Third and fourth mining units scheduled to be brought on-line by the end of June 2018 and towards the end of September 2018, respectively;

·     Approximately 1.1 million tonnes of ore and waste has been mined in Q2 2018, with mining rates expected to approximately double in Q3 2018, reaching a rate of 3 million tonnes being mined in Q4;

·     Full re-commissioning to steady state operations of the process plant expected to be achieved by the end of Q2 2018;

·     Process recoveries of copper continue to be commensurate with the projected recoveries for the mined blocks concerned at an overall average of approximately 56 per cent. for Q2 2018, reflecting the fact that predominantly transitional ores were mined, with recoveries of up to 76 per cent. being achieved on the high supergene ores;

·     Process recoveries of copper ultimately expected to reach an overall average of 85 per cent. as more sulphide dominant areas are accessed;

·     Approximately 650 tonnes of contained copper is expected to be produced in Q2 2018; and

·     Thakadu / Makala mining licence extension granted to March 2019 by the Ministry for Mineral Resources, Green technology and Energy Security (the "Ministry"), thereby enabling further work to be conducted and a full submission to be made in respect of Cradle Arc's development plan for Makala, potentially involving an underground satellite mine 70km from the current Mowana site.

 

Further details are available in the Company's latest corporate presentation, available on its website at www.cradlearc.com.

 

Kevin van Wouw, CEO of Cradle Arc, commented:

"Our new development approach for the Mowana mine is now delivering the increased production planned as a result of the accelerated mine plan announced in April 2018.

 

"Although it is still relatively early in the ramp-up stage of operations under the Company's revised mine plan, I am delighted that the key performance criteria set by the Board are currently being met and backed-up by actual operational data.

 

"This is an opportune time to be bringing on additional production to the copper market - positioning the Company to take advantage of currently tight global supply conditions."

 

 

Further information:

 

The ramp-up of mining operations at Mowana re-commenced in mid-April 2018, following the Company's announcement of its Accelerated Development Plan and raising US$10 million of secured debt funding, with two mining units working full time throughout Q2 2018 and the third mining unit scheduled to be brought on-line before the end of the month. The Company will now focus on developing sufficient space in the mining pits to allow the fourth mining unit to commence operations towards the end of Q3 2018.

 

Approximately 1.1 million tonnes of ore and waste will have been mined by the end of the Q2 2018, with mining rates expected to approximately double in Q3 2018 and ultimately reach a rate of approximately 3 million tonnes being mined in Q4 2018.

 

http://www.rns-pdf.londonstockexchange.com/rns/5673S_1-2018-6-26.pdf

 

In mid-May 2018, the first 40,000 tonne blast of transitional ore was produced in line with the mining reserve plan and the processing plant at Mowana is expected to reach full re-commissioning to steady state operations by the end of June 2018. Recoveries of copper continue to be commensurate with the projected recoveries for the mined blocks concerned with an overall average of approximately 56 per cent. for Q2 2018, reflecting the fact that predominantly transitional ores have been mined to date. Following implementation of the Accelerated Development Plan, mixed transitional ores with oxide dominant tenor achieved an average of approximately 50 per cent. recoveries, while supergene dominant ores achieved recoveries of up to approximately 76 per cent. As mining progresses through the mixed oxide / supergene / sulphide phases of the ore-body according to the Company's mine plan, recoveries are projected to continue to improve as more sulphide dominant blocks are accessed, with recoveries ultimately expected to be reach an average of approximately 85 per cent.

  

http://www.rns-pdf.londonstockexchange.com/rns/5673S_2-2018-6-26.pdf

 

Following the implementation of the Accelerated Development Plan, approximately 650 tonnes of contained copper is expected to be produced in Q2 2018. In H2, production is expected to be at least 5,700 tonnes of contained copper. In line with the upward trend in mining rates and expected recoveries, production will be positively weighted towards Q4 2018, when the Company currently expects to reach the full nameplate processing rate of 1.2 million tonnes of ore per annum.

 

The Company currently expects the cash costs of operations at Mowana to achieve break even this month, with cash generation expected to improve throughout the rest of the year, in-line with production ramp-up. The cash cost on a unit basis is expected to decrease commensurately, as a largely fixed cost base is spread over the increased production. The Company intends to initiate detailed quarterly operational updates from Q3 2018.    

 

Mining Right ML2101/96L over the Thakadu / Makala resources extended

 

As set out in the Company's Admission Document published on 18 January 2018, the mining licence covering the Thakadu / Makala open pit mine (ML2010/96L) ("Thakadu") expired on 7 December 2017 and the group was then in the process of seeking an extension from the Ministry for Mineral Resources, Green technology and Energy Security in Botswana.

 

The Company is pleased to announce that the Ministry has granted an extension for the Thakadu licence to 7 March 2019 (the "Extension"). The Extension will enable the Company to complete a work programme and prepare the requisite documentation to support its submission for a 10-year mining licence.

 

Accordingly, work has now started to satisfy the requirements set out by the Ministry and, from its work completed to date, the Company believes that an underground mine operation is viable at Thakadu, which would serve to provide additional copper production within 70km of the current Mowana site. In light of the close proximity of the Thakadu deposit to Mowana and the existing infrastructure in place across the two licence areas, an underground mine at Thakadu would be able to share Mowana's processing facilities and would therefore essentially represent an extension of the existing Mowana mine.

 

Thakadu contains Indicated resources of 2.268 Mt at 1.11% Cu and Inferred Resources of 5.38 Mt at 0.63% Cu, while Makala has Inferred resources of 11.5 Mt @1.46% Cu (Golder Associates report Nov 2014, NI 43-101 Compliant).

 

 

**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

Angela Hallett

Matthew Chandler

James Dance

 

Tel: +44 (0)20 7409 3494

Tamesis Partners LLP

Richard Greenfield

 

Tel: +44 (0)20 3882 2868

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, 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.

 

 


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.
 
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