Cradle Arc, the African focused base and precious metals exploration and production company, says further to its announcement of 19 November 2018, the conditional US$4m extension to its subsidiary, Leboam Holdings (Pty) Limited’s, pre-existing working capital facility with Fujax Minerals and Energy Limited has not been completed.
According to the company, 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,” Cradle Arc said recently.
“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.”
Cradle Arc said 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.”