Modern Mining April 2018

COPPER

production of approximately 12 000 tonnes of copper in concentrate. Van Wouw notes that the financial resources to implement the ADP are in in place, Cradle Arc having raised £5,5 million in pre-IPO and IPO equity raisings and, more recently, securing a US$10 million debt facility. The ADP will see four mining units in ser- vice in the Mowana open pit, with each mining unit consisting of a 75-tonne excavator and five 40-tonne articulated dump trucks (ADTs). The mining units will be able to operate indepen- dently of each other and will enable Crade Arc to mine multiple faces simultaneously. The expected increase in ROM tonnage will permit improved blending and will also allow Cradle Arc to build stockpiles of ore ahead of the planned implementation of the DMS upgrade. The exact timing of the DMS expansion is still uncertain but Cradle Arc should complete all preparatory work shortly, opening the way to an investment decision. Should the go-ahead be given, a build time of roughly six months is expected. Under a best-case scenario, this could mean that the DMS could be commissioned either late this year or early in 2019. The exact cost of the expansion has yet to be determined but is unlikely to exceed US$20 million. To facilitate the ADP, Cradle Arc has greatly expanded its mining fleet, with the arrival on site of 20 ADTs (all of 40-tonne capacity), three Cat D8 dozers, two Cat 374 excavators and ancil- lary equipment. Most of the machines have been sourced from the New Luika mine in Tanzania, where the contract mining operation has now ended as the mine has transitioned into being a mainly underground operation. The fleet was owned by Digmin – which was responsible for the open-pit mining at New Luika through its subsidiary, Bamboo Rock Construction – but has now been purchased by Cradle Arc. “We’ve had a long association with Digmin and its founder, Gerald Chapman, and they are acting as our mining partner at Mowana,” says Jones. “Cradle Arc will undertake the mining directly but with Digmin managing the opera- tion and the maintenance of the fleet.” Also partnering with Cradle Arc at Mowana is Penmin, the company founded by van Wouw (although he no longer has an executive role with it). Penmin has a range of mining skills but, in respect of Mowana, it will mainly be contributing its expertise in metallurgy and in the design, construction and operation of pro- cess plants. It should be mentioned that Cradle Arc also has the rights to the Makala deposit (part of the Thakadu mineralisation) which has a

higher grade (1,8 % Cu) than Mowana and also silver credits and which lends itself to being exploited by underground mining methods. Cradle Arc intends launching a study on the project later this year. Summing up the prospects for Mowana, van Wouw says the mine is an excellent asset. “We’re in no doubt that we can make it work. The current base case NPV for the mine is USS$87 million but this increases to US$245 million if we implement the DMS upgrade, which would lift annual copper production to plus 20 000 tonnes. Certainly Mowana has its challenges but we’ve put together a highly experienced team to run it and we have a clear strategy in place to turn it into a profitable, long-life operation. We’re confident that we will make real progress in the coming year and that Mowana will finally start to realise its con- siderable potential.” 

The maintenance workshop at Mowana.

Option agreement on Zambian gold assets The latest news with respect to Cradle Arc’s Matala and Dunrobin properties in Zambia is that the company has entered into an agreement with Singa Holdings Zambia Private Limited. In terms of the agreement, Cradle Arc has granted Singa an option to establish a joint venture and/or an option to acquire the entire issued share capital of Luiri Gold Mines Limited, Cradle Arc’s wholly owned subsidiary, which holds the Zambian gold assets. Comments Kevin van Wouw, Cradle Arc’s CEO: “The development of our Zambian gold assets has long been an important goal for the company. We are, however, extremely mindful of the potential dilution that raising equity funds for the development of Matala could have on existing shareholders at the company’s current share price, and we therefore consider that this partnership with Singa represents the best path towards potential produc- tion in the near to mid-term.” He adds that in the event of the share option being exercised, the com- pany would receive US$2,5 million, which would contribute towards the cost of the planned DMS upgrades at Mowana, as well as a potential future royalty stream from Matala and Dunrobin. 

April 2018  MODERN MINING  25