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Alecto Minerals raises £1mln to fund restart of recently-acquired copper mine

Published: 12:51 17 Jan 2017 GMT

copper wire
Alecto is hoping to bring the mine back on stream in the first quarter of this year

Alecto Minerals PLC (LON:ALO) has wasted no time in securing some of the financing to bring back on stream its recently acquired Mowana copper mine in Botswana.

The Africa-focused gold and copper explorer has issued £1mln worth of convertible loan notes to help fund the restarting of operations at the project.

If not converted into Alecto shares the notes are repayable by 16 July 2017 and carry an interest rate of 20% plus an initial £50,000 fee.

Interest payments will be satisfied through the issue of Alecto shares at 0.06625p a pop, which means up to 301.890mln shares could end up being issued to the holders of the notes.

The holders may opt, however, to convert some or all of the notes into Alecto shares in a 10-day period after Alecto's shares are readmitted to Aim (the shares are currently suspended).

The closing price of Alecto shares on the day they are readmitted will set an upper limit on the price at which the shares can be converted; note holders may opt to convert the shares at 80% of the previous day's closing mid-market price if that is lower.

Alecto will syphon off some of the funds raised from the loan note issue to provide a loan of up to US$1mln to Cradle Arc Investments, the company that owns the Mowana copper mine in Botswana and which is being acquired by Alecto via reverse takeover.

The South African group providing off-take financing to Mowana – Fujax Minerals and Energy – will also lend up to US$1mln to Cradle.

That will give Cradle around US$2mln in short-term funding to help bring the mine back into production, which is slated for the first quarter of this year.

At a copper price of US$2.50 per lb, Alecto's internal estimate for the project's net present value is US$245mln.

Mowana has a resource of 683,000 tonnes of copper in the Measured and Indicated categories.

The mine operated between 2008-2015 before it was shut, but Alecto believes it can remodel the operation to slash its costs.

Cradle Arc PLC renews two prospecting licences 'with significant potential'

Kevin van Wouw, chief executive of Cradle Arc Plc (LON:CRA) tells Proactive's Andrew Scott they've renewed prospecting licences for an area north of its Mowana copper mine in Botswana. He says two renewals have been granted by the Botswana Ministry of Minerals, Energy and Water Resources...

on 21/9/18