Cradle Arc PLC (LON:CRA) shares ticked up in early trading Monday after it hailed a “vote of confidence” in its Mowana copper mine in Botswana following an extension to its working capital facility for the project.
The firm said its 60% owned subsidiary, Leboam Holdings, had secured a US$4mln extension from Fujax Minerals and Energy Limited, an Africa-focused raw materials supplier, which would be used for general working capital at the project.
READ: Cradle Arc jumps as it obtains loan facility to improve processing facilities at Mowana project
It follows news in October that the company had secured a US$2mln loan from its largest shareholder to create an inventory of spare parts and improve and rehabilitate the processing facilities at Mowana.
Kevin van Wouw, chief executive of Cradle Arc, said that the extension was “a vote of confidence in the Mowana operations” and ensured that the company had “sufficient headroom and contingency” as it sought to recommence its production ramp-up.
Cradle also updated on the performance of the project in the fourth quarter.
Mowana had produced 140 tonnes of contained copper (Cu) in October compared to the original forecast of 392 tonnes, mainly due to intermittent equipment breakdowns at its processing plant which had impeded production.
However, Cradle added that following a series of repairs stable production was expected for the remainder of the quarter, with final concentrate grades achieved in the period to date above forecast levels.
A mill reline, planned for the last week of November, was also expected to see throughput at the mill increase to 155 tonnes per hour.
Recent testing on the main ore body in the north pit had also confirmed around 2mln tonnes of ore that is currently accessible, with metallurgical flotation test work (a method of extracting minerals from ores) returning copper recoveries of over 76%.
Van Wouw said that key improvement and rehabilitation works at the processing plant had largely been completed, saying the group expected “steady improvement in performance of the project over the coming months”.
Shares were up 1.2% at 0.8p.