6th Dec 2018 18:29
LONDON (Alliance News) - Metals exploration firm Cradle Arc PLC suspended its shares from AIM trading on Thursday while it seeks insolvency advice and clarification of its financial position.
The conditional USD4 million extension to a pre-existing working capital facility with Fujax Minerals & Energy Ltd has not been completed.
USD1 million of this was advanced to Cradle Arc subsidiary Leboam Holdings Pty Ltd, pending completion of the loan extension.
However, Fujax has said it will not permit any further drawdown unless Leboam agrees to alter the terms of the loan and grant security over its interest in the Mowana copper mine in Botswana in respect of the facility extension, as well other debts due to Fujax by Leboam.
Cradle Arc has been in negotiations to share security over Mowana with its secured debt providers, namely the holders of its USD10 million of secured loan notes which mature in April, a well as ZCI Ltd.
"To date, such negotiations have not been progressing in a positive direction," said Cradle Arc.
Mining operations at Mowana have been suspended until further notice.
"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," Cradle Arc said.