Cradle Arc losses widen on Zambian impairment costs

Cradle Arc recorded revenue for the first time in 2017, but impairment costs associated with its exploration programmes in Zambia led to a significant widening of losses throughout the year.

Cradle Arc turned in a maiden revenue of £570,579, from the 12,000 tonnes of copper concentrate produced at the Mowana copper mine in Botswana, held through its 60% interest in mining company Leboam Holding.

The AIM-quoted firm saw pre-tax losses widen 220% to £13.8m, as administrative expenses grew 245% to £15.2m, principally due to an impairment of £12.6m on the value of its Zambian exploration assets.

Moving forward, Cradle intends to accelerate copper production at Mowana and enter into strategic partnerships as it hopes to become cash positive as a result of production increasing. A mineral resource estimate for Mowana showed a measured and indicated resource of 55.0Mt at 1.17% copper for 640,000 tonnes of contained copper.

After taking over Mowana the site has now started to deliver the recoveries and concentrate quality that management said they expected, with the plan for coming months being to add a Dense Media Separation pre-processing unit, as well as making other improvements with the aim of further improving and enhancing the extraction process.

Seeing the long-term pricing fundamentals for copper as strong, the company will continue ramping up capacity to a pre-DMS nameplate capacity of 12,000 tonnes per annum.

Chief executive Kevin van Wouw, said, "The company has made good progress over this review period in both successfully acquiring the Mowana mine and then subsequently by improving efficiencies at the mine."

"I am most excited about what Cradle Arc can achieve over the next few years and beyond, and look forward to pursuing continued growth and making further progress," added van Wouw.

As of 1100 BST, Cradle shares had lost 3.46% to 6.28p.