Cradle Arc (formerly Alecto Minerals) has been suspended for several months now. We expect the company to return to the market in the first half of January and will be releasing a full coverage note on the stock at this point.
At the time of suspension the company was refocusing around the acquisition of the Mowana copper mine in Botswana and which has now completed. We see Botswana as one of the most stable and investment worthy regions on the African continent and view Cradle Arcs COO Mark Jones in high regard. Combined with the fact that the Mowana mine project has had over $155m spent on it and it is actually producing we see the anticipated re-list level as providing copious amounts of upside for new investors.
We will update more thoroughly on this investment opportunity post the re-list and our full coverage note release but flag this imminent return to the market to our followers as one of our top picks for 2018.
So it's 10 January for the relist with a broker forecast of 50p - 80p but with the copper price moving ahead a higher opening price could be on the cards. Will be looking to top up at anything below £1.
Cradle Arc PLC (formerly Alecto) will soon have completed the purchase of the Mowana copper mine in Botswana. The mine has had >$155m spent on it, roughly 25% in drilling and soft costs, 75% on mining, surface infrastructure and the plant. Via a cash and shares transaction, Cradle Arc PLC will own 60% of Mowana with 40% owned by ZCI, the mines historical lender.
Cradle Arc took over operations in March, the first production blast was April 29th, since when tonnage has ramped up to a current rate of 60kt per month and circa 550 tonnes of copper metal per month. The mine is now fully funded and will ramp-up to an annual rate of 12,000 tonnes of copper by December, then expand to 23,000 tonnes by 4Q18.
The Mowana Mine has an initial 11-year mine plan from two open pits. However, the 30m wide orebody is also open down dip and along strike and has excellent additional open pit and underground potential. We expect the transaction to complete and for Cradle Arc to return to AIM this month (November). We then anticipate positive operational updates as the mine ramp-up progresses and operating cashflow turns positive. - 08/11/2017
Alecto Minerals plc (AIM: ALO), the African-focused gold and copper exploration and development company, is pleased to announce that production is now ongoing on a full-time basis at the Mowana Copper Mine in Botswana (Mowana or the Project) following completion of the first blast on 29 April 2017 and a successful trial period, which saw the Company produce saleable concentrate up to 28% copper ("Cu"). To date, over 1,900 tonnes of copper concentrate has been produced, which is being sold to Alectos offtake partner Fujax Minerals and Energy Limited ("Fujax"). To view a video of the operation, please use the following link: http://www.alectominerals.com/investors/media.html .
The Company continues to advance the acquisition of the Project by way of a reverse takeover and is pleased to report that the Competent Persons Report (CPR) on Alectos African assets and the producing Mowana mine has now been completed by Wardell Armstrong International, representing an important milestone towards the publication of the admission document required to enable Alecto to recommence trading on AIM.
Alecto Minerals plc / EPIC: ALO / Market: AIM / Sector: Mining
17 January 2017
Alecto Minerals plc (Alecto or the Company)
Issue of Convertible Loan Notes to raise £1 million (gross)
Alecto Minerals plc (AIM: ALO), the Africa-focused gold and copper exploration and development company, is pleased to announce that it has raised £1 million (before expenses) through the issue of convertible loan notes (Notes). Alecto will utilise these funds to recommence operations at the Mowana Copper Mine in Botswana (Mowana) and to fund certain transaction expenses in relation to the completion of the reverse takeover process associated with the proposed acquisition of Cradle Arc Investments (Proprietary) Limited (Cradle), which owns Mowana, further details of which were announced by the Company on 21 December 2016 and as more particularly described below.
The Notes have been subscribed to by clients of Beaufort Securities Limited, the Companys broker (Noteholders). The principal terms of the Notes are as follows:
The Notes are repayable by the Company on 16 July 2017.
Interest at the rate of 20% will be paid to the Noteholders and will be satisfied by the issue of new ordinary shares in the capital of the Company (Ordinary Shares) at a price of 0.06625 pence per Ordinary Share, being the mid-market price at which the Ordinary Shares were suspended from trading on AIM. This will result in the issue of 301,886,792 Ordinary Shares to the Noteholders (the Interest Shares).
The Noteholders have the right, but not the obligation, to convert part of, or the whole of, the principal amount outstanding under the Notes into new Ordinary Shares. During the first ten trading days following the date of re-admission of the Companys Ordinary Shares to trading on AIM following publication of an admission document (Re-Admission), the Noteholders can convert the principal amount of the Notes at a conversion price equal to the lower of (a) the closing price per Ordinary Share on the trading day immediately after Re-Admission and (b) 80% of the closing mid-price per Ordinary Share as quoted on AIM on the trading day immediately prior to the date of receipt by the Company of the conversion notice in question (the Floating Price). Following that ten trading day period the conversion price will be the Floating Price.
The Notes will not be converted to the extent that doing so would trigger a mandatory offer for the Company pursuant to Rule 9 of the City Code on Takeovers and Mergers.
The terms of the Notes include customary terms of default pursuant to which the Noteholders may demand immediate repayment including in the event that the proposed acquisition of Cradle is not completed by 7 July 2017.
The net funds raised from the issue of the Notes will be used to provide a loan of up to US$1m to Cradle, which it will use to recommence operations at Mowana. Fujax Minerals and Energy Limited (Fujax), the South African minerals and energy trading company providing off-take financing to Mowana, will match Alectos loan to Cradle, thereby providing Mowana with funding of up to, in aggregate, US$2m in the short-term with the aim of bringing the mine back in to production in Q1 2017. The balance of the funds raised will be used for general working capital purposes, including the transaction expenses relating to the Companys proposed acquisition of Cradle through a reverse takeover process.
The Companys broker, Beaufort Securities Ltd, will be paid a fee of £50,000 to be satisfied by the issue of 75,046,904 Ordinary Shares (the Fee Shares)at the price of 0.06625 pence per Ordinary Share.
Application will be made to the London Stock Exchange plc for the Interest Shares and the Fee Shares to be admitted to trading on AIM (Admission) and it is expected that the shares will be admitted to AIM on 24 January 2017 and that trading will commence when the current suspension is lifted. Following Admission, Alecto wi
It is not possible to guess what the sp is likely to do on return but it seems clear to me that we now have two major and knowledged investors owning some 60pc so there will be a determination to grow ALO by further acqusitions. The sector looks set to do well during the coming year and ALO could be one of the highlights.
Beaufort think they are worth 0.31p and if they can get positive news on their projects then why not 1p plus. The Chairman has a chunk of stock and seems to have contacts and also wants to grow by acquisition.
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