Cra­dle Arc to sell Zam­bia gold as­sets to Singa Hold­ings

Zambian Business Times - - BUSINESS REVIEW -

Africa-fo­cused base and pre­cious met­als ex­plo­ration and pro­duc­tion com­pany Cra­dle Arc has en­tered into an op­tion agree­ment to sell its Matala and Dun­robin gold as­sets, in Zam­bia, to Singa Hold­ings Zam­bia. The as­sets are cur­rently held by Cra­dle Arc sub­sidiary Luiri Gold Mines. Cra­dle Arc has granted Singa an ex­clu­sive op­tion to ini­tially form a joint ven­ture for the op­er­a­tion of the Matala and Dun­robin gold as­sets. This op­tion will ex­pire on June 30, un­less ex­tended. Cra­dle Arc has fur­ther granted Singa an ex­clu­sive op­tion to ac­quire the en­tire is­sued share cap­i­tal of Luiri for $2.5-mil­lion. The share op­tion ex­pires on July 1; how­ever, Singa may ex­tend the share op­tion pe­riod for up to two months by pay­ing Cra­dle Arc $USD50, 000 for each month that the op­tion pe­riod is ex­tended. Singa will use the share op­tion pe­riod to com­plete its for­mal le­gal and tech­ni­cal due dili­gence. On re­ceipt of the cash con­sid­er­a­tion, Cra­dle Arc will trans­fer to Singa 75% of the shares, with the re­main­ing 25% of the shares be­ing trans­ferred to Singa upon the start of com­mer­cial pro­duc­tion of gold, at which point the pro­posed JV will ter­mi­nate. Once Singa has ac­quired 100% of Luiri, a roy­alty of up to a max­i­mum amount of the net present value of $2.5-mil­lion dis­counted at 8% yearly is payable by Singa Cra­dle Arc. The roy­alty will be cal­cu­lated as 1.5% of the gross rev­enue gen­er­ated from any min­ing op­er­a­tions on the HQ-8074-LML min­ing li­cence, which hosts the Matala and Dun­robin gold de­posits. “The de­vel­op­ment of our Zam­bian gold as­sets has long been an im­por­tant goal for the com­pany. We are, how­ever, ex­tremely mind­ful of the po­ten­tial di­lu­tion that rais­ing eq­uity funds for the de­vel­op­ment of Matala could have on ex­ist­ing share­hold­ers at the com­pany’s cur­rent share price and we, there­fore, con­sider that this part­ner­ship with Singa rep­re­sents the best path to­wards po­ten­tial pro­duc­tion in the near to mid-term,” said Cra­dle Arc CEO Kevin van Wouw.

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