Africa-focused gold mining company Alecto Minerals PLC says it expects to issue an admission document for the acquisition of Cradle Arc Investments Ltd by the end of June.
The acquisition of Cradle Arc Investments (Pty) Limited, which owns Mowana Copper Mine in Botswana through its subsidiary Leboam Holdings Limited, constitutes a reverse take-over under the AIM Rules for Companies. Accordingly, the Acquisition requires Alecto to publish an admission document that is conditional, on shareholder approval.
According to the company’s website, for over the past six months, the Alecto has conducted extensive technical, financial and legal due diligence on Cradle Arc, Leboam and Mowana, the results of which will be reflected in the admission document as appropriate. The due diligence phase is nearly at an end and the Company expects to commence marketing an equity fundraise shortly in order to publish the document.
The Mowana mine returned to production in March 2017 and is projected to ramp up to 100 000 tonnes of ore processed this month with 3 286 tonnes of copper concentrate produced. Working
Capital in the ramp up phase has been provided by Alecto and Fujax Minerals and Energy Limited, Leboam’s off-take partner as the Alecto website stated.
Meanwhile, Alecto is said to have risen, in aggregate, ┬ú1.8 million in 2017 to date through the issue of convertible loan notes. The majority of this funding has been lent to Leboam. The company has continued to develop its gold asset portfolio, in particular Zambia, but has focused on minimising corporate costs in the run up to completing the Acquisition. Subsequent to the issue of the further convertible loan notes, announced on June 7, 2017, and after making further loan payments to Leboam, the Company currently has cash balances of approximately ┬ú140 000, which the directors believe are sufficient to cover expected corporate costs through to completion of the Acquisition on the current anticipated timetable.
However, “in the event that the Acquisition is delayed or does not complete, the Company would need to raise additional funds in July 2017 in order to continue as a going concern in light of its current status as an exploration and development business without any income generating production assets.
“Shareholders should note, however, that the directors have a high degree of confidence that the Acquisition will complete and will be a success, subject to completion of the requisite fundraising and shareholder approval,” Alliance News website cited.