Base metals miner Cradle Arc will cooperate with the provisional judicial manager who was appointed for its 60%-owned subsidiary Leboam, in Botswana, to find solutions for the group’s financial difficulties, CEO Kevin van Wouw affirmed on Thursday.
The Botswana High Court has issued a provincial judicial management order, effective December 18, and appointed John Hinchcliffe to oversee matters.
Cradle Arc had applied for provincial liquidation of the Botswana subsidiary, while Fujax and Leboam’s 40% shareholder applied for judicial management.
The mine is facing significant working capital constraints after it could not agree with Fujax on collateral for the drawdown of the remainder of its $4-million working capital facility.
“Following from the impasse between Fujax and the secured lenders to the project, where the working capital facility agreed was not completed and which has directly led to this situation, we have commenced discussions with various existing and potential funders in order to attempt to secure a suitable financing solution for the project going forward,” said Van Wouw.
As judicial manager, Hinchcliffe has to compile a report regarding the financial position of Leboam to a meeting of creditors by no later than February 18.
Following this meeting, Leboam has until February 21 to submit a business plan to the High Court, which on February 28 will decide if the company can be discharged from provisional judicial management.