LONDON (Alliance News) - Cradle Arc PLC said Wednesday the contained copper produced at the company's 60%-owned Mowana copper mine in Botswana was lower than forecast, as Chairman Toby Howell resigns from his position.
Shares in Cradle Arc were down 17% at 3.50 pence each.
The mine experienced issues in July and August, resulting in production being "significantly" below original expectations. According to the company, the project is not currently breaking even in terms of operational cash flow.
Cradle Arc is revising its contained copper production guidance for the second half to about 4,000 tonnes. Prior to the planned upgrades, the miner expected the Mowana mine to produce about 12,000 tonnes per annum.
In July, the mine was adversely impacted for about three weeks due breakdowns and the "under-performance" of a drilling contractor. An additional drilling contractor was hired in August, and a third mining unit supplied, but it too suffered mechanical issues.
In the second quarter and third quarter to date, copper recovery has been 51% - due to predominantly transitional ore being mined, along with the plant breakdowns.
The company still expect to recover up to 76% of ore from the high supergene ores being accessed, with recoveries ultimately expected to reach a high of 85% by the end of the year.
Cradle Arc said it is in advanced negotiations about obtaining the financing necessary to carry out the planned dense media separation upgrades at the Mowana mine.
The miner also said Chairman Toby Howell has told the company he intends to resign and pursue other business interests "at the appropriate time".
The company also announced the proposed appointment of Roy Pitchford as non-executive chairman and Michael Golding as non-executive director.
Pitchford was previously the chief executive officer or director of Vast Resources PLC, Central African Gold PLC, African Minerals Ltd, Cluff Resources Zimbabwe Ltd. He was also previously the president of the Chamber of Mines of Zimbabwe.
Golding was previously the South African head of corporate finance for BHP Billiton Ltd, followed by director at HSBC Investment Services Africa Ltd.
Chief Executive Officer Kevin van Wouw said: "We are very happy to be securing the considerable mining experience of both Roy and Michael, in their respective future roles as non-executive chairman and non-executive director.
"The depth and range of experience brought into the company will bring new understanding of the challenges being experienced as Cradle Arc matures into an established copper producer."
Vast Res (VAST)