A FOCUSED STRATEGY TO INCREASE PRODUCTION CORPORATE PRESENTATION - - PowerPoint PPT Presentation

CORPORATE PRESENTATION September 2018

A FOCUSED STRATEGY TO INCREASE PRODUCTION

DISCLAIMER

The information contained in this presentation (this "presentation") has been prepared by Cradle Arc Plc ("the Company") as at the date of this presentation and is subject to updating, completion, revision, further verification and amendment without notice. This presentation is for general information only and is the property of the Company. Making this presentation available in no circumstances whatsoever implies the existence of a commitment or contract by or with the Company, or any of its affiliated entities, or any of its or their respective subsidiaries, directors, officers, representatives, employees, advisers or agents for any purpose. This presentation has not been approved by the United Kingdom Listing Authority under the Prospectus Rules (made under Part VI of the Financial Services and Markets Act 2000 ("FSMA")) or otherwise, or by the London Stock Exchange plc. This presentation does not constitute or form part of any offer for sale or solicitation of any offer to buy or subscribe for any securities nor shall it or any part of it form the basis of or be relied on in connection with, or act as any inducement to enter into, any contract or commitment whatsoever. No reliance may be placed for any purpose whatsoever on the information or opinions contained in this presentation or on the completeness, accuracy or fairness thereof. No undertaking, representation, warranty or other assurance, express or implied, is made or given by or on behalf of the Company or its directors,

• fficers, partners, employees, agents or advisers or any other person as to the accuracy or completeness of the information or opinions contained

in this presentation and no responsibility or liability is accepted by any of them for any such information or opinions or for any errors, omissions, misstatements, negligence or otherwise for any other communication written or otherwise. In addition, in issuing this presentation, the Company undertakes no obligation to update or to correct any inaccuracies which may become apparent in this presentation. Notwithstanding the aforesaid, nothing in this paragraph shall exclude liability for any undertaking, representation, warranty or other assurance made fraudulently. The statements contained in this presentation may include "forward looking statements" that express expectations of future events or results. All statements based on future expectations rather than on historical facts are forward looking statements that involve a number of risks and uncertainties and the Company cannot give assurance that such statements will prove to be correct. Any forward looking statements made by or

• n behalf of the Company speak only as of the date they are made. The Company gives no undertaking to update forward looking statements to

reflect any changes in expectations, events, conditions or circumstances upon which such statements are made. The presentation should not be considered a recommendation by the Company or any of its affiliated entities, or any of its or their respective subsidiaries, directors, officers, representatives, employees, advisers or agents in connection with any purchase of or subscription for securities of the Company. This presentation is not directed to, or intended for distribution to or use by, any person or entity that is a citizen or resident or located in any locality, state, country or other jurisdiction where such distribution or use would be contrary to law or regulation or which would require any registration or licensing within such jurisdiction. In particular, this presentation should not be copied or distributed by recipients and should not be distributed by any means including electronic transmission, to persons with addresses in the United States of America, Canada, Australia, South Africa or Japan their possessions or territories or to any citizens thereof, or to any corporation, partnership or such entity created or organised under the laws thereof. Any such distribution contrary to the above could result in a violation of the laws of such countries.

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Mowana Copper Mine in Botswana Production ramping up to 12,000tpa from current Stage 1 operations and then 21,000tpa LOM following low capex DMS expansion project

2

PRODUCING COPPER IN BOTSWANA

CRA INTEREST 60% RESOURCE Measured and Indicated – 54.7Mt at 1.17% Cu for 640 kt tonnes Cu Inferred – 20.3Mt @ 1.08% Cu for 220 kt Cu RESERVE Proved & Probable - 31.8Mt at 1.17% Cu for 371 kt Cu PRODUCTION STATUS Full time production and ramping up to nameplate capacity LIFE OF MINE 14 years production of approximately 21,000tpa Cu PEAK PRODUCTION 27,000 tonnes in year 3 NPV (8%) US$272.8 million*

*Quoted in real terms at an 8% discount rate and a copper price of US$3.00/lb Cu

STRATEGY

▪ Deliver cash generation from Stage 1 production ▪ Revised operating model treating oxide resources as waste ▪ Reposition Mowana as a larger scale, lower cost producer through DMS expansion ▪ Develop wider asset base on a case-by-case basis to realise value

A NEW APPROACH TO MOWANA

3

Using pre-concentration, mining and processing controls to simplify the project’s

• perations driving profit even in a low commodity price environment

HISTORY 2008 Commissioned at a cost in excess of US$170 million by African Copper 2008-2015 Plant operated processing an average of 775,406 tpa at an average grade of 1.72% copper ore mainly from the Thakadu deposit 2015 Mine liquidated as commercially unviable at depressed copper prices 2017 Acquisition out of liquidation by Cradle Arc with a new business plan while copper prices

• approx. $2.50/lb

FUTURE

TREAT OXIDES AS WASTE

• The majority of the oxides have already been ‘stripped’ out
• Focus only on transitional and sulphide ores where recovery is

in line with the mining reserve plan

PLANT IMPROVEMENTS UNDERWAY AND MORE PLANNED

• Plant improvements incorporated into the re-commissioning

process

• Substantial front-end upgrade to pre-concentrate through

Dense Media Separation (DMS) increases throughput to an average 2.6Mtpa

• Re-positions Mowana as a larger scale, lower cost mine

IMPROVED DEBT POSITION

• Cradle Arc acquired 60% of the Mowana Mine with just $44m of

debt compared with the $110m under the previous owners

MOWANA MINE MINERAL RESOURCES AND ORE RESERVES

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MOWANA MINERAL RESOURCES Measured Indicated Measured + Indicated Inferred Cut-Off (% Cu) Tonnes (kt) Cu (%) Cu Metal (kt) Tonnes (kt) Cu (%) Cu Metal (kt) Tonnes (kt) Cu (%) Cu Metal (kt) Tonnes (kt) Cu (%) Cu Metal (kt) Oxide

0.72 572 1.58 9 980 1.45 14 1,552 1.48 23 22 1.51 0.3

Transition

0.37 1,262 1.31 17 1,884 1.17 22 3,146 1.24 39 217 1.09 2

Supergene

0.34 1,553 1.41 22 2,022 1.33 27 3,575 1.37 49 395 1.16 5

Fresh

0.29 11,689 1.3 151 34,760 1.09 378 46,449 1.14 529 19,673 1.08 213

Total

15,076 1.32 199 39,646 1.11 441 54,722 1.17 640 20,307 1.08 220

MOWANA ORE RESERVES

Category Ore (kt) Copper Grade (% Cu) Contained Copper Metal (kt Cu) Proved 12,435 1.27 157.7 Probable 19,374 1.10 213.1 Total 31,809 1.17 370.8 Mineral Resources not forming part of the Ore Reserve Inferred 3,692 0.93 34.5

*Prepared in accordance with the Guidelines of the JORC Code (2012). Resources reported inclusive of reserves

Mowana has a large resource base of 75Mt at 1.15% Cu for 860kt Cu

PLANT OVERVIEW

A conventional crushing, screening, milling and flotation circuit

• Crushing and screening circuit consists of a

primary jaw crusher (fed from the ROM pad), and secondary and tertiary cone crushers presenting a -16mm feed size to the mill

• Single F L Smith rubber lined 160tph ball mill
• Conventional

dual

• xide/sulphide

flotation circuit

• Concentrate drying circuit, including a Larox

filter

• Concentrate bagging station
• Tailings dewatering equipment

Plant now operating and ramping up to nameplate 1.2Mtpa capacity 5

DMS Upgrade expected to double capacity to 2.6 Mtpa

PROGRESS AT MOWANA SINCE IPO

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Jan 2018 ▪ Test works confirms suitability

• f

DMS to Mowana Copper Mine ▪ Preparatory work for DMS underway April 2018 ▪ Maiden JORC (2012) mineral resource estimate announced ▪ Accelerated Development Plan implemented to fast track access to deeper ores, with better recoveries and grade ▪ Delivery to site of mining fleet of 25 vehicles ▪ US$10m debt funding secured May 2018 ▪ Maiden Ore Reserve Estimate announced and Life of Mine extended ▪ Transitional / sulphide

• res

accessed with recoveries in line with plan June 2018 ▪ Project level operational cash flow break even achieved September 2018 ▪ Renewal of two Prospecting Licences to the north of Mowana

ACTIONS

Accessing transitional and sulphide ores in the North Pit Recoveries in line with operating plan in the process plant

MINING UPDATE

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• Ramp

up of mining commenced mid-April following announcement

• f accelerated development plan
• Two mining units operating full time

by end May 2018, accessing transitional ores as expected below 960 level

• Third mining unit brought on-line in

June 2018 and fourth to be on-line by end of September 2018 to be at target capacity

• Approx. 1.1 million tonnes of ore

and waste were have been mined by the end of Q2

• Mining

rates approximately doubling in the third quarter and expected to be at full capacity of ~3Mt per quarter by Q4.

PROCESSING UPDATE

• Processing optimisation is ongoing

as the Company continues to ramp- up to steady state production

• Some

sporadic interruptions

• ccurred

during July and August 2018

• Recoveries average of 51% for Q2

and Q3 reflecting predominantly transitional ores

• Recoveries
• f

up to 76% still expected to be achieved in high supergene ores

• Recoveries expected to reach 85%

as more sulphide dominant

• res

accessed

• Approximately

4,000 tonnes contained copper to be produced in H2 2018

• H2 production to be weighted to Q4

as ore type processed moves from transitional to supergene

LIFE OF MINE PLAN & VALUATION MAIDEN ORE RESERVE

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Discount Rate US$m

6% 8% 10% 12%

US$/lb Cu

2.70 191.1 170.9 154.1 140.2 2.80 229.3 204.8 184.6 167.7 2.90 267.4 238.8 215.1 195.1 3.00 305.5 272.8 245.5 222.6 3.10 343.6 306.7 276.0 250.1 3.20 380.7 339.7 305.6 276.9 3.30 418.2 373.2 335.6 303.9 3.40 455.7 406.6 365.6 331.0 3.50 489.6 436.7 392.5 355.3 0.0% 0.2% 0.4% 0.6% 0.8% 1.0% 1.2% 1.4% 1.6% 1.8% 2.0% 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Year RoM Ore (Mt) Plant Feed (Mt) Feed Grade (% Cu)

• Maiden Ore Reserve Estimate by Wardell Armstrong

International: 31.8Mt @ 1.17% Cu for 370,800t Cu, effective May 2018

• Measured & Indicated Resources of 55Mt @ 1.17% Cu –

increased 37%

• Life of mine extended to 14 years, with average LOM

production of approximately 21,000tpa Cu, peaking at 27,000tpa Cu in year 3

• Inferred Resources of 3.7Mt @ 0.93% Cu for 34,500

tonnes treated as waste in LOM schedule

• Ore Reserve Estimate gives Mowana an after tax NPV of

US$272.8 million1

• Average LOM cash costs (C1) of US$4,099 per tonne Cu

(US$1.86 per pound) 2

• Average LOM all-in sustaining costs of US$5,038 per

tonne Cu (US$2.29 per pound) 2

• 1. Quoted in real terms at an 8% discount rate and a copper price of US$3.00/lb Cu
• 2. Cash operating costs (C1) per pound of payable copper includes cash operating costs,

including treatment and refining charges ("TC/RC"), freight and distribution costs net of by- product credits. All-In Sustaining Costs (AISC) of payable copper include cash operating costs plus royalties and agency fees, expenditures on rehabilitation, capitalised stripping costs, exploration and geology costs, corporate costs and sustaining capital expenditures.

UNDERSTANDING DMS

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Dense Media Separator Grit/Slimes

Crusher Product Mill Feed

Feed to DMS Sinks Floats to tails

82% 18% 40% Yield 89% Cu Recovery 60% ~2.0x uplift in Mill Feed Grade

• Dense

Media Separation is an established mineral pre-concentration method widely used in base metals and diamond processing operations

• DMS

installation is forecast to approximately double copper through the existing mill

• Crusher product is pre-screened - grit

and slimes are delivered directly to the mill

• DMS separates minerals of different

densities using gravity in a solution with heavier mineralised

• re

separated from barren or low grade waste

• The upgraded DMS feed is then

transferred to the Mill, effectively increasing the processed grade for the same volume of ore feed

• By reducing production unit costs,

Mowana can bring lower grade tonnes into the mine plan, generating mining efficiencies

DMS Flowsheet

2.6 Mtpa of ore @ 1.17% Cu for ~21,000 tonnes of copper per year

Example DMS Unit

LOW CAPEX DMS PROGRAMME DMS IMPLEMENTATION

DMS upgrade costings US$M SGS TurnKey Solution Contract 11.4 SGS Contract Variation Cost 2.3 Tailings Handling 0.1 Site Remedial Action for Upgrade 1.7 Wellfield Upgrade 2.5 Total Direct Costs 18.0 Environmental Consultant EIA/EMP Update Proposed Cost 0.3 Owner's Fixed Costs 0.8 Total Indirect Costs 1.1 Contingency 0.9 TOTAL PROJECT COSTS 20.0

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• Two 150tph DMS units are to be purchased,

installed and commissioned by SGS Bateman

• n a turnkey basis
• Upgrades will also be required to the tailings

storage facility, the tailings underflow pumping, and the existing borehole network

• The project will also include a review of the

Environmental Social Impact Assessment ("ESIA") and the mine's Environmental Management Plan.

• Construction of the DMS project is expected to

take 11 months (SGS Bateman)

NEAR MINE EXPLORATION

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▪ Renewal of Prospecting Licences PL33/2005 and PL180/2008 granted and valid for a period of two years ▪ Regional geophysics by previous owners shows the shear zone extends through both tenements ▪ Potential combined strike length increased to 36km from the current 5km within the Mowana mining licence area ▪ Subject to financing, the Company's proposed work plan includes: ▪ Further geophysics to extend through the northernmost PL180/2008 permit area ▪ Followed by a maiden drilling programme with the

• bjective of proving mineralisation within the known

structure ▪ To date, the northernmost drill holes within the Mowana licence area, at the Mowana North Extension, returned high grade intercepts, namely: ▪ Hole MWN007 - 50m @ 2.11%TCu from 667m depth (including 2m @ 9.13%TCu) ▪ Hole MWN025 - 19.28m @ 2.94%TCu from 272.38m ▪ Hole DPH1, drilled in 2011, and located just north of the Company's current mining activity at the Mowana open pit successfully proved that mineralisation extended down to 900m

MAKALA COPPER PROSPECT

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▪ Located approx. 70km from Mowana, being the underground extension of the previously mined Thakadu open pit ▪ Represents an additional potential ore source for Mowana at a rate of 1Mtpa ▪ Makala contains inferred resource of 11.5 Mt at 1.46% Cu for 168kt Cu + significant silver credits* ▪ Thakadu contains indicated resources of 2.268 Mt at 1.11% Cu and inferred resources of 5.38 Mt at 0.63% Cu ▪ Deposit hosted within the same broad metasedimentary package as Thakadu ▪ Three zones of copper mineralisation identified; main Makala Ore Zone, Hanging wall Makala Ore Zone and Logolo Ore zone ▪ At Makala there is generally less variation in the thickness of the mineralised zones than at Thakadu, with mineralisation ranging from 30cm up to 12m at its thickest point ▪ Mining proposed to utilise a retreat open stoping method from an adit driven from the base of the Thakadu open pit ▪ A feasibility study has been commissioned

* Note: using a cut-off grade of 0.25% Cu

SUMMARY

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▪ Mowana is a producing copper asset in Botswana; a low risk, mining friendly jurisdiction, in a favourable copper market environment ▪ Production ramping up to 12,000tpa Cu, and will reach an average of 21,000tpa Cu over a 14 year mine life following low capex Dense Media Separation (DMS) expansion project ▪ Estimated Net Present Value of US$272.8 million at an 8% discount rate and a copper price of US$3.00/lb Cu ▪ Cradle Arc is building on over US$170 million of investment by previous owners ▪ Rapidly delivering on strategy to re-position Mowana as a profitable, larger scale, lower cost copper mine: ✓ Debt reduced and restricted on acquisition ✓ JORC 2012 resource base increased to 55Mt M&I @ 1.17% Cu + 20Mt Inferred @ 1.08% Cu ✓ Maiden open pit Ore Reserve of 31.8Mt @ 1.17% Cu for 370,800t Cu - reported within 4 months of listing ✓ Accelerated development plan implemented April 2018 – mining rates to double in Q3 and hit full capacity in Q4 ✓ Recoveries being achieved to plan and set to continue to improve ✓ 4,000 tonnes of copper to be produced in H2 2018 ✓ Cash generation to improve throughout H2 2018 ▪ Mowana positioned for Stage 2 production expansion, leveraging management team’s has first-hand experience of installing and operating DMS units ▪ Near mine prospective assets with potential add to production profile

APPENDICES

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BOARD AND MANAGEMENT

ROY PITCHFORD NON-EXECUTIVE CHAIRMAN

• Roy has in excess of 25 years’ senior management and executive experience in Southern Africa in the mining industry
• Previously of Chief Executive Officer or Managing Director for Vast Resources Plc, Central African Gold PLC, African

Minerals Limited, Cluff Resources Zimbabwe Limited, Delta Gold Zimbabwe (Pvt) Limited, African Platinum plc and Zimbabwe Platinum Mines Ltd.

• Zimbabwean citizen who was educated in Bulawayo, where he subsequently qualified as a Chartered Accountant. He

is a past President of The Chamber of Mines of Zimbabwe KEVIN VAN WOUW CEO

• Kevin is a metallurgist with over 30 years’ experience in the mining industry and is currently the Non-Exec Chairman of

PenMin and a Fellow of the SAIMM

• Prior to PenMin, Kevin was the Projects Director at LionOre Mining International Limited where he was directly

responsible for the commercialisation of its Activox™ technology, as well as conceptualszing and implementing the Commercial DMS application for Tati Nickel Mining Company (Pty) Ltd, in Botswana MARK JONES DIRECTOR OF BUSINESS DEVELOPMENT

• Graduate from the Camborne School of Mines and holding an MBA
• Mark is a mining engineer with over 35 years’ experience in mining production, 25 of which have been spent in Africa,

with specific expertise in gold and base metals in Africa, Europe and the FSU

• Founded and CEO of African Mining and Exploration plc (subsequently Savannah Resources plc) that sold the Malian

assets to Cradle Arc ROGER WILLIAMS NON-EXECUTIVE DIRECTOR

• Roger is a Chartered Accountant with over 20 years’ international experience in mining finance
• In 1997 he joined Randgold Resources, working on its London Stock Exchange listing and later its secondary listing on

NASDAQ, and was appointed Group Finance Director in 2002

• Roger went on to become Chief Financial Officer of JSE-listed AECI Limited
• Directorships and interim executive appointments with various mining and mining services companies

OSCAR KIRKOVITS NON-EXECUTIVE DIRECTOR

• Oscar began his career at Knight Vinke Asset Management in Monaco, an activist hedge fun. Becoming a private

investor, his focus shifted in 2017 to small cap companies, mainly operating in the resource sector

• Oscar holds a Bachelor’s degree in Business, Economics and Social Sciences from the Vienna University of

Economics and Business, as well as a Master’s degree in Finance from the International University of Monaco MICHAEL GOLDING NON-EXECUTIVE DIRECTOR

• Michael has over 20 years’ of corporate and project finance experience during which time he has advised on in excess
• f 50 transactions in the mining industry.
• Previously the South African head of Corporate Finance for Billiton Plc, following which he acted as a director at HSBC

Investment Services Africa Limited, Actis Plc and Imara Holdings Ltd

• Currently Non-Executive Chairman to CCP 12J Fund Limited and has run a boutique corporate and project advisory

business for over 10 years

• Member of the South African Institute of Chartered Accountants and holds the degree of Master of Business

Leadership from the University of South Africa.

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CAPITAL STRUCTURE

Financing ✓ Pre-IPO: £3.25 million secured October 2017 ✓ IPO: £2.4 million raised December 2017/ January 2018 ✓ Issued US$10 million loan note ✓ $4m raised for capital structure simplification August 2018

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Market AIM Ticker CRA.L Share price 3.80p Market Cap* £10.5 million Shares in issue 276,391,999

Raised ~£6 million in pre-IPO and IPO raisings (before expenses) and raised US$10m debt financing post- IPO to accelerate mining at Mowana

Major Shareholders

Kevin van Wouw - 41.79% City Financial - 13.33% Hadron Capital - 8.26%

*as at 17 September 2018

FUNDING

Cradle Arc acquired a 60% interest in the Mowana mine with US$44 million of debt compared to US$110 million under previous owners

Stated borrowings are at the Leboam level so

• nly

60% attributable to Cradle Arc:

• $21

million structured as an unsecured long-term shareholder loan from ZCI on favourable terms

• $19.9 million secured debt to ZCI

and liquidator

• $10 million loan notes raised in

April 2018 to accelerate mining and retire offtake linked debt – raised at Cradle Arc level and largely on-lent to Leboam 17

100% 60% 100% 40%

CRADLE ARC INVESTMENTS (PTY) LIMITED (CAI) ZCI LIMITED (JSE: ZCI) LEBOAM HOLDINGS (PTY) LIMITED CRADLE ARC PLC (CRA) MOWANA COPPER MINE

Cradle Arc has receives a management fee equal to 1.5%

• f revenue from Mowana

CORPORATE STRUCTURE

GOLD EXPLORATION

Gold Exploration Joint Ventures in West Africa allow Cradle Arc to retain exposure to these potentially significant greenfield projects, whilst its joint venture partners fund and manage the exploration work programmes

• Over 475,000 oz Au already defined

within the exploration portfolio

• The right ‘addresses’ for significant

gold discoveries

• Strong joint venture partners with track

records of making gold discoveries 18

MALI

100% owned project gold exploration project on main transcurrent shear zone (“MTZ”) in western Mali

• 137 km2 exploration permit covering regional significant structure
• Exploration funded and managed by Indiana Resources from

September 2018

• Multiple high-grade discoveries
• Significant data set compiled by Randgold now being utilised by

Indiana Joint Venture with Ashanti Gold Corp. (TSX-V: AGZ) Sale of this project to Ashanti has been agreed for C$1 million (received) and 1.5% NSR (retained)

• 64 km2 exploration permit adjacent to Kossanto West
• Ashanti funding and managing all exploration to PFS
• 247,000 oz Au JORC resource already established

Joint Venture with Cora Gold Ltd (LON: CORA). Cora owned 34% by Hummingbird Resources Ltd (LON: HUM)

• 250 km2 exploration permit in southern Mali
• Fully funded to BFS
• Significant historical exploration work completed and targets

delineated

MATALA & DUNROBIN GOLD PROJECTS

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Asset Overview CRA INTEREST 100% LOCATION Zambia RESOURCE 761koz at 2.3g/t Au STATUS Optioned for JV and potential sale Option Agreement – July 2018

• Non-exclusive option granted to Singa to acquire Luiri (100% owned subsidiary holding the Matala and Dunrobin licences) for total cash

consideration of US$2.5 million

• In addition, Cradle Arc will receive a royalty of 1.5% of gross revenue up to a maximum aggregate amount of the Net Present Value of

US$2.5 million, discounted at 8%.

• Singa also granted an non-exclusive option to form a joint venture for the operation of Matala and Dunrobin. In the event the JV Option is

exercised, any such joint venture terminates upon the commencement of commercial gold production. In the event that Singa elects to exercise the JV option, Cradle Arc has the right to require Singa to exercise the Share Option

CONTACTS

STRAND HANSON: NOMAD JAMES DANCE E: JAMESDANCE@STRANDHANSON.CO.UK T: +44 (0) 20 7409 3494 WWW.STRANDHANSON.CO.UK TAVISTOCK COMMUNICATIONS LIMITED: PR CHARLES VIVIAN / GARETH TREDWAY E: CHARLES.VIVIAN@TAVISTOCK.CO.UK / GARETH.TREDWAY@TAVISTOCK.CO.UK T: : +44 (0)20 7920 3150 WWW.TAVISTOCK.CO.UK

CRADLE ARC PLC KEVIN VAN WOUW: CEO T: +27 (0) 11 380 7505 WWW.CRADLEARC.COM

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CORPORATE PRESENTATION June 2018

A FOCUSED STRATEGY TO INCREASE PRODUCTION