A FOCUSED STRATEGY TO INCREASE PRODUCTION CORPORATE PRESENTATION September 2018
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, officers, 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 on 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. 1
PRODUCING COPPER IN BOTSWANA 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 CRA INTEREST 60% STRATEGY ▪ Deliver cash generation from Stage 1 production Measured and Indicated – 54.7Mt ▪ Revised operating model treating oxide resources as at 1.17% Cu for 640 kt tonnes Cu RESOURCE Inferred – 20.3Mt @ 1.08% Cu for waste 220 kt Cu ▪ Reposition Mowana as a larger scale, lower cost producer through DMS expansion Proved & Probable - 31.8Mt at ▪ Develop wider asset base on a case-by-case basis to RESERVE 1.17% Cu for 371 kt Cu realise value PRODUCTION Full time production and ramping STATUS up to nameplate capacity 14 years production of LIFE OF MINE approximately 21,000tpa Cu PEAK 27,000 tonnes in year 3 PRODUCTION 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 2
A NEW APPROACH TO MOWANA Using pre- concentration, mining and processing controls to simplify the project’s operations driving profit even in a low commodity price environment FUTURE HISTORY TREAT OXIDES AS WASTE 2008 Commissioned at a cost in excess of US$170 million by African Copper • 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 2008-2015 Plant operated processing an average of 775,406 tpa at an average grade of PLANT IMPROVEMENTS UNDERWAY AND MORE 1.72% copper ore mainly from the Thakadu PLANNED deposit • Plant improvements incorporated into the re-commissioning process 2015 Mine liquidated as commercially unviable • Substantial front-end upgrade to pre-concentrate through Dense Media Separation (DMS) increases throughput to an at depressed copper prices average 2.6Mtpa • Re-positions Mowana as a larger scale, lower cost mine 2017 Acquisition out of liquidation by Cradle Arc IMPROVED DEBT POSITION with a new business plan while copper prices approx. $2.50/lb • Cradle Arc acquired 60% of the Mowana Mine with just $44m of debt compared with the $110m under the previous owners 3
MOWANA MINE MINERAL RESOURCES AND ORE RESERVES Mowana has a large resource base of 75Mt at 1.15% Cu for 860kt Cu MOWANA MINERAL RESOURCES Measured Indicated Measured + Indicated Inferred Cu Cu Cu Cu Cut-Off Tonnes Cu Tonnes Cu Tonnes Cu Tonnes Cu Metal Metal Metal Metal (% Cu) (kt) (%) (kt) (%) (kt) (%) (kt) (%) (kt) (kt) (kt) (kt) 0.72 572 1.58 9 980 1.45 14 1,552 1.48 23 22 1.51 0.3 Oxide 0.37 1,262 1.31 17 1,884 1.17 22 3,146 1.24 39 217 1.09 2 Transition 0.34 1,553 1.41 22 2,022 1.33 27 3,575 1.37 49 395 1.16 5 Supergene 0.29 11,689 1.3 151 34,760 1.09 378 46,449 1.14 529 19,673 1.08 213 Fresh 15,076 1.32 199 39,646 1.11 441 54,722 1.17 640 20,307 1.08 220 Total MOWANA ORE RESERVES Contained Copper Grade Category Ore (kt) Copper Metal (% Cu) (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 4 *Prepared in accordance with the Guidelines of the JORC Code (2012). Resources reported inclusive of reserves
PLANT OVERVIEW Plant now operating and ramping up to nameplate 1.2Mtpa capacity 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 oxide/sulphide flotation circuit • Concentrate drying circuit, including a Larox filter • Concentrate bagging station • Tailings dewatering equipment DMS Upgrade expected to double capacity to 2.6 Mtpa 5
PROGRESS AT MOWANA SINCE IPO ACTIONS Jan 2018 ▪ Test works confirms suitability of 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 Accessing transitional and sulphide ores in the North Pit ▪ 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 ores 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 Recoveries in line with operating plan in the process plant 6
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