The estimated capital cost for plant and infrastructure is US$14.4 million. To fund this, Cradle Arc has signed an agreement pursuant to which the Company is working with Yantai Xinhai Machinery Co. Ltd (‘Xinhai’) and PenMin (Pty) Ltd (‘PenMin’) with respect to the proposed construction and financing of mining operations at Matala. Xinhai has agreed to arrange Vendor Financing for the Design, Build and Operate contract. This marked the first step in securing a Chinese export bank funding agreement.
At the end of May 2016, the Company received a conditional term sheet from Xiamen XGMA International Trade Company Limited (“XGMA”) confirming that agreement had been reached for the provision of risk cover and Supplier’s Finance from state owned China Export & Credit Insurance Corporation.
The Company is now focusing on completing the last leg of the financing plan, which is to reach agreement with local Zambian institutions for the provision of an on-lending facility and additional security in order to facilitate the flow of funds from China.