Armadale Capital Plc / Index: AIM / Epic: ACP / Sector: Investment Company
26 June 2017
Armadale Capital Plc (‘Armadale’ or ‘the Company’)
Armadale, the AIM quoted investment company focused on natural resource projects in Africa, is holding its annual general meeting ('AGM') at 11.00 am today at 55 Gower Street, London, WC1E 6HQ. At the meeting Nick Johansen, Director of Armadale, will make the following statement:
“2016 was a pivotal year for Armadale, which saw the Company reassess its evolving investment portfolio and ultimately saw the business shift towards a new project and commodity – graphite. The rationale behind this move was two-fold: firstly, the directors became aware of the high growth market for graphite and the demonstrable opportunities for junior explorers and developers as evidenced by several companies listed on the ASX; secondly that our ability to raise sufficient finance to bring our second tier investment, being the gold project in the Democratic Republic of Congo, was stymied both by the relative size of the project and the often uncertain political climate in the country.
“With this in mind, our attention turned towards the strategic commodity of graphite – and we became aware of a project in the well-known resource destination of Tanzania, which hosts one of the world’s most prolific high grade coarse flake graphite regions. Flanked by exploration and development projects with high grade graphite mineralisation, the board was hopeful that the Mahenge Liandu Project, which Armadale acquired in July 2016, would yield similar results. Suffice to say, the Board has not been disappointed.
“Since initiating exploration activities in July 2016, and drilling in September 2016, consistently encouraging results have been returned which have confirmed significant high-grade material at Mahenge Liandu. The result of this initial drilling programme was the declaration of a maiden JORC compliant inferred mineral resource estimate of 40.9Mt @ 9.41% Total Graphitic Carbon (‘TGC’). Importantly, at least 32Mt of this resource has an average grade of 10.47% TGC making it one of the largest high-grade resources in Tanzania. Delivering a resource of this size and grade within six months of acquiring the project highlights both the potential commercial viability of Mahenge Liandu but also our commitment to proving up this high-quality project in as short timeframe as possible.
“In parallel with the continuing drilling underway at Mahenge Liandu, the team has also been progressing test work of material from the Project to demonstrate the quality of graphite to potential offtake partners. We have now confirmed results of up to 99.99% graphitic carbon for flake size between from 300µm to 500µm, and purity of above 99.95% for size fractions between 106 µm and 500µm, which are typically used for the production of spherical graphite. These exceptional results underpin the Project’s ability to produce high quality graphite concentrates, which should be suitable for a number of applications, positioning us strongly for commercial negotiations with offtake partners moving forward.
“Looking now to our secondary investment, the Mpokoto Gold Project in DRC (‘Mpokoto’). We were delighted to report in December 2016 that our partners, Kisenge Mining Pty Ltd, formerly known as African Mining Services, had exercised its option to form a joint venture with us to develop and operate Mpokoto. Despite the challenges we faced trying to secure the necessary finance from the traditional channels open to Armadale to develop Mpokoto, as referred to above, we believe that this project has value left to contribute to our overall investment portfolio. With an established resource of 678,000oz of gold (‘Au’) at 1.45 g/t Au and a completed DFS based on a production rate of circa 25,000oz annually over an initial four-year mine life for the first phase of mining, together with a defined route to production, we are confident that the project offers significant potential and we are pleased that KMP agrees and is able to fund onward development as set out in the announcement of 5 December 2016.
“Over the past six months, KMP has been focussed on completing a gap analysis of the project data to determine the required steps to bring Mpokoto into production as soon as possible. In addition, KMP has reassessed the mine plan and capital cost estimates with a view to significantly reducing the capex requirements, and this may include adopting a staged production plan. KMP has also conducted an Independent review of the Resource estimate of the deposit which confirmed the existing Resource statement produced by CSA. The work currently being undertaken by KMP will enable Phase II of the joint venture to continue ahead of Mpokoto commencing commercial production.
“Moving away from our operations and on to corporate matters, shareholders will be aware that as our commodity and country focus has shifted, so too has our board evolved to reflect Armadale’s emphasis on graphite and Tanzania. We are now actively seeking a new UK-based executive to bolster Armadale’s corporate presence. Interviews with several experienced individuals have taken place and the directors hope to be able to update shareholders in the near future.
“I would like to take this opportunity to thank our shareholders for their commitment and support over the past year and reiterate my optimism for the future of Armadale, with Mahenge Liandu at its core.”
For further information please visit www.armadalecapitalplc.com or contact:
Armadale Capital Plc
|+44 20 7236 1177|
Nomad and broker: finnCap Ltd
Christopher Raggett / Simon Hicks
|+44 20 7220 0500|
Joint Broker: Beaufort Securities Limited
|+44 20 7382 8300|
Press Relations: St Brides Partners Ltd
Susie Geliher / Charlotte Page
|+44 20 7236 1177|
Armadale Capital Plc is focused on investing in and developing a portfolio of investments, targeting the natural resources and/or infrastructure sectors in Africa. The Company, led by a team with operational experience and a strong track record in Africa, has a strategy of identifying high growth businesses where it can take an active role in their advancement.
The Company owns the Mahenge Liandu graphite project in south-east Tanzania, which is now its main focus. The Project is located in a highly prospective region with a high-grade JORC compliant inferred mineral resource estimate of 40.9Mt @ 9.41% TGC. At least 32Mt of this resource has an average grade of 10.47% TGC, one of the largest high-grade resources in Tanzania, and work to date has demonstrated Mahenge Liandu’s potential as a commercially viable deposit with significant tonnage, high-grade coarse flake and near surface mineralisation (implying a low strip ratio) contained within one contiguous ore body.
Other assets Armadale has an interest in include the Mpokoto Gold project in the Democratic Republic of Congo and a portfolio of quoted investments.