Armadale Capital Plc / Index: AIM / Epic: ACP / Sector: Investment Company
8 December 2016
Armadale Capital Plc (‘Armadale’ or ‘the Company’)
Maiden JORC Compliant Mineral
Resource Estimate of 40.9Mt @ 9.41% Total Graphitic Content
Armadale, the AIM quoted investment company focused on natural resource projects, is pleased to announce a maiden JORC compliant inferred mineral resource estimate of 40.9Mt @ 9.41% Total Graphitic Content (‘TGC’) for its 100% owned Mahenge Liandu graphite project in Tanzania (‘Mahenge Liandu’ or the ‘Project’).
- High-grade maiden JORC compliant inferred mineral resource estimate of 40.9Mt @ 9.41% TGC, which highlights the potential commercial viability of Mahenge Liandu.
At least 32Mt of this resource has an average grade of 10.47% TGC –
one of the largest high-grade resources in Tanzania; for context:
- Blackrock Mining (ASX: BKT; MCap: £25m) has 162.5Mt @ 7.8% TGC
- Kibaran Resources (ASX: KNL; MCap: £24m) 23.3Mt @ 9.4% TGC
- Magnis Resources (ASX: MNS; MCap: £197m) 174Mt @ 5.4% TGC
- Volt Resources (ASX: VRC; MCap: £39m) 446Mt @ 5% TGC.
- 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.
- The initial phase of metallurgical test-work, which will indicate the quality of the product, is expected to be finalised in Q1 2017.
- Graphite flake concentrate samples will be analysed by an independent European laboratory to determine its suitability for spherical graphite (used in lithium-ion battery manufacture) and expandable graphite (used in flammable retardant building materials) which will assist with marketing to end-users – results from this work are expected to be available in Q1 2017.
- The estimate has been calculated based on the analysis of samples collected using reverse circulation (‘RC’) drilling.
- Additional drilling, intended to test extensions to the current resource and to upgrade the resource classification, is scheduled for H1 2017.
William Frewen, Chairman of Armadale said, “Declaring a maiden JORC resource estimate of this quantum and grade is a significant achievement, which underpins the potential commercial and strategic value of this emerging project. When factoring in a low strip ratio and high-grade coarse flakes, we are optimistic that significant shareholder value can be created via expediting development to tap into burgeoning demand for natural graphite, fuelled by lithium-ion battery producers and other markets.
“The Mahenge Liandu project is located in one of the world’s most prolific high grade coarse flake graphite regions, surrounded by advanced projects such as Blackrock Mining's Mahenge Project and Kibaran Resources’ Epanko Project. It should come as no surprise that our expectations remain high for future exploration and development activities at Mahenge Liandu as we remain focused on maintaining our ambitious development schedule and progressing towards production as soon as practicable."
Operating Review and Marketing Strategy Update
Closing out 2016 with an inferred JORC compliant mineral resource estimate of 40.9Mt @ 9.41% TGC highlights the potential commercial viability of Mahenge Liandu.
In the context of progressing to commence mining operations, the results to date demonstrate that Mahenge Liandu has one contiguous ore body, with a substantial quantity of high-grade coarse graphite flake near the surface, which the Board believe should be relatively cost efficient to extract.
Furthermore, a recent review of infrastructure and logistical requirements to support mining operations confirmed:
- Grid power supply is within 5km of the Project, supplied from an established hydroelectric scheme;
- Ground water is plentiful;
- The Project is approximately 80km by road to a central rail hub at Ifakara then a further 320km via the TAZARA Railway to the deep-sea port at Dar es Salaam; and
- Labour and materials is available within 10km at the Mahenge township.
The next key phases for de-risking the Project will be the release of inaugural metallurgical test-work in Q1 2017 to determine the purity and flake size distribution of the graphite as well as commencing the Pre-Feasibility Study. In addition, it is expected that a diamond drilling programme will be undertaken during H1 2017 to test extensions to the current resource and to upgrade the resource classification.
With the graphite concentrate from Mahenge Liandu expected to be attractive to prospective customers, the next step is to obtain independent verification that it can be used to produce spherical and expandable graphite. Consequently, management has sent bulk samples to an independent European laboratory to run tests, which should be released during Q1 2017.
Assuming results of these tests are positive, the Company will be in a strong position to actively target prospective customers, with a marketing effort to include sending customers samples for testing. Gaining traction with customers will require a highly-focused strategy, so Armadale’s marketing team will initially focus on Europe before targeting global regions. Armadale's ultimate target is to secure MOUs that will ultimately convert into binding offtake agreements or potential strategic alliances with larger groups that bundle end-user demand and access to project finance.
Capacity expansion by lithium-ion battery producers in China appears to be increasing due to accelerating demand from electric vehicles and power storage equipment. Some of the giga-factories currently being built will start partially coming on line in 2017, which should provide tangible evidence of the growing demand for upstream inputs (including natural graphite) to make lithium-ion batteries.
Competent Person statement
The information in this announcement that relates to exploration results is based on information compiled by Mr Matt Bull, a competent person, who is a Member of the Australian Institute of Geoscientists. Mr Bull has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a competent person as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr Bull consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.
The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.
Armadale Capital Plc
Charles Zorab, Company Secretary
|+44 20 7233 1462|
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
Charlotte Page / Susie Geliher
|+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 proven coarse flake, high grade graphite.
Other assets Armadale has an interest in include the Mpokoto Gold project in the DRC and a portfolio of quoted investments.
More information can be found on the website www.armadalecapitalplc.com