Strategic Financing

LONDON--()-- 

Armadale Capital Plc / Index: AIM / Epic: ACP / Sector: Investment Company

16 September 2019

Armadale Capital Plc (‘Armadale’ or ‘the Company’)

Strategic Financing

Armadale Capital plc (LON:ACP) the AIM quoted investment company focused on natural resource projects in Africa, is pleased to announce a strategic financing raising £500,000 for the Company at 1.80p per share.

Significantly this strategic financing is intended to provide the Company with sufficient working capital to progress its 100% owned Mahenge Liandu project (“Mahenge Liandu” or the “Project”) through completion of the Definitive Feasibility Study (“DFS”) and to bring the Project to the point of project level construction financing.

Highlights:

  • Armadale has completed a strategic financing raising £500,000 through a placing and subscription of 27,777,778 new ordinary shares (“Financing Shares") at a price of 1.8p per Financing Share
  • Each Financing Share has an attaching warrant ("Financing Warrant”) to subscribe for a further new ordinary share at a price of 3.0p with a life to expiry of 3 years from admission of the Financing Shares
  • Importantly, the additional working capital will be applied principally to the completion of the Project DFS and for follow on and associated activities to bring Mahenge Liandu to the point of project level construction financing
  • Project level financing discussions in respect of the cost of Project construction are in progress with third parties
  • Further updates to follow in respect of activities in relation to the DFS and commercial discussions in respect of the Project

Nick Johansen, Director of Armadale said: “We are delighted to have completed this strategic financing at a premium to the market price and a 64% premium to the last financing undertaken by the Company in March 2019. We are thankful to all current shareholders, and those who invested in the strategic financing, for their support and engagement with the Company.

“The Company is now moving at pace to complete the Mahenge Liandu DFS and associated work streams and as previously stated we are focusing more definitively on our commercialisation plans, especially off-take and project level finance agreements, to ensure the transition from explorer to emerging producer continues to gain momentum.

“Further announcements are expected in the near future across various project related activities.”

Strategic Financing – Further Information

Armadale Capital has completed a strategic financing raising £500,000 through the placing and subscription of 27,777,778 new ordinary shares at a price of 1.8p per share.

The strategic financing was undertaken with new and existing investors to provide working capital to be applied principally to the completion of the Definitive Feasibility Study currently underway for Company’s Mahenge Liandu Graphite Project in Tanzania and associated work streams to bring the Project to the commencement of construction phase.

Further information with regard to participation by senior management and the Company’s largest individual shareholder, is provided below.

Each Financing Share has an attaching Financing Warrant to subscribe for a further new ordinary share at a price of 3.0p with a life to expiry of 3 years from the admission of the placing share, resulting in the issue of 27,777,778 Financing Warrants.

Should all Financing Warrants be exercised a further £833,333 of working capital would be generated for the Company.

Director and PDMR Dealing

Matt Bull has converted £13,340 of fees into new ordinary shares on the same terms as the strategic financing for 741,111 Financing Shares and 741,111 Financing Warrants. In addition, Matt Bull has subscribed a further £16,660 to the strategic financing for 925,556 Financing Shares and 925,556 Financing Warrants.

Kabunga Holdings Pty Limited, a connected party to Asimwe Kabunga, (see section below: Related Party Dealing) has has converted £14,000 of fees into new ordinary shares on the same terms as the strategic financing for 777,777 Financing Shares and 777,777 Financing Warrants. In addition, Kabunga Holdings Pty Limited has subscribed £86,000 to the strategic financing for 4,777,777 Financing Shares and 4,777,777 Financing Warrants.

Related Party Transaction

Kabunga Holdings Pty Ltd is a substantial shareholder in the Company. Accordingly, the subscription by Kabunga Holdings Pty Ltd for 5,555,554 Financing Shares and 5,555,554 Financing Warrants constitutes a related party transaction for the purposes of Rule 13 of the AIM Rules for Companies. The Directors of the Company, being Steve Mahede, Nicholas Johansen and Paul Johnson, consider having consulted with the Company’s nominated adviser, finnCap, that the terms of Kabunga Holdings Pty Ltd’s participation in the strategic financing as outlined above are fair and reasonable insofar as the Company’s shareholders are concerned.

Following admission of the Financing Shares the relevant holdings of the directors, PDMRs and related parties in the Company will be as follows:

Name

Current number of Ordinary Shares held

% of existing number of Ordinary Shares

Number of Financing Shares subscribed for

Number of Ordinary Shares held post-Admission

% of issued share capital as enlarged by the Financing

Nicholas Johansen

2,012,122

0.54%

0

2,012,122

0.50%

Paul Johnson

2,622,727

0.70%

0

2,622,727

0.65%

Matt Bull

31,536,125

8.40%

1,666,667

33,202,792

8.24%

Kabunga Holdings Pty Ltd

49,060,417

13.14%

5,555,554

54,615,971

13.55%

Steve Mahede

1,750,000

0.47%

0

1,750,000

0.43%

Admission and Total Voting Rights

The Placing is subject, inter alia, to admission of the Financing Shares to trading on AIM (‘Admission’), which is expected to occur on or around 30 September 2019. Application has been made to the London Stock Exchange for the Financing Shares to be admitted to trading on AIM. The Financing Shares will, when issued, rank pari passu in all respects with the Company's existing Ordinary Shares.

Following Admission, the Company therefore will have 403,109,482 Ordinary Shares in issue. The Company has no shares in treasury, therefore the figure of 403,109,482 should be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change of their interest in, the share capital of the Company under the FCA's Disclosure and Transparency Rules.

The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.

Mahenge Liandu Graphite Project, Tanzania

Armadale Capital’s wholly-owned Mahenge Liandu Graphite Project is located in a highly prospective region, with a high-grade JORC compliant indicated and inferred mineral resource estimate announced February 2018 – 51.1Mt at 9.3% TGC. This includes 38.7Mt Indicted at 9.3% and 12.4Mt at 9.1% TGC, making it one of the largest high-grade resources in Tanzania.

The work to date has demonstrated the Project’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.

Currently, Armadale Capital is completing a Definitive Feasibility Study based on the results of a Scoping Study that was completed in March 2018. The study was based on a throughput of 400,000tpa over a 32-year mine life and showed the project has robust economics and warrants further development.

The Scoping Study verified the Mahenge Liandu project could produce a coarse flake, high-purity graphite product underpinning a compelling business case to progress commercialisation plans.

The Scoping Study, based on a 400,000tpa throughput, highlighted the following key positive metrics:

  • Producing an average of 49,000tpa of high-quality graphite products for a 32-year mine life;
  • The near surface nature of the deposit produced a low 1:1 strip ratio for the life of the mine;
  • The Project has a low operating cost of US$408/t, based on an average 12.5% TGC life of mine grade;
  • The Project has a pre-tax IRR of 122% and NPV of US$349m, with a low development capex of US$35m; and
  • The maximum draw-down during the construction of the project is US$34.9m and the after-tax payback period is 1.2 years.

There remains significant scope to further improve returns, with staged expansions as the current mine plan is based on circa 25% of the total resource.

**ENDS**

Enquiries:

 

 

Armadale Capital Plc

Paul Johnson, Non-Executive Director (UK)

Tim Jones, Company Secretary

 

+44 (0) 20 7236 1177

Nomad and broker: FinnCap Ltd

Christopher Raggett / Max Bullen-Smith

+44 (0) 20 7220 0500

Joint Broker: SI Capital Ltd

Nick Emerson

+44 (0) 1483 413500

Press Relations: St Brides Partners Ltd

Isabel de Salis / Juliet Earl

+44 (0) 20 7236 1177

 

Notes

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 Indicated and inferred mineral resource estimate of 51.1Mt @ 9.3% TGC, making it 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.

More information can be found on the website www.armadalecapitalplc.com.

Details for any Person Discharging Managerial Responsibilities ("PDMR") / persons closely associated.

1.

Details of the person discharging managerial responsibilities / person closely associated

a)

Name

Matt Bull

2.

Reason for the Notification

a)

Position/status

Technical Director

b)

Initial notification/Amendment

Initial notification

3.

Details of the issuer, emission allowance market participant, auction platform, auctioneer or auction monitor

a)

Name

Armadale Capital plc

b)

LEI

213800495EK876JETD10

4.

Details of the transaction(s): section to be repeated for (i) each type of instrument; (ii) each type of transaction; (iii) each date; and (iv) each place where transactions have been conducted

a)

Description of the Financial instrument, type of instrument

Ordinary Shares

Identification code

GB00BYMSY631

b)

Nature of the transaction

Subscription for Ordinary Shares

c)

Price(s) and volume(s)

Price(s)       Volume(s)
1.8p            1,666,667

d)

Aggregated information:

Aggregated volume

Price

n/a

e)

Date of the transaction

16 September 2019

f)

Place of the transaction

London Stock Exchange, AIM Market (XLON)

a)

Description of the Financial instrument, type of instrument

Warrants over Ordinary Shares

Identification code

GB00BYMSY631

b)

Nature of the transaction

Warrants over Ordinary Shares

c)

Price(s) and volume(s)

Price(s)     Volume(s)
3p              1,666,667

d)

Aggregated information:

· Aggregated volume

· Price

n/a

e)

Date of the transaction

16 September 2019

f)

Place of the transaction

London Stock Exchange, AIM Market (XLON)

 

Short Name: Armadale Capital Plc
Category Code: MSCU
Sequence Number: 675954
Time of Receipt (offset from UTC): 20190916T133112+0100

Contacts

Armadale Capital Plc

Contacts

Armadale Capital Plc