Armadale Capital Plc / Index: AIM / Epic: ACP / Sector: Investment Company
11 November 2019
Armadale Capital Plc (‘Armadale’ or ‘the Company’)
Mine Design & Project Engineer Site Visit Update
Armadale Capital plc (LON: ACP), the AIM quoted investment group focused on natural resource projects in Africa, is pleased to confirm that the mine design for the Mahenge Liandu Graphite Project (‘Mahenge Liandu’ or ‘the Project’) is now being finalised for inclusion in the Definitive Feasibility Study (“DFS”) following a site visit by the Project engineer.
- Comprehensive site visit undertaken by the Project engineer tasked with designing the graphite mine
- Mine design to be optimised to ensure high grade areas are targeted first ensuring stronger cashflow generation in the early years
- Project engineer has reviewed the site layout to garner a primary understanding of the logistics, terrain and route to market
- Meetings undertaken with mining contractors, third party suppliers and logistics operators to ensure seamless route to transport graphite concentrate to port
- Important discussions held with local communities and their leaders, who remain very positive on the Project as well as viewing the facilities available to house visiting contractors
- All assumptions for the DFS have now been stress tested and verified
Nick Johansen Director of Armadale said: “Over the past six months, significant progress has been made defining a high-grade resource, completing MOUs and progressing the commercialisation strategy. With our funding position now secure, the Board is delighted to continue progressing Armadale’s ongoing transition from explorer to emerging producer.
“The site visit by the Project engineer tasked with designing the mine is a key milestone as it signifies the concept is moving towards reality and is an important step as we finalise the Project’s DFS. We are now looking beyond the completion of the DFS to focus on the commercialisation strategy in order to deliver a high-quality graphite product to our off-take partners. As part of this process, the Board has been increasingly focused on project infrastructure and ensuring all the elements necessary to commence mining operations in a timely manner are in place.
“I would like to take this opportunity to thank our shareholders for their continued support and I look forward to providing them with further updates in respect of the Project DFS completion and commercialisation.”
The Mahenge Liandu Graphite Project, Tanzania
Armadale’s wholly-owned Mahenge Liandu Graphite Project, located in a highly prospective region in Tanzania, and has a high-grade JORC compliant inferred, indicated and measured mineral resource estimate announced October 2019 – 59.5Mt at 9.8% TGC. This includes 15.90Mt inferred at 9.75% TGC, 32.06Mt indicated at 9.58% TGC and 11.52MT measured at 10.54% TGC making it one of the largest high-grade resources in Tanzania.
Most recently, a site visit was undertaken by the Project’s engineer, who was tasked with designing the graphite mine and optimising it to ensure high grade areas are targeted first to ensure stronger cashflow generation in the early years. Accordingly, the engineer has reviewed the site layout to garner a primary understanding of the logistics, terrain and route to market. Additionally, meetings were undertaken with mining contractors, third party suppliers and logistics operators to ensure a seamless route to transport graphite concentrate to port. Key discussions have also been held with local communities and their leaders, who remain very positive on the Project, and the facilities available to house visiting contractors working on the Project have been viewed.
Previous work at the Project 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.
Currently, Armadale is completing a DFS 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 that the Project has robust economics and warrants further development. It also verified the Project could produce a coarse flake, high-purity graphite product underpinning a compelling business case to progress commercialisation plans, highlighting the following key 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.
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
Paul Johnson, Non-Executive Director (UK)
Tim Jones, Company Secretary
|+44 (0) 20 7236 1177|
Nomad and broker: FinnCap Ltd
Christopher Raggett / Simon Hicks
|+44 (0) 20 7220 0500|
Joint Broker: SI Capital Ltd
|+44 (0) 1483 413500|
Press Relations: St Brides Partners Ltd
Isabel de Salis / Beth Melluish
|+44 (0) 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 Indicated and inferred mineral resource estimate of 59.48Mt @ 9.8% 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.