Broker says buy4 May 2017 20:42
Armadale Capital (LON:ACP, 1.62p) - Speculative Buy
Armadale Capital announced yesterday test work results demonstrating purity of up to 99.99% graphitic carbon that can be achieved from its Mahenge Liandu graphite project in Tanzania. Results also indicate that purity above 99.95% can be achieved for size fractions between 106 and 500µm, which are typically used for the production of spherical graphite. These results demonstrate the project’s ability to produce high-quality graphite concentrates, which could be suitable for several commercial applications. Armadale is planning further metallurgical test work, including bulk samples to be used for marketing graphite concentrates to potential offtake partners. In addition, a 2,500m drill campaign will commence imminently to update the JORC-compliant resource of 40.9Mt grading 9.41% total graphic content (TGC) in preparation for a proposed Prefeasibility Study (PFS) later in 2017.
Our view: We are encouraged by the high-grade total graphite content of 9.41% as well as the excellent purity results in the medium size fractions. The ongoing test work continues to demonstrate that Mahenge Liandu is capable of producing high-quality graphitic concentrates suitable for a range of commercial applications. The Company is looking to capitalise on the expected growth in the graphite market driven by increasing applications particularly in the energy storage market and the Mahenge Liandu project continues to deliver favourable results. We look forward to drill results from the planned resource update and the proposed marketing of high-quality graphite concentrates to potential off taker partners. In the meantime, we maintain a Speculative Buy rating on the stock.
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