Armadale Capital Regulatory News (ACP)

25 Jun 2019 07:00

 

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

25 June 2019

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

Exceptionally High-Grade Assay Results Verify Commercialisation Plans

for the Mahenge Liandu Graphite Project

Armadale Capital plc (LON: ACP), the AIM quoted investment group focused on natural resource projects in Africa, is delighted to announce exceptionally high-grade assay results from its Mahenge Liandu Graphite Project (‘Mahenge Liandu’ or the ‘Project’) in Tanzania, which validate commercialisation plans in progression (see RNS dated 29 May 2019).

Highlights

First four of 18-hole reverse circulation (‘RC’) drill programme receivedExceptionally high-grade near surface assayed intercepts recorded7m @ 16.9% total graphite content (‘TGC’) from 31m7m @ 16.8% TGC from surface9m @ 14.8% TGC from surfaceEncouraging results are part of broader zone of high-grade mineralisation that includes 39m @ 11.2% TGC from surface, 57m @ 7.6% TGC from surface and 63m @ 8% TGC from 12mWide zones of high-grade near surface mineralisation materially above the 12.5% used in the average life of mine scoping study completed in March 2018Eight diamond drill-holes also drilled and are currently being assayedResults have favourable impact on the Project’s economics and forward commercialisation plans:Higher average grade from near surface mining in early yearsLower extraction costsPotential enhanced EBITDA marginsResults expected to have a positive outcome on the Definitive Feasibility Study (‘DFS’) on track to complete Q4 2019, aiding transition from exploration to mining phase

Nick Johansen Director of Armadale said: “Transitioning from explorer to emerging miner is now the Board’s core focus in the lead up to completion of the DFS and beyond. Consequently, we are delighted that the first four assay results from the current RC drilling programme demonstrate exceptional grades with near surface large mineralised intercepts. The immediate takeaway is two-fold: firstly, higher than average grade; and secondly, the potential for low extraction costs given the mineralisation is near surface.

“The results received to date continue to point to a potentially viable graphite mine and verify the Board’s commercialisation plans which are progressing positively. As such, we look forward to further updating the market as we accelerate our plans to commission the Mahenge Liandu Graphite Project.”

MAHENGE LIANDU GRAPHITE PROJECT, TANZANIA

Armadale’s wholly-owned Mahenge Liandu Graphite Project is 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.

Work to date at the Project has demonstrated its 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.

An 18-hole reverse circulation (‘RC’) drill programme totalling 958m is currently underway; assay from the first four drill-holes totalling 262m have been received:

HoleID	East	North	Elevation	Depth	From	To	Difference	TGC%	Grade Thickness	Including
LDRC0050	251818	9035117	593	52	0.0	39.0	39.0	11.2	39m@11.2% tgc	7m@16.9% from 31m
LDRC0051	251783	9035216	643	67	0.0	57.0	57.0	7.64	57m@7.64%	7m@16.78% from surface
LDRC0052	251744	9035287	672	79	12.0	75.0	63.0	7.99	63m@7.99%
LDRC0053	251717	9035358	686	64	22.0	31.0	9.0	14.76	9m@14.76%	9m@14.75% from surface
	251717	9035358	686	64	36.0	60.0	24.0	5.04	24m@5.04%

Additionally, eight diamond drill-holes have also been drilled and are currently being assayed.

Upon completion of the current infill drilling campaign focused on the initial mine pit, the Company expects to improve defining mineralisation, provide critical data for resource modelling and design an optimal mine.

Armadale remains on track to complete a DFS at the Project in Q4 2019. This has been based on the results of a Scoping Study completed in March 2018, which verified that the Mahenge Liandu Project could produce a coarse flake, high-purity graphite product underpinning a compelling business case to progress commercialisation plans. Based on a 400,000tpa throughput, the study highlighted the following key positive metrics:

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

**ENDS**

For further information, please visit the Company’s website www.armadalecapitalplc.com, follow Armadale on Twitter @ArmadaleCapital or contact:

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.

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