Last checked at 16 Aug 2016 07:00
Armadale Capital Plc / Index: AIM / Epic: ACP / Sector: Investment Company
16 August 2016
Armadale Capital Plc (‘Armadale’ or ‘the Company’)
Geological Mapping Identifies Extensive Outcropping Mineralisation at Mahenge Liandu Graphite Project, Tanzania
Armadale, the AIM quoted investment company focused on natural resource projects, is pleased to announce that geological mapping conducted at the Company’s recently acquired high grade Mahenge Liandu Graphite Project in south-east Tanzania (‘Mahenge Liandu’ or ‘the Project’) has confirmed extensive areas of graphite mineralisation. This is coincident with the conductive targets identified by the recent Electro-Magnetic (‘EM’) survey and further highlights the prospectivity of the Project. The Company has now commenced digging pits into areas of outcrop to obtain samples for initial metallurgical test work of the graphite mineralisation. Mobilising equipment, including a bulldozer to clear drilling pads, is now underway with management expecting drilling to commence in early September 2016.
Summary:
Geological mapping has now been completed at Mahenge Liandu, with numerous areas of extensive surface outcrop mapped. The mineralisation is well correlated with anomalies identified in the recently completed EM survey. Mapping covered the eastern and western zones previously identified in the EM survey. Within these zones, incremental exploration targets were shown to have extensive areas of outcrop. Outcropping mineralisation in these new areas was visually observed as similar to the primary Mahenge Liandu prospect. Work on pits designed to obtain graphite mineralisation for initial metallurgical test work has now commenced in both of the main exploration targets. Highly attractive demand fundamentals demonstrated for graphite – two binding off take agreements signed between Kibaran Resources Limited (‘Kibaran’ and ASX: KNL), which is developing the neighbouring Epanko project, with Japanese trading-house Sojitz and German multi-national conglomerate ThyssenKrupp.Exploration programme update:
Discussions with drilling companies to undertake reverse circulation and diamond drilling have now been completed, with mobilisation expected to commence once enough drill pads are prepared. The drilling programme is planned to commence in early September 2016.William Frewen, Chairman of Armadale said:
“We are pleased to confirm that mapping and pit work on site covering both the eastern and western zones has identified extensive areas of surface graphite schist outcrop. These new areas will now be included as priority targets for our drilling programme commencing in the coming weeks. Having already identified prospective targets for drilling from our recent EM survey, drill pads are now being built on site with drill rigs expected to arrive shortly.
“Rock chip sampling has highlighted high grade graphite mineralisation of up to 33.8% Total Graphite Content (‘TGC’). This supports recent drill results of 60mt @ 10.7% TGC, including 24mt @ 12.9% TGC and 5mt @ 21.5% TGC with all results near the surface. The EM Survey and mapping has increased our confidence in identifying a large resource. The primary prospect has a strike length of 2.6km at Mahenge Liandu, which remains open. A further mineralised zone identified to the west of this prospect, which has a 3.7km strike length, remains open.”
Commenting on the global demand for graphite Mr Frewen added:
“The global demand for graphite has been rapidly increasing. We are pleased to note the recent success of our neighbouring peer Kibaran signing key off-take agreements with Japanese trading-house Sojitz and German multi-national conglomerate ThyssenKrupp. The signing of these contracts validates the mining potential in Tanzania and the specific graphite region that we are working in.”
Further Information on Mahenge Liandu
The Mahenge Liandu project is located in the Ulanga District in south east Tanzania, approximately 300km south west of Morogoro and 10km from the town Mahenge.
High grade graphite mineralisation of up to 33.8% TGC has been demonstrated through analysis of rock-chip samples taken from Mahenge Liandu in June 2016. Previous drilling has confirmed high-grade mineralisation from the surface, with results including 60m @ 10.7% TGC, including 24m @ 12.9% TGC and 5m @ 21.5% TGC. The samples were taken from graphite schist outcrops over a 1.5km of strike that was mapped by the previous owner surrounding the initial discovery holes.
The area is highly prospective for graphite with Mahenge Liandu located immediately to the east of Kibaran’s Epanko project. In July 2015, Kibaran completed a bankable feasibility study, with the following key findings:
Proven and probable ore reserves of 10.9mt at 8.6% TGC; Annual EBITDA of US$33.6m for 15 years; Sales price US$1,466/t of concentrate, opex FOB Dar es Salaam $570/t; and Metallurgical results: 85.7% of distribution greater than 106 micron, carbon concentrate of 96.3% TGC.Black Rock Mining’s (`Black Rock‘ and ASX:BKT) Mahenge project is situated 1km north-west of Armadale’s Mahenge Liandu project. It has a global resource of 131mt at 7.9% TGC (including 38mt at 10.2% TGC or 16.6mt at 11.1% TGC). Furthermore, Black Rock has delineated circa 80% of its resources in eight months, demonstrating the opportunity to add significant value to the Mahenge Liandu project in a short time frame. On 22 March 2016, Black Rock announced the results of an independent scoping study with:
52,000 tpa graphite concentrate mining operation (25-year mine life); at cash costs of US$458/t; and a sales price of US$1,236/t (FOB Dar es Salaam).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.
This announcement contains inside information.
**ENDS**
| Enquiries: | ||
| 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 Jon Belliss | +44 20 7382 8300 | |
| Press Relations: St Brides Partners Ltd Charlotte Heap / Susie Geliher | +44 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. The project is located in a highly prospective region with proven coarse flake, high grade graphite resources – ASX listed Kibaran and Black Rock have both identified and are developing significant proven and valuable graphite projects immediately adjacent to Mahenge Liandu. A mineralised trend about 1.6km in strike length and up to 500m wide has been identified at the project, which remains open at depth. Armadale geologists have mapped and sampled the graphite schist, with results from seven previous samples ranging from 12.8% - 24.0% TGC. Exploration drilling completed at the project in December 2015 has further confirmed the mineral potential of the license area, with results including 10mt at 6.54% TGC, 24mt at 12.9% TGC and 5mt at 21.5% TGC. Armadale is targeting a maiden resource estimation in late 2016.
In addition, Armadale is developing of the Mpokoto Gold project in the Democratic Republic of the Congo, in which it owns an 80% interest. Mpokoto has a current Total Mineral Resource of 678,000oz gold (‘Au’) from 14.58mt @ 1.45g/t Au at a cut-off grade of 0.5g/t. The company has recently announced the results of a feasibility study for Mpokoto which demonstrated a pre-tax net present value of US$43m based upon a discount rate of 5% and a gold price of US$1,250/oz. The project is subject to four mining licenses which are valid for an initial term of 30 years from 30 September 2014.
Armadale has a portfolio other quoted investments.
More information can be found on the website www.armadalecapitalplc.com.
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