Armadale Capital Regulatory News (ACP)

28 Aug 2019 07:04

 

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

28 August 2019

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

High-Grade Assay Results Further Demonstrate Commercial Potential of Large Graphite Project

Armadale Capital plc (LON: ACP), the AIM quoted investment group focused on natural resource projects in Africa, is delighted to announce further high-grade assay results from its wholly owned Mahenge Liandu Graphite Project in the highly prospective Mahenge region of Tanzania (“Mahenge Liandu” or the “Project”).

The results confirm previously identified areas of extremely high-grade near surface mineralisation that can be targeted for initial mining with positive read across for lower extraction costs and enhanced EBITDA margins. As a result, the Company expects increased production at the Project based on the targeted throughput of 400,000tpa of ore currently being evaluated as part of a Definitive Feasibility Study (“DFS”).

The initial drill results from the first four holes were announced on 25 June 2019 and can be viewed through the following link: https://bit.ly/2JbaDNg.

Highlights:

High-grade near surface assayed intercepts recorded:8m @ 21.0% total graphitic carbon (“TGC”) from 13m4m @ 22.8% TGC from 36m8m @ 21.6% TGC from 6m7m @ 16.4% TGC from 22mEncouraging results are part of a broader zone of high-grade mineralisation that includes 35m @ 13.2% TGC from surface, 18m @ 13.8% TGC from 24 metres and 31m @ 11.6% TGC from surfaceWide zones of high-grade near surface mineralisation are materially above the 12.5% threshold used in the average life of mine scoping study completed in March 2018 which verified the Project could produce a coarse flake, high-purity graphite productThis infill drilling campaign, which was focused on the planned initial mine pit, has improved the definition of mineralisation and provided critical data for resource modelling and optimal mine designDrilling results impact favourably on the Project’s economics and forward commercialisation plans – higher average grade from near surface mining in early years, lower extraction costs and potential enhanced EBITDA marginsResults are expected to have a positive outcome on the DFS which is currently being undertaken

Nick Johansen Director of Armadale said: “We are delighted with the further exceptionally high-grade assay results, especially as the drill campaign was focused on the initial pit area and has provided data to allow us to define the optimal mine design. The tenor of the mineralisation in this area and the exceptionally high near surface grade is an extremely strong boost for the Project as we move along its development pathway.

“Our work continues at pace as we accelerate the transition from explorer to emerging miner. We believe recent news has demonstrated the enhanced commercial viability of the Mahenge Liandu Project which, with a high-grade JORC compliant indicated and inferred mineral resource estimate of 51.1Mt at 9.3% TGC, is already one of the largest high-grade resources in Tanzania. We look forward to providing further updates as we continue to meet significant milestones in the Project’s development.”

FURTHER INFORMATION

Summary Assay Results Table

Hole ID	Easting	Northing	Depth	Elevation	From	To	Width	Average TGC%	Including	Including
LDRC0054	251,683	9,035,432	46	702	9	35	26	8.8	11m@13.3% from 16m
LDRC0055	251,851	9,035,548	46	721	0	40	40	6.9
LDRC0056	251,876	9,035,486	37	685	0	31	31	11.6	5m @ 22.3% TGC from 3m	14m @ 12.6% TGC from 16m
LDRC0057	251,918	9,035,402	22	650	No Significant Intercepts
LDRC0058	251,946	9,035,342	46	656	0	35	35	13.2	12m@ 19.8% from 11m	8m@21.0% from 13m
LDRC0059	251,978	9,035,267	68	637	24	42	18	13.8	4m@22.8% from 36m
LDRC0060	252,012	9,035,190	56	630	0	24	24	1.2
LDRC0061	251,929	9,035,120	34	585	20	24	4	12.8
LDRC0062	251,848	9,035,036	65	546	6	15	9	20.6	8m@21.6% from 6m
					20	51	31	7.1
LDRC0063	251,511	9,035,343	40	698	0	20	20	10.7	5m @15.7% from 0
LDRC0064	251,531	9,035,282	16	677	0	10	10	10.8	4m@15.3% from 0m
LDRC0065	251,563	9,035,204	34	640	1	21	20	9	4m@13.9% from 0m
LDRC0066	251,358	9,035,177	102	659	0	7	7	12.8	4m@18.9% from 0m
					12	33	21	7.5
					81	98	17	6.9
LDRC0067	251,329	9,035,250	84	710	22	29	8	14.5	7m@16.4% from 22m
					37	56	19	7.1
					64	68	4	6.1

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 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 Mahenge Liandu 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 lifeNear surface nature of the 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 life of mine gradePre-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 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.

**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.

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