Last checked at 20 Jun 2016 11:30
Armadale Capital Plc
(‘Armadale’ or ‘the Company’)
High Grade Graphite Mineralisation Confirmed at Liandu Project, Tanzania
Armadale, the AIM quoted investment company focused on natural resources projects, is pleased to announce that high grade graphite mineralisation of up to 33.8% Total Graphite Content (‘TGC’) has been demonstrated through analysis of rock chip samples taken from the Mahenge Liandu Graphite Project in south east Tanzania (‘Liandu Project’ or ‘the Project’), which Armadale is in the process of acquiring (for more information relating to the proposed acquisition see the Company’s announcement of 2 June 2016).
Armadale has now largely completed its due diligence in relation to the Project and anticipates entering into a binding agreement to complete the acquisition of Graphite Advancement Tanzania Pty Ltd, the owner of the Liandu Project, shortly.
The new results collected by Armadale are in addition to the initial high-grade discovery. Previous drilling confirmed high-grade mineralisation from surface 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.
New Samples
Independent consultants, Newport Mining Services, undertook a rock chip sampling exercise on behalf of the Company. Check sampling of the rock chips generally confirmed visual estimates of TGC in the graphitic schists, which is considered to be a strong indication of assayed grade mineralisation. The majority of the samples revealed regular mineralisation as previously interpreted (Table 1).
| Location | Lat (WGS84) | Lon (WGS84) | Sample ID | TGC (%) | Comments | ||||||
| WP0007 | -8.738782 | 36.731469 | MG001 | 5.71 | Highly weathered, Mineralised graphitic schist | ||||||
| WP0014 | -8.734944 | 36.734034 | MG003 | 16.05 | Highly weathered and mineralised graphitic schist | ||||||
| WP025 | -8.725244 | 36.736916 | MG004 | 1.22 | Mod-slightly weathered graphitic schist (10%) | ||||||
| WP029 | -8.724693 | 36.738097 | MG005 | 19.75 | Mod-slightly weathered graphitic schist (15-20%) | ||||||
| WP032 | -8.725566 | 36.738982 | MG006 | 5.26 | Mod-slightly weathered graphitic schist (10%) | ||||||
| WP033 | -8.725761 | 36.739529 | MG007 | 33.8 | High grade graphitic schist (20%) | ||||||
| WP036 | -8.72637 | 36.73951 | MG008 | 18.25 | Mod-high grade graphitic schist (15-20%) | ||||||
| WP039 | -8.72702 | 36.74013 | MG009 | 2.25 | High grade graphitic schist (20%) |
Table 1 – rock chip assay results and descriptions
Drill Hole Samples
Four samples were taken from within mineralised intercepts in the three existing drill holes. Samples of 1kg were weighed out from course reject samples (~3-4kg), which have been kept as a record. Results confirm the tenor of mineralisation in each of the samples (Table 2).
| Hole ID | From | To | Original % TGC | Check % TGC | Variance | ||||||
| LDRC001 | 36 | 37 | 3.03 | 3.58 | 18% | ||||||
| LDRC002 | 6 | 7 | 7.98 | 7.88 | -1% | ||||||
| LDRC003 | 18 | 19 | 13.35 | 15.4 | 15% | ||||||
| LDRC003 | 33 | 34 | 10.6 | 10.85 | 2% |
Table 2 – drill hole samples
Peter Marks, Chairman of Armadale said, “The Liandu Project represents a compelling opportunity for Armadale to get exposure to the burgeoning graphite market, with modest near-term capital expenditure and limited risk. These samples further demonstrate the prospectivity of the Project.
“The Liandu Project is contiguous to Kibaran Resources’ Epanko Project, which has Proven and Probable Ore Reserves of 10.9Mt at 8.6% TGC. Kilbaran hold an exclusive off take agreement with ThyssenKrupp AG, a European multinational conglomerate. The Project is also in close proximity to Black Rock Mining’s Mahenge Project, which has a global resource of 131Mt at 7.9% TGC. The Liandu Project is in a premier graphite bearing region with world-class graphite projects neighbouring it, and these rock chip samples are what we hope to be the first step in us delivering a similarly exciting graphite project.
“In parallel with the development of the Liandu Project, Armadale continues to progress the funding of the Mpokoto Project. These discussions are ongoing with A-MCS, whom are continuing to review the Definitive Feasibility Study. In addition, management continue to review ways to improve the economics of the Project, including assessing alternative options for the processing plant that have the ability to reduce the overall capital requirement and reduce the time to production. Armadale anticipates being able to update shareholders shortly on progress.”
Global demand for spherical graphite
The recently published Benchmark Mineral Intelligence (5 June 2016) believes that there is a major paradigm shift occurring at a micro level in the spherical graphite market. Currently nearly all natural spherical graphite is produced in China, where production has expanded over the last year. Increasing demand has seen prices of uncoated spherical graphite increase over recent months. Whilst Chinese production of spherical graphite is increasing, it is anticipated that new sources of production will be needed to service emerging customers such as Tesla and other lithium-ion battery producers. Armadale, through the acquisition of the Liandu Project, is seeking benefit from this macro dynamic, and the anticipated growth in demand for natural spherical graphite, by becoming a supplier of spherical graphite to the lithium-ion battery sector.
Further Information on the Liandu Project
The Liandu Project is located in the Ulanga District in south east Tanzania approximately 300km south west of Morogoro, and 10km from the town Mahenge. The area is highly prospective for graphite with the Mahenge properties located immediately to the east of Kibaran Resources (ASX:KLN) (‘Kibaran’) Epanko Project where Kibaran completed a bankable feasibility study (‘BFS’) in July 2015, 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 Revenue Price US$1,466/t of concentrate, opex FOB Dar es Salaam $570/t Metallurgical Results: 85.7% of distribution > than 106 micron, carbon conc. of 96.3% TGCBlack Rock Mining (ASX:BKT) (‘Black Rock’) Mahenge Project is situated only 1km north-west of the Liandu Project and has a global resource of 131Mt at 7.9% TGC (including 38Mt at 10.2% TGC or 16.6 Mt at 11.1% TGC). Black Rock has delineated approximately 80% of their resources in eight months demonstrating the opportunity to add significant value to the 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 Peter Sheehan (Principal Consultant for Newport Mining Services), a Competent Person, who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Sheehan 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 Sheehan consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.
**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.
Armadale is focused on the development 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 678,000 oz gold (‘Au’) from 14.58 million tonnes (‘Mt’) @ 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 Licences which are valid for an initial term of 30 years from 30 September 2014.
The Company also has a heads of terms agreement to acquire 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 Resources Ltd (ASX:KNL) and Black Rock Mining Limited (ASX:BKT) have both identified and are developing significant proven and valuable graphite projects immediately adjacent to 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% Total Graphite Content (‘TGC’). Exploration drilling completed at the project in December 2015 has also further confirmed the mineral potential of licence area, with results including 10m at 6.54% TGC, 24m at 12.9% TGC and 5m at 21.5% TGC. Armadale is targeting a Maiden Resource estimation in late 2016.
Armadale also currently holds approximately a 30% interest in Mine Restoration Investments Ltd, a South African listed company, as well as a number of other quoted investments.
More information can be found on the website www.armadalecapitalplc.com.
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