Last checked at 19 Feb 2019 07:00
Armadale Capital Plc / Index: AIM / Epic: ACP / Sector: Investment Company
19 February 2019
Armadale Capital Plc (‘Armadale’ or ‘the Company’)
MOU Signed for Mahenge Liandu Graphite Project
Armadale, the AIM quoted investment company focused on natural resource projects in Africa, is pleased to announce it has signed a Memorandum of Understanding (‘MOU’) for a proposed offtake agreement with the Matrass Group, a China based graphite mining and processing company, for high quality graphite products produced at the Company’s Mahenge Liandu Graphite Project in Tanzania (‘Mahenge Liandu’ or the ‘Project’). The Company is also pleased to provide an update on the Feasibility Study and the Environmental and Social Impact Study (‘ESIA’) underway at the Project.
Overview
MOU signed for the proposed offtake of 30,000tpa of graphite concentrate produced at Mahenge Liandu for an initial five-year term at a price to be agreed based on the Chinese benchmark for the quality of the graphite produced, representing over 60% of average target annual production Test-work programme aimed to progress the MOU to a binding agreement is planned to start before the end of Q1 2019 Discussions regarding the remaining 19,000tpa of production ongoing with a number of potential customers Feasibility study drilling completed with further site activities expected to recommence in the coming weeks following the end of the Tanzanian wet season ESIA now completed, with the valuation study returning lower than planned relocation costs further enhancing the robust economics of the Project indicated in the Scoping StudyNick Johansen, Director of Armadale said, “In order to expedite our development objectives at Mahenge Liandu, we have been simultaneously pushing our commercial activities and operational work streams over the past six months with the intention of securing offtake agreements and finalising the various permitting items.
“I am delighted to report that our commercial efforts have been rewarded with this offtake MOU for 60% of our average target annual production with the Matrass Group. Demand for high quality graphite products, such as ours, have been highlighted through other offtake agreements, including ASX listed Black Rock Mining Ltd and the binding offtake for 205,000tpa from its project, which is proximal to Mahenge Liandu. This speaks volumes for the growing market demand for graphite from the region, which boasts some of the highest purity graphite concentrates globally and reinforces our confidence that binding offtake agreements will be secured for our entire 49,000tpa forecast production.
“As recent activities have focused on securing offtake agreements and mine permitting, both of which are making positive progress, we look forward to recommencing activities for the Feasibility Study and we look forward to updating the market further in this regard.”
The Matrass Group
Armadale has secured a MOU for 30,000tpa over a five-year period with the Matrass Group; a China based graphite mining and processing company. The Matrass Group is focused on graphite mine development, graphite downstream processing, graphene preparation and application and the supply of advanced building materials.
Feasibility Study Update
After completing the drilling required for the feasibility study, site activities for the feasibility study had slowed down over the Tanzanian wet season. The field programme is expected to recommence in the coming weeks.
Permitting
The Environmental and Social Impact Study has now been completed. A final report for the work by specialist consultant Enviromine has been completed and is expected to be submitted to the National Environmental Management Committee for validation and initiation of environmental permit approval.
The valuation study returned a lower than planned relocation cost for villages living in the proposed mine lease of less than US$1,000,000. This was a result of a smaller than planned area and a lower than expected population density.
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 Tim Jones, Company Secretary | +44 20 7236 1177 | |
| Nomad and broker: finnCap Ltd Christopher Raggett / Max Bullen-Smith | +44 20 7220 0500 | |
| Joint Broker: SVS Securities Tom Curran / Ben Tadd | +44 20 3700 0093 | |
| Press Relations: St Brides Partners Ltd Susie Geliher / Juliet Earl | +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, which is now its main focus. The Project is located in a highly prospective region with a high-grade JORC compliant inferred mineral resource estimate of 51.1Mt @ 9.3% TGC. Marking the project 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.
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