Last checked at 14 Jan 2015 07:00
14 January 2015
Armadale Capital Plc (‘Armadale’ or ‘the Company’)
Mpokoto Project Update
Armadale, the AIM quoted investment company focused on natural resources projects in Africa, is pleased to provide a positive update on its Mpokoto Gold Project (‘Mpokoto’ or the ‘Project’) in the Katanga Province of the Democratic Republic of Congo and outline its development plans for 2015 as it targets commercial production in H1 2016.
Overview
Drilling programme for Q1 2015 now being finalised with the intention of upgrading the current Total Mineral Indicated and Inferred Resource of 678,000oz gold (‘Au’) which itself represents a 78% increase from 380,000oz Au resource when Project was acquired in November 2013 Definitive Feasibility Study to be published in Q1 2015 – anticipated to confirm the robust fundamentals demonstrated in October 2014 Expanded Scoping Study which estimated a post-tax net present value (‘NPV’) of US$55.3m based upon a discount rate of 8% and a gold price of US$1,250/oz. The Feasibility Study, which will be conducted by Bara Consulting and CSA Global, is expected to lead to the declaration of a maiden Mineral Reserve. The group remains committed to ensuring that all-in sustaining costs of less than $700/oz continued to be achieved. Metallurgical testwork to be conducted in 2015 with the objective of further enhancing the low cost gravity separation process targeted for Mpokoto which has demonstrated excellent recoveries of 84% available from transitional and fresh ore. Following the recent round of drilling focused on the near surface material testwork has commenced to verify the previous testwork as well as further confirm the design of the initial plant. Project construction targeted to commence in H2 2015, subject to project financing – well financed to plan for the construction phase following US$2.73 million flexible funding agreement with Bergen Global Opportunity Fund, LP. The Company has commenced discussions with a number of groups concerning certain aspects of the project development including earthmoving contractors, equipment suppliers as well as other service providers within Southern Africa and the DRC. At the same time the group has begun the process of sourcing the requisite human resource the Project will require to develop. Mining Licences secured to support project development – granted four Mining Licences in November 2014 – valid for an initial term of 30 years from 30 September 2014. The Project has strong support at local, regional and state levels and the group will continue to strengthen these relationships as it enters construction phase.Justin Lewis, Director of Armadale, said, “When we acquired Mpokoto 14 months ago we set out an ambitious development schedule targeting commercial production in the near term to translate the mineralised potential of Mpokoto into tangible shareholder value. This has resulted in the completion of a number of major value enhancing milestones which have defined the Project as a robust gold development project with attractive economic fundamentals and a NPV of US$55.3m based upon a discount rate of 8% and a gold price of US$1,250/oz. As part of this effort we have increased the Project’s JORC resource through targeted drill work three times, which has led to a Current Total Mineral Resource of 678,000oz Au. We remain focused on continuing our drilling efforts, when the wet season has finished, to upgrade this further, and look forward to updating shareholders on these developments in Q1 2015.
“In conjunction with improving the resource potential of the Project we have also established a strong understanding of the Project’s metallurgy. This has proven that Mpokoto is amenable to gravity separation, with excellent recoveries of 84% available from transitional and fresh ore, which will positively impact costs and maximise operating margins. Going forward, we will continue to enhance the metallurgical potential of the Project, with a particular focus on increasing the recovery of gold from the shallower oxide ore.
“With a defined pathway to production secured, I am delighted with the progress we have achieved at Mpokoto. I believe that 2015 will be a year of immense opportunity for the Company as we continue to unlock the Project’s inherent value; key milestones to look out for this year include the completion of our DFS and the start of Project construction, as we aim to commence commercial production in H1 2016. We look forward to providing updates on these developments in due course.”
**ENDS**
Enquiries:
Company Justin Lewis, Director +61 439 162369Charles Zorab +44 207 233 1462
Nomad and broker: finnCap Limited Stuart Andrews/ Christopher Raggett +44 207 220 0500
Press relations: St Brides Media & Finance Ltd. Susie Geliher/Charlotte Heap +44 207 236 1177
More information can be found on the website www.armadalecapitalplc.com
Notes
Armadale Capital Plc is focussed on investing in and developing a portfolio of investments, targeting the natural resources sector 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 potential businesses where it can take an active role in their advancement.
Armadale owns 80% of the Mpokoto Gold Project in the Democratic Republic of Congo. Armadale is focussed on proving up the resource potential of Mpokoto with a view to commencing commercial gold production in H1 2016
Armadale also holds approximately a 30% interest in Mine Restoration Investments Ltd, a South African listed company, which is developing the briquetting and sale of coal fines in KwaZulu Natal.
In addition, Armadale has a small portfolio of listed investments which are focused on gold and copper production and exploration. The Directors continue to maintain an active acquisition strategy and will review investment opportunities that they believe have the potential to be accretive in terms of shareholder value.
Copyright Business Wire 2015