Armadale Capital Regulatory News (ACP)

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

31 August 2021

Armadale Capital Plc

('Armadale' or 'the Company')

Notification of Changes in Major Holdings

Armadale Capital plc, the AIM quoted investment group focused on natural resource projects in Africa, announces that it has just been informed that Kabunga Holdings Pty Ltd ("Kabunga") between 8 April 2021 and 15 June 2021 sold in total, 12,963,204 ordinary shares of 0.1 pence each in the capital of the Company ("Ordinary Shares") and then subsequently, on 20 August 2021 acquired 16,273,550 Ordinary Shares pursuant to the conversion of loan notes by the Company, announced on 8 August 2021. Following these transactions Kabunga holds 23,170,763 Ordinary Shares, or 4.36 per cent. of the total voting rights of the Company.

Notes

Armadale'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 - 59.5Mt at 9.8% TGC. This includes 11.5Mt @ 10.5% Measured 32.Mt Indicted at 9.6% and 15.9Mt at 9.8% 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.

The Company's updated Definitive Feasibility Study (June 2020) confirmed Mahenge as a long-life low-cost graphite project with a US$430m NPV and IRR of 91% based on a two-stage expansion strategy comprising:

· Stage One - processing plant and infrastructure at a nominal design basis rate of 0.4-0.5 Mt/pa to produce a nominal 60,000t/pa graphite concentrate in the first three years of production

· Stage Two - a second 0.5 Mt/y plant and associated additional infrastructure doubling throughput to 1 Mt/y from Year 5 of operation

The DFS shows that Armadale can be a significant low-cost supplier to the graphite industry with the potential to generate pre-tax cashflows of US$985m over an initial 15 year mine-life and scope for further improvement as this utilises just 25% of the current resource, which remains open in multiple directions.

Projected timeline to first production is expected to be approximately 10-12 months from the start of construction and the capital cost estimate for Stage 1 is US$39.7m, which includes a contingency of U$S4.1m or 15% of total direct capital cost, with a 1.6 year payback for Stage 1 (after tax) based on an average sales price of US$1,112/t. Stage 2 expansion is expected to be funded from cashflow.

More information can be found on the website www.armadalecapitalplc.com.