Last checked at 31 Mar 2015 07:00
Armadale Capital Plc / Index: AIM / Epic: ACP / Sector: Investment Company
31 March 2015
Armadale Capital Plc (‘Armadale’ or ‘the Company’)Positive Geological Review Highlights New Resource Potential at the Mpokoto Gold Project
Armadale, the AIM quoted investment company focused on natural resources projects in Africa, is pleased to announce the positive conclusion of a geological review undertaken by CSA Global Pty Ltd (‘CSA’) for the Mpokoto Gold Project (‘Mpokoto’ or the ‘Project’) in the Katanga Province of the Democratic Republic of Congo.
As part of a site visit to the Mpokoto Gold Project, CSA were asked to undertake a review to independently assess the Company’s geological interpretations relating to stratigraphy, mineralisation, and controls on mineralisation and comment on implications.
To view a copy of the announcement including maps and figures, please go to the Company’s website at www.armadalecapitalplc.com.
Highlights:
Positive conclusions from CSA’s geological review highlights potential for extension of mineralisation to be extrapolated and targeted with a higher degree of confidence from known mineralised intercepts An Exploration Target of between 2.4Mt to 3.0Mt at a grade of 1.25 to 1.5g/t Au for an additional 120,000 to 150,000 ounces of gold has been identified The newly identified Exploration Target areas are along-strike and down dip from known mineralisation to be drill tested in May 2015 Extensions of high grade mineralisation in sheared altered mafic rocks intersected in drill hole MPDD0064 which intercepted 27.9 metres@ 7.8 Au g/t are highlighted in addition to laterally continuous zones of mineralisation Potential for material enhancements to current pit models and economic fundamentals of the Project which has a current Total Mineral Resource of 678,000oz gold (‘Au’) from 14.58 million tonnes (‘Mt’) @ 1.45g/t Au at a cut-off grade of 0.5g/t and demonstrated a post-tax net present value of US$55.3 million Defined development strategy to rapidly advance the Project through to low capex, low opex gold production in H1 2016Peter Marks, Chairman of Armadale, said, “The scope and scale of the Mpokoto Gold Project continues to develop in line with our expectations of being able to deliver a low capex, low opex commercial gold mining project in the near future. The results of this geological review have provided the Company with a greater degree of confidence in planning the next drilling programme and targeting further mineralisation.”
Mpokoto Gold Project
Mpokoto has a current Total Mineral Resource of 678,000oz gold (‘Au’) from 14.58 million tonnes (‘Mt’) @ 1.45g/t Au at a cut-off grade of 0.5g/t. The Company last year announced the results of an Expanded Scoping Study for Mpokoto which demonstrated a post-tax net present value of US$55.3 million based upon a discount rate of 8% and a gold price of US$1,250/oz. The Project comprises four Mining Licences which are valid for an initial term of 30 years from 30 September 2014.
The Company is currently finalising a definitive feasibility study on the Project which advances the work already undertaken as part of the Expanded Scoping Study. In parallel with this study the Company is in active discussions with potential funding partners to secure the US$20 million of capital required to commence construction of the Mpokoto Project. The Company anticipates that this funding will be secured at the project level.
The proposed drilling programme will have several objectives including targeting primary mineralisation and down dip mineralisation beyond the present pit limits. In particular, the recent work has highlighted the possibility of extensions of high grade mineralisation in sheared altered mafic rocks intersected in drill hole MPDD0064 which intercepted 27.9 metres@ 7.8 Au g/t. In addition, the geological work points toward laterally continuous zones of mineralisation. Further drilling will target near-surface "along strike mineralisation" which has the potential to substantially increase current pits to the north-west.
An Exploration Target of between 2.4Mt to 3.0Mt at a grade of 1.25 to 1.5g/t Au for an additional 120,000 to 150,000 ounces of gold has been identified and the Company hopes to bring these ounces "to book" in the planned drilling programme. The Company intends to conduct the programme during the course of Q2, commencing in May 2015, as the wet season comes to an end. The programme is expected to take 8-12 weeks to complete, depending on conditions and number of drill rigs available.
Geological Review Completed
At Armadale’s request, CSA Global Pty Ltd undertook a technical review of the Mpokoto geology data. For this purpose CSA re-logged multiple diamond core holes from locations throughout the project area. Particular attention was paid during logging to recording regolith development, sedimentary rock facies and texture, stratigraphic relationships, and style/intensity of deformation and alteration associated with mineralisation.
The review confirmed regolith logging (which is an important input parameter in the Expanded Scoping Study) conducted by the Company and generated important new insights into the primary geological setting at Mpokoto, which differs (in part) to past geological interpretations.
The critical observations and conclusions are summarised below:
1. The regolith interpretations of the Company geologist are valid; the regolith profile is 40m to 50m thick and includes a veneer of soil above a saprolite and saprock zone
2. Two conformable rock packages occur at Mpokoto and include a footwall package of mafic rock and a hanging wall succession of meta-sedimentary rocks consisting of pelites (slates), psammites (sandstones) and boulder psammites (bolder sandstones)
3. The alteration includes silicification and quartz veining, sulphidation, and clay-mica alteration
4. Gold mineralisation is directly related to the high-strain alteration bands cross cutting the rock sequence
The implications from these observations are twofold:
1. The observation regarding the controls on mineralisation validate the approach to resource modelling and disprove a stratigraphic control as previously invoked
2. The geometry and distribution of mineralisation appear to post-date sedimentation and the planar nature implies further exploration potential along strike; the correlation between higher primary grades and shear-altered mafic rocks needs to be explored further
Additional Metallurgical Testwork
As announced on 9 March 2015, Armadale has received the results of a metallurgical testwork programme which was completed earlier this year on further samples from Mpokoto arising from the drilling programme completed last year. The metallurgical test work was carried out on 1/4 core samples from mineralisation in the oxide zone at Mpokoto. The samples were subjected to a series of tests aimed to testing the metallurgical process which has been designed to recover the gold. The testwork confirmed recoveries of 84-92% from the undersize material arising from the trommel screen, which is the primary product of the stage one gold plant. This work clearly demonstrates the effectiveness of the Company’s proposed low cost modular process design and will allow the Project’s metallurgists to design additions, being crushing and milling circuits, to the initial oxide plant to enable the treatment of the oversize oxide material from the trommel screen, as well as the transition and fresh rock.
Proposed Work Programme
The geological review completed in 2014 revealed a strong structural control on the origin and geometry of mineralisation. The implication from this finding is that the extension of mineralisation can be extrapolated and targeted with a higher degree of confidence from known mineralised intercepts. This concept is at the base of the proposed drilling work for the expansion of the resource to the north-west. Work in this area should be implemented by way of step out drilling from the current most north-western drilling traverse on nominally 50 spacing, so that the drilling can be adjusted in line with the intersection of mineralisation. Up to 400m strike length of stacked mineralisation lenses can potentially be added to the resource base. Initially the near-surface mineralisation should be targeted to a depth of 75m.
Two target areas of a more conceptual nature but with a potentially significant impact on the economics of the project were interpreted in the vicinity of the “fault” and MPDD_0064 drill hole.
The proposed work programme is structured according to the highest immediate effect it potentially can have to the current Mineral Resource base for Mpokoto. The following ranking is proposed:
1. Drilling to support the conversion of all Inferred classified resource to Indicated category
2. Convert exploration of targets to classified resource status
3. Expand oxide resources where they are not closed off
4. Test with targeted drill holes structural and/or stratigraphic drill holes the depth continuity of primary mineralisation, and
5. Target high-grade primary mineralisation in mafic host rock
6. Work Programme Area 4 and 3
7. Resource areas 4 and 3 are economically important parts of the Mpokoto deposit area and are both, in terms of upside to potential expansion and with regard to targeting new mineralisation concepts relevant
Armadale intends to commission a 2,500m reverse circulation drilling programme at the Mpokoto Gold Project. Whilst it had been hoped that it would be possible to undertake this programme during the wet season this proved unfeasible and it is intended the programme will commence in May as the wet season comes to an end.
About Mpokoto Gold Project
Mpokoto is located in the western part of the Katanga Province approximately 250km west of Kolwezi in the Democratic Republic of Congo, approximately 25km from the Zambian border. The area is highly prospective, with local operators including Ivanhoe Mines and Glencore Plc. Since 1998, approximately US$20 million has been spent on gold exploration at the Project.
Mpokoto has a current Total Mineral Resource of 678,000oz gold (‘Au’) from 14.58 million tonnes (‘Mt’) @ 1.45g/t Au at a cut-off grade of 0.5g/t. The Company last year announced the results of an Expanded Scoping Study for Mpokoto which demonstrated a post-tax net present value of US$55.3 million based upon a discount rate of 8% 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 is currently finalising a definitive feasibility study on the Project which advances the work already undertaken as part of the Expanded Scoping Study. In parallel with this study the work the Company is in active discussions with potential funding partners to secure the US$20 million of capital required to commence construction of the Mpokoto Project. The Company anticipates that this funding will be secured at a project level.
Competent Person Statement:
Scientific or technical information in this release has been reviewed by Dr Simon Dorling MAIG, Principal Geologist, at CSA Global Pty Ltd. Dr Dorling is a member of the Australasian Institute of Geoscientists (MAIG) and has over 20 years’ experience, which is relevant to the style of mineralisation 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” (the JORC Code). Dr Simon Dorling consents to the inclusion in this announcement of the information, in the form and context in which it appears.
A copy of the announcement can be found on the Company’s website at www.armadalecapitalplc.com.
Glossary of Technical Terms
| Au | Gold | ||
| Fresh | Depth of rock where the original mineralogy of the rock remains intact, without being affected by chemical or mechanical processes. | ||
| Gravity Separation | A process in the treatment of ore whereby heavy mineral species such as gold are separated from the lighter minerals, such as quartz, by passing the ore through one of a variety of gravity separators. | ||
| g/t | Grams per tonne | ||
| Measured | That part of a Mineral Resource for which quantity , grade, densities, shape and physical characteristics are estimated with sufficient confidence to support detailed mine planning and final evaluation of the economic viability of the deposit. A Measured classification is the highest classification level for Mineral Resource estimates. | ||
| Indicated | That part of a Mineral Resource for which quantity , grade, densities, shape and physical characteristics are estimated with sufficient confidence to support mine planning and the evaluation of the economic viability of the deposit. An Indicated classification is of a lower confidence level than a Measured classification. | ||
| Inferred | That part of a Mineral Resource for which quantity and grade are estimated on the basis of limited geological evidence and sampling. An Inferred classification is of a lower confidence level than an Indicated classification. | ||
| Oxide | Shallow depth of rock where the original mineralogy of the rock is extensively broken down by the action of external agencies such as water percolation and chemical leaching. | ||
| Oz | Ounce | ||
| Regolith | The layer of layer of loose, heterogeneous superficial material covering sold rock, which includes dust, soil, broken rock and other related materials | ||
| Saprolite and saprock zones | Saprolite and saprock form zones for the saprolith which is a layer of the regolith. Saprolite is a chemically weathered rock and form in the lower zone of soil profiles, representing deep weathering of the bedrock surface. | ||
| Transitional | Shallow to intermediate depth of rock (generally | ||
| Weathering | The process by which rocks are broken down and decomposed by the action of external agencies such as wind, rain, temperature changes, plants and bacteria. |
**ENDS**
Enquiries:
| Armadale Capital | |||||
| Justin Lewis, Director | +61 439 162369 | ||||
| Charles Zorab | +44 207 233 1462 | ||||
| Nomad and broker: finnCap Limited | |||||
| Stuart Andrews/ Christopher Raggett | +44 207 220 0500 | ||||
| Joint Broker: VSA Capital Limited | +44 203 005 5000 | ||||
| Bhavesh Patel/Richard Buckle | |||||
| Press relations: St Brides Partners Limited | |||||
| 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.
Armadale also holds approximately a 30% interest in Mine Restoration Investments Ltd, a South African listed company, which aims to develop profitable operations within the South African mining industry through its coal processing operation 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