Discovery of High-Grade Coarse Flake Graphite M...

Discovery of High-Grade Coarse Flake Graphite Mineralisation Mahenge Liandu Project

Armadale Capital Plc

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

10 October 2016

Armadale Capital Plc (‘Armadale’ or ‘the Company’)

Discovery of high-grade coarse flake graphite mineralisation Mahenge Liandu Project

Armadale, the AIM quoted investment company focused on natural resource projects, is delighted to announce a preliminary discovery of high-grade coarse flake graphite mineralisation close to the surface at its Mahenge Liandu project in Tanzania (‘Mahenge Liandu’).

Summary:

• Preliminary discovery of high-grade coarse flake graphite mineralisation confirmed;
• Wide intervals of graphite schist, logged as high grade, have been intersected on the first reverse circulation (‘RC’) drill line completed with mineralisation commencing from near surface;
• Drilling commenced circa 2km from a previous RC drill hole, which returned 60m @ 10.7% Total Graphitic Carbon (‘TGC’); and

• Drilling is continuing on site and is expected to be completed in 3 to 4 weeks.

William Frewen, Chairman of Armadale said:

“This preliminary discovery of high-grade coarse flake graphite mineralisation underpins our belief that Mahenge Liandu offers significant upside opportunity. Moreover, being able to announce an extension to the maiden discovery from the first line of drilling is extremely encouraging. Following the recent restructuring of the Mpokoto gold asset, which we maintain prospective exposure to, we believe these highly encouraging results firmly underpin our refocused growth strategy as we target the burgeoning graphite market, which is experiencing increasing demand from lithium-ion battery manufacturers.”

Preliminary RC drilling results

The RC drilling undertaken to date has intersected wide intervals of high-grade graphite mineralisation. More specifically, mineralised graphitic schists with widths between 40-65m have been intersected in multiple holes. This discovery is an extension to the previously announced high-grade coarse flake graphite result, which retuned an outstanding 60m @ 10.7% TGC.

The current drilling programme, which will conclude in 3 to 4 weeks, is targeting the most advanced prospect within the project area. It is well defined by extensive areas of graphite outcrop and there is a strong electro-magnetic anomaly over the planned drilling area. The first batch of samples has now been submitted to ALS in Brisbane, Australia for analysis.

Conclusion

The Board of Armadale Capital considers the results to date continue to indicate that the Mahenge Liandu prospect has the potential to be a world-class graphite deposit. A substantial width of graphite mineralisation has now been defined and it is occurring from surface or near surface on multiple drill holes over a 2km strike length. Further drilling and assay results will be reported as they come to hand.

Further Information on Mahenge Liandu

The Mahenge Liandu project is located in the Ulanga District in south east Tanzania, approximately 300km south west of Morogoro and 10km from the town Mahenge.

High grade graphite mineralisation of up to 33.8% TGC has been demonstrated through the analysis of rock-chip samples taken from Mahenge Liandu in June 2016. Previous drilling has confirmed high-grade mineralisation from the surface, with results including 60m @ 10.7% TGC including 24m @ 12.9% TGC and 5m @ 21.5% TGC. The samples were taken from graphite schist outcrops over 1.5km of strike that was mapped by the previous owner surrounding the initial discovery holes.

The area is highly prospective for graphite with Mahenge Liandu located immediately to the east of Kibaran’s Epanko project. In July 2015, Kibaran completed a bankable feasibility study, 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;
• Sales price US$1,466/t of concentrate, opex FOB Dar es Salaam $570/t; and
• Metallurgical results: 85.7% of distribution greater than 106 micron, carbon concentrate of 96.3% TGC.

Black Rock Mining’s (`Black Rock’ and ASX:BKT) Mahenge project is situated 1km north-west of Armadale’s Mahenge Liandu project. It has a global resource of 131mt at 7.9% TGC (including 38mt at 10.2% TGC or 16.6mt at 11.1% TGC). Furthermore, Black Rock has delineated circa 80% of its resources in eight months, demonstrating the opportunity to add significant value to the Mahenge 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 Matt Bull, a competent person, who is a Member of the Australian Institute of Geoscientists. Mr Bull 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 Bull 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:	Â
Armadale Capital Plc Charles Zorab, Company Secretary		[phone]
Nomad and broker: finnCap Ltd Christopher Raggett / Simon Hicks		[phone]
Joint Broker: Beaufort Securities Limited Jon Belliss		[phone]
Press Relations: St Brides Partners Ltd Charlotte Page / Susie Geliher		[phone]

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 proven coarse flake, high grade graphite resources – ASX listed Kibaran and Black Rock have both identified and are developing significant proven and valuable graphite projects immediately adjacent to Mahenge 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% TGC. Exploration drilling completed at the project in December 2015 has further confirmed the mineral potential of the license area, with results including 10mt at 6.54% TGC, 24mt at 12.9% TGC and 5mt at 21.5% TGC. Armadale is targeting a maiden resource estimation in late 2016.

Other assets Armadale has an interest in include the Mpokoto Gold project in the DRC and portfolio of quoted investments.

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

The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014

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