Mahenge Liandu Resource Upgrade to 51.1Mt at 9....

Mahenge Liandu Resource Upgrade to 51.1Mt at 9.3% TGC with 75% now in the Indicated Category

Armadale Capital Plc

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

7 February 2018

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

Mahenge Liandu Resource Upgrade to 51.1Mt at 9.3% TGC

With 75% now in the Indicated Category

Armadale, the AIM quoted investment company focused on natural resource projects in Africa, is pleased to announce a Resource upgrade at the Mahenge Liandu Graphite Project in Tanzania (‘Mahenge Liandu’).

Overview

• Infill drilling of the resource at Mahenge Liandu undertaken to upgrade the category from Inferred to Indicated to allow for feasibility studies, mine planning and economics
• Resource successfully upgraded to 51.1Mt at 9.3% Total Graphitic Carbon (‘TGC’), including 38.7Mt Indicted at 9.3% and 12.4Mt at 9.1% TGC
• Upgrade represents a 25% increase from the previous 40.9Mt inferred resource at 9.41% TGC
• Over 75% of the Resource now in the Indicated category
• TGC grade and quantum of indicated resource confirms Mahenge Liandu as one of the highest-grade graphite deposits in Tanzania and the rest of the world
• Areas of high-grade, near surface mineralisation have been confirmed, allowing a staged approach to development, which lowers the capital development and operating costs early in the mine life
• Test work completed to date has confirmed that premium quality, high purity concentrates can be produced using a conventional flotation circuit
• A diamond drilling programme is planned to commence at the conclusion of the wet season (March / April 2018) to provide samples for more extensive metallurgical test work
• The deposit remains open to the north south and down dip, meaning there is significant potential to increase the resource further, with further drilling planned for later in 2018
• Mine planning has now commenced and the results from this and the updated resource will be incorporated in the Scoping Study being carried out by experienced engineering consultancy BatteryLimits, which is currently underway – results of the Scoping Study are expected by the end of Q1 2018
• Combination of a number of key factors – high overall TGC grade, sizable indicated resource, ability to utilise convention flotation circuit to produce premium quality product and near surface mineralisation with super high grade TGC (see below) – all point to the ability to produce an extremely robust initial scoping study which will provide first pass project economics

Nick Johansen, Director of Armadale said: “A 25% increase in the known graphite resource is a significant achievement. Add to this the fact that over 75% of the resource is now in the indicated category and it is clear to see both the value of our project and the success of our work programmes to-date. We are committed to maintaining this pace of development, and testament to this we are pleased to confirm that mine planning has now commenced. The results of this, together with the expanded and upgraded resource, will feed into the on-going Scoping Study, which is targeted for completion by the end of Q1 2018 and will give further clarity on the commercial potential of Mahenge Liandu. Critically, our Project has already been proven to be one of the highest-grade graphite deposits in Tanzania, and with significant amounts of this mineralisation located near surface we will be able to commence mining via staged development, which will help fast-track to production and also lower the capital development and operating costs early in the mine life. We look forward to providing shareholders with further updates on our progress in the near term.”

High Grade near Surface mineralisation

The Mahenge Liandu Resource has increased to 51.1Mt with greater than 75% in the indicated Resource Category. The resource is an increase of 25% from the 40.9Mt previously reported. The updated resource figures are reported in Table 1.

Table 1. Mahenge Liandu Resource Statement

Â	Â	Tonnage (Mt)	Â	% Cut-Off TGC	Â	Average %TGC
Inferred		12.4		3.5		9.1
Indicated		38.7		3.5		9.3
Measured		0		3.5		0
Total		51.1		3.5		9.3

The Resource contains areas of high grade near surface mineralisation. Armadale is currently working on mine optimisation with a focus on targeting this near surface high grade mineralisation. Some of the better near surface high-grade intercepts include;

• -- 6m @ 12.8% Total Graphitic Content (‘TGC’) from surface
• 14m @ 16.7% TGC from 2m
• 15m @ 14% TGC from surface
• 11m @ 14.8% TGC from 15m
• 10m @ 18.5% TGC from 16m

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**

Enquiries:	Â
Armadale Capital Plc Tim Jones, 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 Susie Geliher / Charlotte Page		[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 a high-grade JORC compliant Indicated and inferred mineral resource estimate of 51.1Mt @ 9.3% TGC, making it 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.

Aside from Mahenge Liandu, Armadale has an interest in a portfolio of quoted investments and in January 2018 agreed to sell its interest in the Mpokoto Gold Project in the Democratic Republic of Congo for total potential consideration of US$562,500 and a 1.5% royalty on gold produced. Completion of the sale agreement is subject to execution of a formal binding agreement, which is expected in Q1 2018.

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

Competent Person statement

The Resource Statement has been prepared by Mark Biggs for and on behalf of Armadale Capital Plc. Mark Biggs has over 34 years of experience in base metal, industrial mineral, coal exploration and mine evaluation throughout Australia, South Africa, Mongolia and China. He has worked extensively within the Bowen and Surat Basins and was resident at several Central Queensland coal mines for 22 years. He has held a number of roles in these mine’s Technical Services, including Senior Geologist, Chief Geologist, Coal Quality and Scheduling Superintendent and Acting Technical Services Manager. Mark has extensive experience in open cut and underground exploration techniques, geophysical techniques, assay interpretation, geotechnical and structural modelling, mining, and scheduling. 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”. Both Mr Biggs and 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.

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