Secures up to US$2.73 million to advance Mpokot...

Secures up to US$2.73 million to advance Mpokoto Gold Project

Armadale Capital Plc

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

16 October 2014

Armadale Capital Plc

(“Armadale” or the “Company”)

Armadale secures up to US$2.73 million to advance

Mpokoto Gold Project towards commercial production

Armadale, the AIM quoted investment company focused on natural resource projects in Africa, announces that it has entered into an agreement with Bergen Global Opportunity Fund, LP (‘Bergen’), an institutional investment fund, to secure flexible funding of up to US$2.73 million to support the development of its Mpokoto Gold Project, located in the Katanga Province of the Democratic Republic of Congo. Under the terms of the agreement the Company will issue to Bergen a zero coupon convertible security with a nominal value of US$480,000 and up to a further US$2.25 million in convertible securities.

Highlights:

• Flexible funding option for the Company by way of up to US$2.73 million in four staged convertible securities allows Armadale to further develop the Mpokoto Gold Project, where low capex, low opex gold production is targeted for H2 2015, and support working capital
• Initial convertible security of US$480,000 with conversion prices tied to future prices of the Company’s shares and with the staged funding at the Company’s option, potentially minimises dilution to existing shareholders
• Armadale has the right to terminate the facility at any time – the facility agreement also contains contractual limitations on Bergen's ability to dispose of shares following any conversion, as well as a prohibition on short selling.

Peter Marks, Chairman of Armadale said “We are pleased to welcome another institutional investor to our register. Securing this additional funding comes at an important time in the development of the Mpokoto Gold Project. We recently completed the acquisition of Kisenge Ltd, giving Armadale direct ownership of 80% of the Project; in the last few days we announced the third significant upgrade in the JORC resource at Mpokoto; and we will shortly announce the results of an updated and expanded scoping study, which we believe will demonstrate further enhanced economics for the Project. We now remain focussed on continuing this rapid development schedule in order to advance the Project into production.”

“This agreement will provide funding for the next stages of Mpokoto, including the finalisation of the Feasibility Study alongside some potential further exploration drilling to further expand the resource base. At the same time the flexible structure ensures that any dilution to shareholders is potentially minimised.”

Further Information

Bergen is managed by Bergen Asset Management LLC, a New York-based asset management company, which invests in high-growth public and private companies in a range of industries around the world.

The zero coupon convertible securities having a nominal amount of up to US$2.73 million (the ‘Convertible Securities’) will (subject to the satisfaction of certain conditions) be issued in four tranches, under a Convertible Securities Issuance Deed (the “Agreement”), and the Company will make an announcement of the issue of each Convertible Security. The initial Convertible Security will have a nominal value of US$480,000 and will be issued on or about 22 October 2014. Each of the three subsequent Convertible Securities will be issued 90 days after the date of issuance of the previous Convertible Security and have a nominal value of between US$400,000 and US$750,000.

Both parties have the right to terminate the Agreement at any time following the issuance of the first Convertible Security.

The Convertible Securities will (subject to the satisfaction of certain conditions) be convertible into ordinary shares of the Company (the “Shares”), in whole or in part, at the option of Bergen. The Company will make an announcement each time any Convertible Securities are converted in whole or in part and will specify in such announcement the relevant conversion price, which will be, at Bergen’s election: (a) 92.5% of the average of five daily volume-weighted average prices of the Shares on AIM during a specified period preceding the relevant conversion and (b) 0.14p.

Bergen has agreed to certain substantial, limitations on its ability to dispose of the Shares following a conversion of the Convertible Securities\. Further, Bergen has agreed not to, and to cause its affiliates not to, short-sell the Company’s shares.

Each of the Convertible Securities will have a term of 24 months following which any outstanding amount not converted into Shares must be repaid.

In connection with the Agreement:

(A) the Company has issued to Bergen 58,382,857 Shares by way of a commencement fee in relation to the overall funding; and

(B) the Company has agreed that it will issue 108 million warrants with an exercise period of 36 months from the date of issue (the “Warrants”) to Bergen entitling the holder of the Warrants to subscribe for one Share per Warrant at the exercise price equal to 0.14p.

The Convertible Securities will only be issued to the extent that the Company has corporate authority to do so.

Application will be made to the London Stock Exchange for any Shares issued and allotted on exercise of the Warrants or conversion of the Convertible Securities to be admitted to trading on AIM.

The proceeds from the issue of the Shares and the Convertible Securities will be used by the Company for general working capital purposes.

Admission to AIM

The Company has applied for admission of 58,382,857 new Shares to trading on AIM. Dealings are expected to become effective on or about 22 October 2014 (‘Admission’). Following Admission, the Company will have 3,714,901,168 Shares in issue with each Share carrying the right to one vote. There are no Shares currently held in treasury. The total number of voting rights in the Company therefore will be 3,714,901,168 and this figure may be used by shareholders as the denominator for the calculations by which they determine if they are required to notify their interest in, or a change to their interest in, the Company under the Financial Conduct Authority’s Disclosure Rules and Transparency Rules.

Enquiries please contact:

Armadale Capital:	Â
Peter Marks, Chairman		[phone]
Charles Zorab, Company Secretary		[phone]
Nomad and broker: finnCap Limited:
Stuart Andrews		[phone]
Christopher Raggett
Press relations: St Brides Media & Finance Ltd.:
Susie Geliher		[phone]
Charlotte Heap

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 an 80% interest in the Mpokoto Gold Project in the Democratic Republic of Congo. Armadale are focused 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 has a waste 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.