Update on Metallurgical Testwork at Mpokoto Gol...

Update on Metallurgical Testwork at Mpokoto Gold Project

Armadale Capital Plc

Armadale Capital Plc (‘Armadale’ or ‘the Company’)
Update on Metallurgical Testwork at Mpokoto Gold Project

Armadale, the AIM quoted investment company focused on natural resources projects in Africa, is pleased to announce a positive update on the metallurgical testwork programme for the Mpokoto Gold Project (‘Mpokoto’ or the ‘Project’) in the Katanga Province of the Democratic Republic of Congo which has reconfirmed the gold recoveries achieved from previous testwork.

Armadale has now 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 (a further drilling programme is planned in the next few months). Metallurgical test work was carried out on un-milled samples from the oxide zone at Mpokoto. The samples were subjected to a series of tests aimed to mimic the metallurgical process which has been designed to recover the gold.

Highlights:

• Metallurgical testwork on a number of samples of oxide ore has 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 has significantly increased the Company’s confidence in the proposed flow sheet.
• The oversize material from the trommel screen, containing approximately 14% of the gold in 10% of the mass, will be stockpiled and treated through the stage two plant, which will include a crusher to reduce the size of this material
• Testwork previously demonstrated recoveries of 90% – anticipated total recovery remains at 90% of contained gold from the oxide ores
• Testwork has previously demonstrated gold recovery of up to 84% from the transitional and fresh ore – gold contained in transitional and fresh ores totals more than 300,000 ounces
• Defined development strategy to rapidly advance the Project through to low capex, low opex gold production in H1 2016 – additional drilling is planned to commence shortly to further expand resource and overall size of 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 Group is in active discussions with potential funding partners to secure the $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.

Justin Lewis, Director of Armadale, said, “The scope and scale of the Mpokoto Gold Project continues to develop in line with our expectations with a view to being able to deliver a low capex, low opex commercial gold mining project in the near future. The results of this metallurgical testwork confirm the results of previous testwork and significantly increases the management confidence in the design of the processing plant to extract the gold.

“Mpokoto continues to offer highly attractive returns and near term production potential, with robust economics even at low gold prices, and we are focused on rapidly advancing this Project into production in H1 2016. Over the next few months we remain focused on completing the funding of the project in parallel with the completion of a definitive feasibility study. In addition, once the wet season has come to an end, we will be undertaking a drilling programme with the intention of further expanding the resource at Mpokoto.”

Summary of results of Metallurgical Testwork

Metallurgical testwork on the oxide ores has been conducted on six samples from various positions within the proposed pits and representing different grade types. The results of this testwork are tabulated below:

• Six samples selected from oxide ores of two of the projected mine pits were tested in January and February 2015 by Simpson & Peacock in Harare (Zimbabwe)
• The samples were individually screened to 2mm by means of a trommel screen, and the undersized material was processed by gravity concentrators (Knelson) followed by cyanidation of the gravity tails
• Recoveries on the -2 mm fraction averaged 87,6% with individual results being:

Â	Â	Â	Â	Â
SAMPLE	Â	Head grade (gr./T)	Â	Recovery (%)
1	Â	2.27	Â	84.5
2	Â	1.37	Â	90.7
3	Â	0.90	Â	84.3
4	Â	1.06	Â	86.9
5	Â	1.12	Â	86.3
6	Â	0.59	Â	92.9
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• Additional tests are planned, with the view of increasing the overall recoveries from the oversize material produced by the trommel screen that represents approximately 11% of the feed mass.

This testwork clearly demonstrates the effectiveness of the Company’s 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.

As set out in the Expanded Scoping Study, the plant additions, required only after the oxide plant has been in operation for approximately 3 years, will have a capital cost of approximately US$13 million and will extend the life of the mine by over 5 years.

The testwork was carried out in the laboratory of Peacocke and Simpson in Harare, Zimbabwe. The consulting metallurgist overseeing the testwork and plant design for the Company is Richard Way of Bara Consulting – a Johannesburg based mining consultancy firm.

Further Metallurgical Testwork

Over the next few months further testwork is being undertaken on the oxide ore. Further samples have recently been selected and are being dispatched to Peacocke and Simpson for further tests. These tests will seek to further improve the current anticipated 90% recovery of gold from the oxide ores. Increasing the rate of recovery should result in a further reduction of operating costs per ounce of gold produced as well adding value to the overall Project.

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.

Competent Person Statement:

Scientific or technical information in this release has been reviewed by Mr. Andrew (Jim) Pooley Pr Eng, BSc Eng (Hons), FSAIMM, Managing Director, of Bara Consulting Pty Ltd. Jim Pooley is a fellow of the Southern African Institute of Mining and Metallurgy and has over 19 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). Mr. Jim Pooley 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

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Au		Gold
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Cyanidation		This is a metallurgical technique for extracting gold from low-grade ore by using a cyanide solution to convert the gold to a water soluble coordination complex.
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Fresh		Depth of rock where the original mineralogy of the rock remains intact, without being affected by chemical or mechanical processes.
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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.
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g/t		Grams per tonne
		Â
Knelson Centrifugal Concentrator		A part of the process plant that undertakes Gravity Separation
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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.
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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.
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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.
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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.
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Oz		Ounce
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Transitional		Shallow to intermediate depth of rock (generally <150m) where the original mineralogy of the rock is broken down by the action of external agencies such as water percolation and chemical leaching. An intermediate weathering step between oxide and fresh.
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Trommel Screen		A trommel screen, also known as rotary screen, used mainly in the mineral and solid-waste processing industries, which separates different sized materials. It usually consists of a perforated cylindrical drum which is normally elevated at an angle at the feed end. Physical size separation is achieved as the feed material spirals down the rotating drum, where the undersized material smaller than the screen apertures passes through the screen, while the oversized material exits at the other end of the drum.
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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.
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Enquiries:
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Company
Justin Lewis, Director		[phone]
Charles Zorab		[phone]
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Nomad and broker: finnCap Limited
Stuart Andrews/ Christopher Raggett		[phone]
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Press relations: St Brides Partners Limited
Susie Geliher/Charlotte Heap		[phone]
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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 briquetting 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.