Update on the Mpokoto Gold Project

Update on the Mpokoto Gold Project

Armadale Capital Plc

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

19 February 2014

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

Update on the Mpokoto Gold Project

Armadale Capital Plc (‘Armadale’ or ‘the Company’), the AIM quoted investment company focused on natural resource projects in Africa, is pleased to provide an update on progress at the Mpokoto Gold Project in the Katanga Province in the south of the Democratic Republic of Congo (‘Mpokoto’ or ‘the Project’), which has a current Total Mineral Resource of 510,000oz gold (‘Au’) from 11.2 million tonnes (‘Mt’) @ 1.42g/t Au at a cut-off grade of 0.5g/t.

Highlights:

• Acceleration of development at Mpokoto – Scoping Study and related metallurgical and environmental reports nearing completion in conjunction with the Mining Licence application, which is expected to be made by 31 March 2014
• Highly encouraging initial results from metallurgical studies, which suggest weathered and oxide ore is amenable to gravity separation allowing for higher recoveries at a lower cost
• Gravity separation would considerably enhance the overall economics of the Project – targeting overall opex costs of less than US$650/oz Au produced for Phase 1 targeting the weathered ore
• Significant potential for further economic enhancement through resource upside – Exploration Target of 10Mt-15Mt at 1.2g/t-1.5g/t Au
• Defined development strategy to rapidly advance the Project through to low capex, low opex gold production in 24 months

Justin Lewis, Director of Armadale, said, “Our ambitious development strategy at our flagship Mpokoto Project is bearing fruit for the Company, with these latest results further enhancing the value of this asset and driving development forwards with the aim of commencing commercial production within 24 months. The highly encouraging initial metallurgical studies, which have confirmed that the weathered and oxide proportions of the ore are amenable to gravity separation and concentration, will allow us to further reduce our anticipated operating costs, something we regard as critical in the current gold price environment. With total opex costs targeted to be less than US$650 per oz of gold produced for Phase 1 targeting the weathered ore, our current modelling shows an extremely attractive net present value for the Project, at a significantly premium to the purchase price by Armadale. We very much look forward to updating shareholders with the key findings and parameters of the Scoping Study before 31 March 2014, and remain focused on further delineating gold resource ounces, together with completing the additional critical development work required to take Mpokoto into low cost commercial gold production.”

Mpokoto Gold Project Development

Mpokoto is located in the western part of the Katanga Province approximately 250km west of Kolwezi in the Democratic Republic of Congo, and approximately 25km from the Zambian border. The area is highly prospective, with local operators including Ivanplats Limited and Glencore Plc and since 1998, approximately US$20 million was spent on gold exploration at the Project.

Armadale continues to make strong progress towards the completion of its scoping study and related reports on the Project. Since completing an upgrade to the geological model and resource at the end of 2013, which led to a 35% increase in the overall resource to 510,000oz Au from 11.2Mt @ 1.42g/t Au at a cut-off grade of 0.5g/t, the Company has progressed with a number of further studies including metallurgical and environmental reports required to complete the scoping study. The scoping study and related reports will be incorporated into the Mining Licence Application, which is on course to be submitted by 31 March 2014.

The results received from the initial metallurgical studies undertaken over the past few months suggest that the weathered and oxide proportions of the ore are amenable to gravity separation and concentration. In particular the tests suggest that recoveries of up to 80% are achievable from this process. The advantage of this process is that as a result of the limited use of chemicals, such as cyanide, the overall cost of processing the ore is considerably reduced, with Armadale now targeting overall opex costs of less than US$650 per oz of gold produced for Phase 1 targeting the weathered ore. This will lead to a significant uplift in the overall value of the Project.

The Company anticipates publishing the results of its Scoping Study before 31 March 2014 that will include an initial estimate of operating and capital costs.

In addition to development work, the Company will also continue to assess the Resource upside potential of the Project, which has a total Exploration Target of between 10 and 15Mt at 1.2g/t-1.5g/t Au. The quantity and grade of the Exploration Target is conceptual and there has been insufficient exploration to define a Mineral Resource.

The potential for additional resources and reserves is strong. Should this target mineralisation be converted to Inferred and Indicated resources and then to reserves, it is likely that the Project throughput rate can be substantially upgraded. Resource delineation drilling programmes are planned to test the target potential.

Competent Person Statement

Scientific or technical information in this release has been reviewed by Andrew (Jim) Pooley PR Eng, BSc Eng (Hons), FSAIMM, Managing Director, of Bara Consulting Pty Ltd. Mr Pooley is a Fellow of the Southern African Institute of Mining and Metallurgy (SAIMM) and has 20 years’ experience, which is relevant to the style of mineralisation under consideration and to the activity which they are undertaking to qualify as Competent Persons, as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” (the JORC Code). Mr Pooley consents to the inclusion in this announcement of his name, in the form and context in which it appears.

**ENDS**

Enquiries:

Company

Justin Lewis, Director [phone]

Charles Zorab [phone]

Nomad and broker: finnCap Limited

Stuart Andrews/ Christopher Raggett [phone]

Press relations: St Brides Media & Finance Ltd.

Susie Geliher/ Charlotte Heap [phone]

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 and/or infrastructure sectors. 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 currently holds a right to 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 in 2015.

Armadale also holds approximately a 40% 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 and acid mine drainage technology in the Witwatersrand basins.

In addition, Armadale has a small portfolio of listed investments which are focused on gold 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.