Mpokoto Gold Project remains on track towards i...

Mpokoto Gold Project remains on track towards its goal of production in H1 2016

Armadale Capital Plc

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

Mpokoto Gold Project remains on track towards its goal of production in H1 2016

Armadale, the AIM-quoted investment company focused on natural resource projects in Africa, is pleased to provide an update on the development and funding at its 678,000oz Mpokoto Gold Project (‘Mpokoto’ or the ‘Project’) in the Democratic Republic of the Congo (‘DRC’), which remains on track to commence commercial production in H1 2016.

Key Points:

• Decision to undertake additional metallurgical testwork in Q4 2015 to further optimise the identified two-phased processing routes for gold recovery (as announced on 3 August 2015)
• Definitive Feasibility Study (‘DFS’) continuing to progress well:
  • active involvement from Africa Mining Contracting Services group (‘A-MCS’)
  • completion now targeted for Q4 2015 to allow inclusion of results of planned metallurgical work and further input from A-MCS, which should positively enhance results of the DFS
• Positive engagement and progress with A-MCS to finalise the proposed financing package of up to US$20 million for Mpokoto; including:
  • Provision of finance to fund the plant and power plants; and
  • Mining contract to govern provision of mining services going forward
• Results from metallurgical work to support the definition of future drill targets to further enhance current resource of 678,000oz Au
• Mine construction expected to commence in December 2015 subject to receipt of financing
• Still expecting production H1 2016 on this basis - targeting approximately 25,000oz Au per annum over initial nine year life of mine with projected cash costs of US$647/oz
• Current Net Present Valuation of US$32.3m based on a forecast gold price of US$1,100/oz
• Raised £700,000 in August 2015 from institutional and other investors
• Director Dr Andrew Tunks will be making a trip to site over the coming weeks to ensure the Project remains on track towards its goal of production in H1 2016

Peter Marks, Armadale Chairman, commented, “Mpokoto continues to advance at pace towards commercial production. Having recently defined a two phase process route for gold recovery we believe there is potential to further optimise these results through additional metallurgical testwork, which we intend to undertake imminently. We believe the results from this will favourably impact the projected economics of the Project, which are already extremely competitive with estimated cash costs of US$647/oz and an NPV of US$32.3m. As a result of this new planned work, the DFS is now targeted for completion in Q4 2015, although importantly, the overall target of commercial production remains on track for H1 2016.

“We continue to progress our very constructive engagement with A-MCS who are providing active input to the DFS process as well as the necessary framework to conclude our financing agreements with A-MCS, which will bring with it up to US$20 million of financing. This means we are extremely well placed to commence mine construction, targeted for December 2015. With additional upside available, Mpokoto maintains its status as a low capex, low opex gold mine and I look forward to updating shareholders on these upcoming milestones in the coming months.”

**ENDS**

Enquiries:

For further information please visit www.armadalecapitalplc.com or contact:

Armadale Capital plc

Peter Marks, Chairman [phone]

Charles Zorab, Investor Relations

Nomad and broker: finnCap Ltd

Christopher Raggett/Simon Hicks [phone]

Joint Broker: Beaufort Securities Ltd

Jon Belliss [phone]

Joint Broker: VSA Capital Ltd

Andrew Raca/Richard Buckle [phone]

Press relations: St Brides Partners Ltd.

Hugo de Salis/Charlotte Heap [phone]

Notes

Armadale Capital Plc is focused 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 businesses where it can take an active role in their advancement. Armadale’s primary project is the development of the Mpokoto Gold project in the Democratic Republic of the Congo, in which it owns an 80% interest. Mpokoto has a current Total Mineral Resource of 678,000 oz Au from 14.58 Mt @ 1.45g/t Au at a cut-off grade of 0.5g/t. An Expanded Scoping Study for Mpokoto demonstrated a post-tax net present value of US$55.3m 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. Armadale also currently holds approximately a 30% interest in Mine Restoration Investments Ltd, a South African listed company, focused on the briquetting and sale of coal fines in KwaZulu Natal, as well as a number of other quoted investments.

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