Proposed Sale of the non-core Mpokoto Gold Project

Proposed Sale of the non-core Mpokoto Gold Project

Armadale Capital Plc

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

24 October 2018

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

Proposed Sale of the non-core Mpokoto Gold Project

Armadale, the AIM quoted investment company focused on natural resource projects in Africa, is pleased to announce that it has entered into new heads of agreement with Arrow Mining which provides for the sale of the Mpokoto Gold Project in the DRC (“Mpokoto Project”). Previous negotiations with parties for the sale of the Project, as referred to in Armadale’s 12 January 2018 announcement, have ceased. This new transaction is intended to crystallise the value of the Mpokoto Project with a company capable of obtaining the funding to bring the mine into production. The new transaction allows Armadale to focus on advancing its primary value driver, the high grade Mahenge Liandu Graphite Project in Tanzania, whilst ensuring the Company retains exposure to the development upside of the Mpokoto Project.

Sale Terms

Arrow Mining will take over the operations on the Mpokoto Project and is obliged to pay Armadale a 1.5% royalty on gold sales achieved once in production. The Mpokoto Project has a feasibility study based on a 720,000 tpa operation over 4.5 year producing an average of 24,900oz pa with a substantial sulphide resource that could further extend the mine life.

Sale of the Mpokoto Project under the heads of agreement is conditional upon entry into a formal sale agreement, due diligence by Arrow Mining and other standard conditions for regulatory approvals.

Further Information

1. Funds from the Mpokoto Project royalty will be used to support development the high grade Mahenge Liandu Graphite Project in Tanzania, and Armadale will consider other investment opportunities in line with its existing investing policy.

2. Armadale had previously entered into a joint venture agreement with Kisenge Mining Pty Ltd (‘Kisenge Mining’) for the Project. Kisenge Mining has agreed to withdraw from the joint venture agreement to allow the new heads of agreement to proceed.

About Arrow

Arrow Mining is a privately owned South African based gold mining and exploration company with its principal activities focused on advanced projects in the DRC, South Africa and Zimbabwe. The CEO of Arrow Mining, Jason Brewer, who has extensive experience in Africa’s mining and exploration sectors and in particular in successfully raising debt and equity capital and developing mining projects in the DRC. Arrow's shareholders include a number of Australian, Asian and South African based investment groups.

Nick Johansen, Director of Armadale said, “The Board of Armadale is confident that the Arrow Mining team, which has significant experience of operating in the DRC, represents the best opportunity for Armadale to crystallise the value of the Mpokoto Project and begin receiving returns through the agreed royalty payments on gold sales. We appreciate this process has been more protracted than originally envisaged, but Arrow Mining comes with it a proven track record in raising debt and equity capital and developing mining projects in the DRC which places it in a strong position to quickly progress development at the Mpokoto Project and work towards delivering first gold production. We look forward to reporting further news in due course.”

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**

For further information, please visit the Company’s website www.armadalecapitalplc.com, follow Armadale on Twitter @ArmadaleCapital or contact:

Enquiries:	Â	Â
Armadale Capital Plc Tim Jones, Company Secretary		[phone]
Nomad and broker: finnCap Ltd Christopher Raggett / Max Bullen-Smith		[phone]
Joint Broker: SVS Securities Tom Curran / Ben Tadd		[phone]
Press Relations: St Brides Partners Ltd Susie Geliher / Juliet Earl		[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 inferred mineral resource estimate of 51.1Mt @ 9.3% TGC. Marking the project 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.

Other assets Armadale has an interest in include the Mpokoto Gold project in the Democratic Republic of Congo and a portfolio of quoted investments.

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