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Armadale Capital Plc (ACP)

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Wednesday 11 September, 2019

Armadale Capital Plc

Mineral Resource Update Nearing Completion

Mineral Resource Update Nearing Completion

Armadale Capital Plc

 

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

11 September 2019

Armadale Capital Plc (‘Armadale’ or ‘the Company’)
Successful Drilling Results Confirm High Grade Mineralisation
Mineral Resource Update Nearing Completion

Armadale Capital plc (LON: ACP), the AIM quoted investment group focused on natural resource projects in Africa, is pleased to confirm the receipt of assay results from its final diamond drilling campaign at the Mahenge Liandu Graphite Project in Tanzania (“Mahenge Liandu” or “the Project”), which confirm the high-grade near surface mineralisation.

Combined with the recently announced reverse circulation (“RC”) drilling results, the geological team is confident that it now has sufficient data points to fully define a JORC compliant Mineral Resource update. Importantly, the Resource update will underpin an initial 10-15 year mine life, in respect of only 25-30% of the mineralised ground tested by drilling and incorporated within the Resource.

The Mineral Resource forms part of an ongoing Definitive Feasibility Study (“DFS”) into the development of a high value graphite operation at Mahenge Liandu, supplying fast-growing end markets such as battery technology.

Highlights:

  • High-grade, near surface assayed diamond drill intercepts recorded including:

- 5m @ 19.8% total graphite content (“TGC”) from 1m;

- 14m @ 14.3% TGC from 22m;

- 8m @ 15.3% TGC from 7m; and

- 7m @ 16.2% TGC from 22m

  • Diamond drill results, which confirm broad intervals of high-grade mineralisation, are consistent with findings from the recently concluded RC drilling campaign
  • Next steps focused on utilising the results to fully define, with high geological confidence, a JORC compliant Mineral Resource update focused on high-grade and near surface mineralisation for first 10-15 years of a planned 32 year mine life
    • Existing JORC compliant indicated and inferred mineral resource estimate announced February 2018 stands at 51.1Mt at 9.3% TGC, including 38.7Mt Indicated at 9.3% and 12.4Mt at 9.1% TGC, making it one of the largest high-grade resources in Tanzania
  • Results positively impact on the Project’s economics and forward commercialisation plans which, as with recent RC drill data and metallurgical results, are key to discussions in respect of further off-take and project level financing agreements with Chinese partners

Nick Johansen, Director of Armadale, said: “These latest drilling results clearly enhance Mahenge Liandu’s already favourable economics and provide valuable data as we move towards conclusion of the updated Mineral Resource. Based on the results of diamond and RC drilling programmes, we are confident the Mineral Resource will confirm that in Mahenge Liandu, we have a strategically important project that is well placed to become a leading supplier of high value graphite products for many years to come.

“As we advance towards the final stages of the DFS, strategically the Board is thinking beyond completion to the important next steps to accelerate the delivery of a first-rate graphite project. Notably, we are focusing more definitively on our commercialisation plans, especially off-take and project level finance agreements, to ensure the transition from explorer to emerging producer continues to gain momentum.”

FURTHER INFORMATION

Summary Assay Results Table

Hole ID

Easting

Northing

Elevation

Depth

From

To

Width

Average TGC%

Including

LDDD0001

251,658

9,035,187

650

65.30

0

35

35

6.7

6m @ 11.4% from surface

41

59

18

9.1

[email protected]% from 50m

LDDD0002

251,816

9,035,236

639

65.43

0

52

52

7.3

[email protected]% from 13m

LDDD0003

251,746

9,035,387

698

65.60

21

36

15

13.7

[email protected]% from 22m

52

64

12

6.2

LDDD0004

251,836

9,035,442

697

63.50

0

48

48

8.4

[email protected]% from 35m

LDDD0005

251,793

9,035,423

699

59.69

0

54

54

8.4

[email protected]% from 1m

LDDD0006

251,787

9,035,317

685

70.51

4

15

11

12.8

[email protected]% from 7m and

22

70

48

8.4

[email protected]% from 22m

LDDD0007

251,852

9,035,284

662

50.00

0

48

48

9.6

[email protected]% from 30m and [email protected]% from 39m

Mahenge Liandu Graphite Project, Tanzania

Armadale Capital’s wholly-owned Mahenge Liandu Graphite Project is located in a highly prospective region, with a high-grade JORC compliant indicated and inferred mineral resource estimate announced February 2018 – 51.1Mt at 9.3% TGC. This includes 38.7Mt Indicted at 9.3% and 12.4Mt at 9.1% TGC, making it one of the largest high-grade resources in Tanzania.

The work to date has demonstrated the Project’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.

Currently, Armadale is completing a Definitive Feasibility Study based on the results of a Scoping Study that was completed in March 2018. The study was based on a throughput of 400,000tpa over a 32-year mine life and showed the Project has robust economics and warrants further development.

The Scoping Study verified the Mahenge Liandu project could produce a coarse flake, high-purity graphite product underpinning a compelling business case to progress commercialisation plans.

The Scoping Study, based on a 400,000tpa throughput, highlighted the following key positive metrics:

  • Producing an average of 49,000tpa of high-quality graphite products for a 32-year mine life
  • Near surface nature of the deposit produced a low 1:1 strip ratio for the life of the mine
  • Low operating cost of US$408/t, based on an average 12.5% TGC life of mine grade
  • Pre-tax IRR of 122% and NPV of US$349m, with a low development capex of US$35m
  • Maximum draw-down during the construction of the project is US$34.9m and the after-tax payback period is 1.2 years

There remains significant scope to further improve returns, with staged expansions as the current mine plan is based on circa 25% of the total resource

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**

Enquiries:

 

Armadale Capital Plc

Paul Johnson, Non-Executive Director (UK)

Tim Jones, Company Secretary

+44 (0) 20 7236 1177

Nomad and broker: FinnCap Ltd

Christopher Raggett / Max Bullen-Smith

+44 (0) 20 7220 0500

Joint Broker: SI Capital Ltd

Nick Emerson

+44 (0) 1483 413500

Press Relations: St Brides Partners Ltd

Isabel de Salis / Juliet Earl

+44 (0) 20 7236 1177

 

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 Indicated and inferred mineral resource estimate of 51.1Mt @ 9.3% TGC, making it 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.

More information can be found on the website www.armadalecapitalplc.com.


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