REG-Armadale Capital Plc Mahenge Graphite Project Update

Armadale CapitalAnnouncement

13/10/2020 10:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20201013:nBw84ThWma


Mahenge Graphite Project Update

 

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

13 October 2020

Armadale Capital Plc

(‘Armadale’ or ‘the Company’)

Mahenge Graphite Project Update

Armadale Capital plc (LON: ACP) the AIM quoted investment group focused on
natural resource projects in Africa, is pleased to provide an update on its
100%-owned Mahenge Graphite Project (‘Mahenge’).

HIGHLIGHTS


 * Front End Engineering Design (‘FEED’) of processing plant by international
engineering, procurement and construction company (‘EPCM’) due to commence
shortly upon selection of preferred construction group

 * Selection process at an advanced stage, with suitable strategies for the
development and construction of Mahenge already identified following a
detailed consultation process with a range of potential mining contractors

 * Ready to initiate follow-up and final metallurgical test programme to enable
the detailed selection of the processing plant equipment

 * National Environmental Management Council (‘NEMC’) site visit completed -
one of the penultimate steps required for granting of the Environmental Permit
(ESIA approval) to facilitate the granting of the mining licence

 * Continue to advance ongoing project financing negotiations for mine
construction of Stage 1 of Mahenge’s 60,000 tpa capacity

Armadale Chairman, Nick Johansen, commented:

“We are delighted to announce another crucial step forward in the
development of Mahenge. Appointing our chosen EPCM will mark the commencement
of the next preparatory phase of mine construction and take us another step
closer to production. In addition, the completion and submission of the
Environmental and Social Impact Assessment (ESIA) is one of the final
necessary components in the Mining Licence process and I would like to thank
all those involved for their efforts in completing this important piece of
work in such a short time frame. Receipt of a Mining Licence will be one of
the final and most important de-risking milestones for the Project and we look
forward to being able to update further on this as we work with NEMC to
conclude the final licencing components.

“Alongside this, as previously indicated we continue to be positively
engaged in development funding options. Testament to Mahenge’s highly
compelling project economics we have received strong interest, and we are
naturally committed to securing the best option for our stakeholders. We will
update shareholders on further developments as soon as we are in a position to
do so.

“With project financing, a mining licence and commencement of mine
construction all imminent, Mahenge, and indeed Armadale, is on the cusp of
transformation. Ultimately, Mahenge’s value potential is clear, and it is
our responsibility and focus to convert this into meaningful returns for our
stakeholders. To deliver on this, we have devised a staged development plan
giving a fast-tracked, low-cost route to production. This is truly an exciting
time of development.”

Further Detail

Armadale has continued to focus on fast tracking Mahenge to production. The
Company has been engaging with potential international manufacturing and
construction companies as to their suitability and capability to complete the
graphite processing plant in Tanzania.

A group of international companies have been short-listed with final selection
imminent, following which work will commence on the FEED component. The first
stage of the work will be for the selected EPCM to complete a metallurgical
test programme to enable the detailed selection of the processing plant
equipment. Metallurgical testing has confirmed that Mahenge can produce high
quality, high purity graphite, with conventional technology achieving
consistent purity of above 97% TGC, some of the highest grades in the sector,
with identified target markets; a large proportion of concentrates in the
medium size fractions are confirmed to be ideally suited to the battery market
whilst coarser grind sizes can retain a larger proportion of larger flake
sizes, suited to the expandable and graphite foil markets.

Throughout the Project’s development, Armadale has continued to engage with
potential international mining contractors to develop strategies for the
construction and mining requirements of the Project. This has assisted
Armadale in developing a fit for purpose approach in the development of the
Project from construction to production operations.

Positive progress also continues to be made on finalising the Company’s
Mining licence application. The ESIA application for the Project was submitted
by Tanzanian based, registered and certified environmental consultants to the
NEMC in Tanzania in September 2020. A site visit has since been completed by
NEMC, Armadale staff and the Company’s lead consultant as part of the ESIA
application. The presentation of key findings and recommendations by NEMC and
any satisfactory addressing of these findings in a final submission will lead
to the environmental certification being completed. The completed
certification is the final component required for the granting of the Mining
licence.

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                     +44 (0) 20 7236 1177  
 
                                                              
 Nick Johansen, Non-Executive Director                          
 
                                                              
 Tim Jones, Company Secretary                                   
 
                                                              
                                                                
 Nomad and broker: finnCap Ltd            +44 (0) 20 7220 0500  
 
                                                              
 Christopher Raggett / Teddy Whiley                             
 
                                                              
                                                                
 Joint Broker: SI Capital Ltd             +44 (0) 1483 413500   
 
                                                              
 Nick Emerson                                                   
 
                                                              
                                                                
 Press Relations: St Brides Partners Ltd  +44 (0) 20 7236 1177  
 
                                        
                     
 Charlotte Page / Beth Melluish                                 


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 59.48Mt @ 9.8% TGC, making it one of the largest
high-grade resources in Tanzania. The project has been established as a large,
long life graphite deposit capable of producing high quality graphite
concentrate for the rapidly emerging EV market. Metallurgical test work has
confirmed that Mahenge can produce high quality, high purity graphite, with
conventional technology achieving consistent purity of above 97% TGC, with
99.99% TGC achievable, making its product suitable for both the high growth
EV/battery market and the expandable and graphite foil markets.

An optimised Definitive Feasibility Study (‘DFS’) established that US$985m
pre-tax cashflow could be generated from an initial 15-year mine life,
utilising just 25% of the resource, which remains open in multiple directions
offering significant further upside. Based on average annual production of
large flake high-purity graphite of 109ktpa, this led to an estimated pre-tax
NPV of US$430m and IRR of 91%. Armadale intends to deliver low cost,
fast-tracked production through a staged ramp-up plan, beginning with
60,000tpa graphite concentrate production for the first three years (Stage 1)
before increasing to a life of mine average of 109,000tpa (Stage 2). Stage 1
has a low capital cost estimate of US$39.7m, including a contingency of
U$S4.1m or 15% of total direct capital cost with 1.6 year (after tax) payback
period from first production based on an average sales price of US$1,112/t.
Stage 2 expansion is to be funded from cashflow.

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
(https://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.armadalecapitalplc.com&esheet=52305388&newsitemid=20201013005500&lan=en-US&anchor=www.armadalecapitalplc.com&index=1&md5=3ee661351249789282d8359f9cab4561)
.



View source version on businesswire.com:
https://www.businesswire.com/news/home/20201013005500/en/
(https://www.businesswire.com/news/home/20201013005500/en/)

Armadale Capital Plc


Copyright Business Wire 2020