Armadale Capital Plc Armadale agrees to sell non-core Mpokoto Project

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

12 January 2018

Armadale Capital Plc ('Armadale' or 'the Company')

Armadale agrees to sell non-core Mpokoto Project

Armadale, the AIM quoted investment company focused on natural resource projects in Africa, is pleased to announce that it has entered into a heads of agreement ('HOA') with Weghsteen Capital Advice SA ('WCA') to sell its interest in the Mpokoto Gold Project in the Democratic Republic of Congo ('Mpokoto') for total potential consideration of US$562,500 and a 1.5% royalty on gold produced. WCA is acting on behalf of Radismore Limited ('Radismore'), an investment vehicle incorporated under BVI law, which is fully funded and committed to starting gold production at Mpokoto within two years. The HOA is subject to execution of a formal binding agreement, which is expected Q1 2018.

Overview

 
 
    -- Sale of Mpokoto for a total consideration of US$562,500 will be 

payable in cash and completed in three stages:

US$75,000 on signing the purchase contract;US$187,500 within 12 months of signing; andUS$300,000 on commencement of production

 
    -- The proposed agreement enables Armadale to maximise the value it 

receives for Mpokoto whilst benefiting from future gold production

through a 1.5% royalty

 
    -- Sale of non-core investment asset enables Armadale to focus on fast 

tracking the Mahenge Liandu Graphite Project ('Mahenge') - funds from

Mpokoto will be used to support development - and consider other

investment opportunities in line with the Company's existing investing

policy

 
    -- Agreement strengthens Armadale's strategic investment portfolio and 

near-term production potential - Radismore is committed to advancing

Mpokoto into gold production within two years, whilst feasibility

studies at Mahenge in 2018 support a decision to mine being made in

the near term

Nick Johansen, Director of Armadale said, " We are pleased to have secured this strategic sales agreement and believe that Radismore and its associates have the necessary funds and skill set to advance Mpokoto into production and unlock the asset's value potential. Crucially, we will retain an interest in Mpokoto through a royalty without the burden of development and production cost. This strategic interest in turn means that we can concentrate our resources on developing the Mahenge Liandu Graphite project in Tanzania, which offers near term development opportunity with multiple value accretive milestones expected this year.A drilling programme aimed at significantly increasing the size of the deposit is planned for Q2 2018, whilst the results of a scoping study are due Q1, and a feasibility study is expected to commence thereafter with the objective of reaching a decision to mine in the near term. We are very excited for the year ahead and look forward to updating shareholders on these exciting developments and the finalisation of the sale."

Further Information

Under the terms of the HOA, Armadale has agreed to sell its 80% interest in Mines d'Or de Kisenge sarl ('MDDK'), which through Kisenge Limited ('Kisenge'), a wholly owned subsidiary of Armadale, holds Mpokoto. MDDK is owned 80% by Kisenge and 20% by Enterprise Miniere de Kisenge-Manganese sarl ('KMC'), a Congolese government owned entity.

Prior to this HOA, Armadale had previously entered into a joint venture agreement with Kisenge Mining Pty Ltd ('Kisenge Mining') for Mpokoto. Kisenge Mining has agreed to withdraw from the joint venture agreement to allow the new HOA to proceed.

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                        [phone] 
Tim Jones, Company Secretary 
Nomad and broker: finnCap Ltd               [phone] 
Christopher Raggett / Simon Hicks 
Joint Broker: Beaufort Securities Limited   [phone] 
Jon Belliss 
Press Relations: St Brides Partners Ltd     [phone] 
Susie Geliher / Charlotte Page 
 
 

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 40.9Mt @ 9.41% TGC. At least 32Mt of this resource has an average grade of 10.47% TGC, 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

View source version on businesswire.com:http://www.businesswire.com/news/home/20180111005750/en/

 
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(END) Dow Jones Newswires

January 12, 2018 02:00 ET (07:00 GMT)