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Placing to Raise £400,000 to Expand Current 678,000oz Mpokoto Gold Resource
Armadale, the AIM quoted investment company focused on natural resource projects in Africa,has announced a conditional placing of 10,000,000 new ordinary shares of 0.1 pence each in the capital of the Company at a price of 4.00p pence per share to raise gross proceeds of £400,000 with institutional and other investors.
The proceeds of the Placing will be used to further develop the Mpokoto Gold Project in the Katanga Province of the Democratic Republic of the Congo, which has a current resource of 678,000oz at 1.45 g/t Au and is on track to commence production in H1 2016, producing approximately 25,000oz Au per annum over a nine year life of mine. The Company will use the funds primarily to commence a 2,500m drilling programme in late July 2015, which will target newly identified areas located along-strike and down dip from known mineralisation, with the ultimate aim of adding an additional 120,000 to 150,000oz Au at a grade of 1.25 to 1.5g/t Au to the current Project resource.
Justin Lewis, Director of Armadale, said:
“These funds will allow us to complete our upcoming 2,500m drill programme, which we hope will further increase our established 678,000oz resource and in turn further enhance the already favourable economics of the Project, which has a current post-tax net present value of US$55.3 million. The funds will also help advance initial work on the ground at Mpokoto, maintaining momentum as we move to the point of completing our Definitive Feasibility Study. At the same time we expect to be able to finalise our agreement with Africa Mining Contracting Services group to fund, develop, construct and operate Mpokoto. With US$20m proposed financing subject currently to final documentation and a defined development plan focussed on commencing commercial production in H1 2016, the next 6-12 months should be extremely active and we look forward to updating shareholders on these milestone developments in due course.”
Halcyon Corporate Pty Ltd, a company of which Justin Lewis is a director and has an indirect interest in 50 per cent. of its shares, is subscribing for 1,000,000 Placing Shares. The subscription by Halcyon for the Placing Shares is a related party transaction pursuant to the AIM Rules for Companies. The independent directors of the Company consider, having consulted with finnCap, the Company’s nominated adviser, that the terms of the subscription for Placing Shares by Halcyon are fair and reasonable insofar as the Company’s shareholders are concerned.
Following the Placing, Justin Lewis will be interested in 2,064,444 Ordinary Shares equating to 3.9 per cent. of the Company’s issued share capital.
