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Mpokoto Gold Project – Update on exploration and expanded resource definition
Armadale, the AIM-quoted investment company focused on natural resource projects in Africa, has provided an update on the ongoing development and expansion of its Mpokoto Gold Project in the Democratic Republic of the Congo, with a current mineral resource of 678,000 oz and which remains on track to commence production in H1 2016.
Overview:
– Extensive soil sampling programme undertaken over the last three months, which has identified a number of new gold anomalies indicating possible strike extensions to the known gold mineralisation
– Ongoing exploration programme to explore a number of drill ready targets that have been identified
– Intention to form a strategic alliance with local drilling company Alpha Drilling (“Alpha”), which would supply two diamond drill rigs for exploration over Armadale’s extensive Kisenge licence area
– Further drilling planned for 2016 to test oxidised portion of Mpokoto ore body as well as deeper exploration around hole 64, which encountered significantly higher grades in a mafic host rock
– Additional metallurgical testwork underway to further optimise the identified two-phased processing routes for gold recovery (as announced on 3 August 2015) – results expected shortly
– Metallurgical results to support finalisation of Definitive Feasibility Study (‘DFS’) – targeted by year end 2015
– Targeting approximately 25,000oz Au per annum over initial nine year life of mine with projected cash costs of US$647/oz
– Current Net Present Valuation of US$32.3m based on a forecast gold price of US$1,100/oz
– Continued constructive engagement with A-MCS with aim to update financing agreements this year
Andrew Tunks, Director of Armadale, commented, “Mpokoto continues to advance towards commercial production. We are pleased to be able to report positive results from the extensive soil sampling programme undertaken over the last three months to further expand and advance the Project. The programme has identified a number of further drill targets to add to existing targets that have the potential to significantly grow the oxide resource at Mpokoto. We are very pleased to announce the intention to enter into a strategic alliance with Alpha. This deal will result in us having permanent access to two drill rigs at very competitive rates, which importantly can be operated throughout the wet season. Combined, these initiatives allow the Company to target an expanded resource base of more than 1 million ounces of gold.
“Furthermore, the additional metallurgical testwork which we commenced in September 2015 is nearing its conclusion. We believe the results from this will favourably impact the projected economics of the Project, which are already extremely competitive with estimated cash costs of US$647/oz and an NPV of US$32.3m. Once the results for this testwork have been received, we will work to finalise the DFS before the end of the year, alongside our continued constructive engagement with A-MCS to conclude the financing agreement, which will bring with it up to US$20 million of financing. We look forward to updating shareholders on these milestones in the coming weeks and months ahead.”
Further Information
The strategic alliance between Armadale and Alpha, which is a Botswana based drilling organisation with operations in the DRC and extensive experience in sub-Saharan Africa, is intended to allow the supply of two diamond drill rigs on a permanent basis for the exploration of Armadale’s Mpokoto Gold Project and the wider Kisenge licence area, where a number of new drill ready targets have been identified.
It is proposed that the rigs will be available on a cost plus basis and the alliance will enable the Company to explore the more than 900 sq kilometres of the Mpokoto Gold Project and its Kisenge licences during both the wet and the dry season. Alpha have sourced two new drilling rigs in the DRC and will have a large supply of the necessary consumables, such as drill bits, rods and lubricants, in country. Mobilisation to site is expected in early 2016.
The initial focus of the alliance will be the drilling programme designed to test extensions to the oxidised (weathered) portions of the Mpokoto ore body where new sampling has identified possible extensions of the mineralisation. In addition, several deeper holes will test the high-grade mineralisation previously identified around hole 64. Recent drilling of a water bore for hydrological investigations associated with the current feasibility study encountered substantial free gold identified by hand panning of the drill spoil in this area, assays for this hole are pending.
Over the last 3 months the Company has conducted an extensive soil sampling programme in the vicinity of the Mpokoto Gold Project. The soil sampling programme consisted of the taking of several hundred samples from soils that were then hand panned by the Company’s exploration staff with free gold particles in the samples being counted. This method, which is a very economic exploration method, was originally used to identify the Mpokoto Project itself, which now has indicated and inferred JORC resource of 678,000 ounces.
A number of new gold anomalies and extensions to the known gold mineralisation were identified by the programme. These new targets will be investigated in the drilling programme to be conducted by Alpha. The near term objective is to expand its resource base to more than 1 million ounces and to define an initial mineral reserve prior to the commencement of construction of a 750,000 tonne per annum plant as outlined in the Expanded Scoping Study.
Armadale continues to work closely with Africa Mining Contracting Services to fund, develop, construct and operate Mpokoto, and the Company expects to make further updates in this regard before the end of December 2015.
