Armadale Capital Plc Appointment of Marketing Consultant

 
TIDMACP 
 
 

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

21 September 2018

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

Appointment of Marketing Consultant to Negotiate Product Offtake

from Mahenge Liandu Graphite Project

Armadale, the AIM quoted investment company focused on natural resource projects in Africa, is pleased to announce significant progress on the 2018 field work programme underway at its Mahenge Liandu Graphite Project in Tanzania ('Mahenge Liandu' or the 'Project'). With the feasibility study now well advanced and test work underpinning the strong commercial applications of the Project's graphite concentrate, Armadale has appointed an experienced Beijing-based marketing consultant to pursue offtake agreements ahead of an anticipated decision to mine in early 2019.

Overview

 
 
    -- Highly experienced Beijing-based marketing consultant appointed to 

manage offtake agreements and marketing activities in China

Significant commercial experience - previously General Manager of

the Mineral Resources Division of AVIC International Steel Trade

Ltd, one of the largest trading companies in China in the iron,

coal and manganese sector importing into the Chinese market

 
    -- Metallurgical test work indicates that exceptional purity can be 

achieved alongside excellent flake size distribution, making the

product highly amenable to a range of commercial applications

Results from a simple conventional flowsheet produced grades well

above the standard 95% purity for most size fractions

Downstream test work on concentrates showed excellent

expandability particularly of the larger size fractions

Test work to further enhance the purity of the graphite

concentrate showed that acid treatment readily upgrades the

concentrate further to above the 99.95% purity required for the

rapidly expanding Lithium-ion battery market

 
    -- Feasibility Study now well advanced with targeted publication in Q4 

2018:

Reverse Circulation ('RC') drilling programme completed with 18

holes for 951m completed

High-grade coarse flake graphite mineralisation from surface

identified in 17 of 18 holes

Widths of up to 98m intersected from surface with average

thicknesses of 43m

The RC programme is designed to upgrade the current JORC Resource

of 51.1Mt at 9.3% Total Graphitic Carbon ('TGC') in order to

declare a Maiden Reserve that will underpin a long-life low-cost

mining operation

 
    -- Work on environmental and social baseline surveys are nearing 

completion with the environmental impact assessment (EIA), relocation

action plan (RAP) and valuation survey expected to be submitted in

October 2018

Appointment of Marketing Consultant

Armadale has now commenced graphite marketing activities in China with the appointment of Jenny Lee as a consultant to the company. She will be based in Beijing to manage offtake discussions in-country, which will be co-ordinated alongside test-work from the recently completed diamond drilling and metallurgical programmes.

Jenny is the current Managing Director of Jialin International Trading, Hong Kong and is highly experienced in obtaining offtake agreements and managing ongoing sales arrangements in China. Prior to her current role she served as Divisional Manager of the Mineral Resources Division of AVIC International Steel Trade Ltd, one of the largest trading companies in China in the iron, coal and manganese sector importing into the Chinese market.

Metallurgical Test Work

Test work completed on graphite from Mahenge Liandu indicates that exceptional purity can be achieved alongside excellent flake size distribution. The results from a simple conventional flowsheet produced grades well above the standard 95% purity for most size fractions.

 
Flake Size   Weight %  TGC % 
> 500 µm     3.6       97.7 
> 300 µm     20.9      97.8 
> 180 µm     23.6      97.8 
> 150 µm     18.4      98.0 
> 106 µm     13.3      98.2 
> 75 µm      7.9       97.6 
< 75 µm      3.6       95.2 
 
 

Table 1 Flake size distribution and grade of Mahenge Liandu Graphite

Downstream test work on concentrates from the Project also showed excellent expandability, particularly of the larger size fractions. These results suggest Armadale will be able to target a rapidly growing high value potential market; expandability over 200cm3/g is required in many potential applications, with expandability over 400cm3/g considered excellent for most applications.

 
Flake Size   800 Degrees C  1000 Degrees C 
> 500 µm     440 cm3/g      480cm3/g 
> 300 µm     370 cm3/g      420cm3/g 
> 180 µm     300 cm3/g      380cm3/g 
> 106 µm     210cm3/g       230cm3/g 
> 75 µm      165cm3/g       170cm3/g 
< 75 µm      99.65          115cm3/g 
 
 

Table 2 Expandability of Mahenge Liandu Graphite at various flake sizes

Test work conducted to further enhance the purity of the graphite concentrate showed that acid treatment readily upgrades the concentrate further to above the 99.95% purity required for the rapidly expanding Lithium-ion battery market. This market is focused on the medium sized flake sizes from 106 µm to 300 µm sizes where Mahenge Liandu achieved purity up to 99.99%.

 
Flake Size  Purity 
> 500 µm    99.93 
> 300 µm    99.99 
> 180 µm    99.98 
> 106 µm    99.96 
> 75 µm     99.94 
< 75 µm     99.65 
 
 

Table 3 Purity achieved via acid treatment of Mahenge Liandu Graphite Concentrate

RC Drilling Results

Ongoing RC drilling results continue to confirm wide graphite mineralisation from surface with a total of 16 holes for 770m completed. Widths of up to 77m from surface have been intersected. The drilling is targeting high grade near surface mineralisation and 15 of the 16 holes have intersected coarse flake graphite mineralisation from surface. A majority of the holes intersected areas of very high grade mineralisation.

 
HoleID     Easting  Northing  Azi/Dip  MaxDepth  MinFrom  MinTo  MinThickness 
LDRC0050   251818   9035117   325/-60  52.00     0.00     44.00  44.00 
LDRC0051   251783   9035216   325/-60  67.00     0.00     55.00  55.00 
LDRC0052   251744   9035287   325/-60  79.00     0.00     77.00  77.00 
LDRC0053   251717   9935358   325/-60  64.00     0.00     60.00  60.00 
LDRC0054   251683   9035432   325/-60  46.00     0.00     40.00  40.00 
LDRC0055   251851   9035548   325/-60  44.00     0.00     40.00  40.00 
LDRC0056   251882   9035482   325/-60  37.00     0.00     31.00  31.00 
LDRC0057   251918   9035402   325/-60  22.00     0.00     -      No 
                                                                 intercept 
LDRC0058   251946   9035342   325/-60  46.00     0.00     35.00  35.00 
LDRC0059   251978   9035267   325/-60  68.00     0.00     62.00  62.00 
LDRC0060   252012   9035190   325/-60  56.00     0.00     43.00  43.00 
LDRC0061   251929   9035120   325/-60  34.00     0.00     24.00  24.00 
LDRC0062   251848   9035036   325/-60  65.00     0.00     58.00  58.00 
LDRC0063   251511   9035343   325/-60  40.00     0.00     20.00  20.00 
LDRC0064   251531   9035283   325/-60  16.00     0.00     4.00   4.00 
LDRC0065   251563   9035204   325/-60  34.00     0.00     21.00  21.00 
LDRC0064   251358   9035177   325/-60  102       0        98     98 
LDRC0065   251329   9035250   325/-60  79        0        79     76 
 
 

Table 4 RC drilling summary

Permitting

The Environmental and Social impact studies "ESIA" in the field have now been completed. A final report for the work is in progress by specialist consultant Enviromine. After completion of the report, it will be submitted to National Environmental Management Committee for validation and initiation of environmental permit approval.

Furthermore, Armadale contracted Property Matrix Limited to conduct a valuation study covering the 10km2 area of the proposed mining permit application. Their team is onsite conducting those studies and the result will be incorporated into a valuation report. The report will then be submitted to the Government Chief Valuer for approval.

Both the ESIA and Valuation team have been working closely with government authorities and the surrounding communities to ensure compliance with applicable regulations.

Nick Johansen, Director of Armadale said, "Mahenge Liandu continues to exceed all internal expectations - with wide intervals of high-grade, and exceptionally high-grade, mineralisation identified from surface, we are confident that we will be able to demonstrate a long-life, low-cost mining operation in early 2019 when we make a decision to mine. In tandem with our operational advances, it is critical that we develop a marketing function capable of attracting long-term and well-priced offtake agreements for our future product, and today's appointment of our first Beijing-based marketing consultant is central to this objective. Jenny's extensive operational experience in China and proven success in managing commercial sales negotiations makes her ideally suited to represent Armadale in this prospective market.

"Looking at our commercial potential, our scoping study released earlier this year sets the scene for what our project might look like and be capable of - including delivering average production of 49,000tpa of graphite products during a 32-year life of mine at a low operating cost of US$408/t. With these parameters, Mahenge Liandu would deliver a pre-tax IRR of 122% and NPV of US$349m with a low development capex of US$35m, highlighting the significant value accretion potential of this project for investors. We have also consistently demonstrated the high quality of our graphite products, as indicated from recent metallurgical test work, with a high-grade coarse flake product with exceptional purity being produced from relatively simple processing methods. With this in mind we are confident that our new marketing consultant will be able to command attractive pricing arrangements for our premium quality graphite product.

"We look forward to moving through the final phases of our development process and remain focussed on being in a position to make a decision to mine, and begin the construction phase, in 2019."

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**

For further information, please visit the Company's website www.armadalecapitalplc.com, follow Armadale on Twitter @ArmadaleCapital or contact:

 
Enquiries: 
Armadale Capital Plc                      [phone] 
Tim Jones, Company Secretary 
Nomad and broker: finnCap Ltd             [phone] 
Christopher Raggett / Simon Hicks 
Joint Broker: SVS Securities              [phone] 
Tom Curran / Ben Tadd 
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 51.1Mt @ 9.3% TGC. Marking the project 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20180920005633/en/

 
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(END) Dow Jones Newswires

September 21, 2018 02:00 ET (06:00 GMT)