Armadale Capital Plc Formal Agreement Reached for the Sale of the non-core Mpokoto Gold Project

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

11 January 2019

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

Formal Agreement Reached for the Sale of the non-core Mpokoto Gold Project

Armadale, the AIM quoted investment company focused on natural resource projects in Africa, is pleased to announce that it has entered into final formal sale agreement with African Royalty Company Pty Limited ("African Royalty") (a related company to Arrow Mining Pty Ltd, "Arrow Mining") for the sale of the Mpokoto Gold Project in the Democratic Republic of Congo ("Mpokoto Project"). This stage has been reached after Arrow Mining and African Royalty completed due diligence and formal terms were finalised and agreed. This agreement now crystallises the value of the Mpokoto Project with a company capable of obtaining the funding to bring the mine into production. The transaction allows Armadale to focus on advancing its primary value driver, the high-grade Mahenge Liandu Graphite Project in Tanzania, whilst ensuring the Company retains exposure to the development upside of the Mpokoto Project.

Sale Terms

Arrow Mining will take over the operations on the Mpokoto Project and is obliged to pay Armadale a 1.5% royalty on gold sales achieved once in production. The Mpokoto Project has a feasibility study based on a 720,000 tpa operation over 4.5 year producing an average of 24,900oz per annum with a substantial sulphide resource that could further extend the mine life.

Sale of the Mpokoto Project under the heads of agreement was conditional upon entry into a formal sale agreement, due diligence and other standard conditions for regulatory approvals and these have now been satisfied.

Further Information

1. Funds from the Mpokoto Project royalty will be used to support development of the high grade Mahenge Liandu Graphite Project in Tanzania, and Armadale will consider other investment opportunities in line with its existing investing policy.

2. The net assets relating to Mpokoto in the 30.6.18 balance sheet (Interim results) were GBP194,000.

3. Armadale had previously entered into a joint venture agreement with Kisenge Mining Pty Ltd ('Kisenge Mining') for the Project. Kisenge Mining had withdrawn from the joint venture agreement which allowed the formal agreement to proceed.

Nick Johansen, Director of Armadale said, "The Board of Armadale is confident that African Royalty and its related parties, who have significant experience of operating in the DRC, represents the best opportunity for Armadale to crystallise the value of the Mpokoto Project and begin receiving returns through the agreed royalty payments on gold sales. We look forward to reporting further news in due course relating to the development of Mpokoto and of our primary value driver, the Mahenge Liandu Project."

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 / Max Bullen-Smith 
Joint Broker: SVS Securities              [phone] 
Tom Curran / Ben Tadd 
Press Relations: St Brides Partners Ltd   [phone] 
Susie Geliher / Juliet Earl 
 
 

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/20190110005600/en/

 
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(END) Dow Jones Newswires

January 11, 2019 02:00 ET (07:00 GMT)