TIDMACP
Armadale, the AIM quoted investment company focused on natural
resource projects in Africa, is pleased to announce the results of
the Scoping Study completed by BatteryLimits on the Mahenge Liandu
Graphite Project in Tanzania ('Mahenge' or the 'Project'), which
demonstrates highly robust and compelling economics.
Overview
-- Scoping study completed at Mahenge on a 400,000 tpa throughput,
producing an average of 49,000tpa of high quality graphite
products
during a 32 year life of mine
-- The Project has a low operating cost of US$408/t and is based on an
average life of mine grade of 12.5% Total Graphitic Carbon
('TGC')
-- Results deliver a pre-tax IRR of 122% and NPV of US$349m with a low
development capex of US$35m
-- The maximum drawdown during the construction of the Project is
US$34.9m and the after-tax payback period is 1.2 years
-- Average basket price used in the Scoping Study (US$1,271 / t)
considered very conservative and allows for significant
upward
improvements as potential off take agreements negotiated
-- The deposit is one of the highest grade large flake deposits globally
after the recent upgrade to 51.1Mt at 9.3% TGC, including
38.7Mt
Indicted at 9.3% and 12.4Mt Inferred at 9.1% TGC - represents a
25%
increase from the previous 40.9Mt inferred resource at 9.41%
TGC
-- There remains significant scope to further improve returns, with
staged expansions as the current mine plan is based on
approximately
25% of the total resource
-- Results to feed into a feasibility study to progress the Project to a
decision to mine early in 2019 - in the interim Company will
commence
negotiations with identified strategic funders and offtake
partners.
Nick Johansen, Director of Armadale said: "We have long held
confidence in the commercial potential and economic value of
Mahenge and the results of this Scoping Study greatly reinforces
this view. The Project's NPV of US$US349m is significant,
especially when compared to our current market cap of GBP5m. With
an IRR of 122%, 1.2 year payback and low development costs, we
firmly believe that Mahenge is an attractive asset for development.
Crucially, the Scoping Study was limited to just 25% of the
Project's current resource, which forms Stage 1 of a planned staged
development programme. Accordingly, with an upgrade in throughput
there is significant potential to improve the Project economics
even further. Our next steps will now be to commence a definitive
feasibility study so that we can advance Mahenge to a decision to
mine early in 2019."
Dave Pass, Scoping Study Manager said: "The results of the
Scoping Study confirm the combination of high graphite feed grade
and coarse flake high purity graphite product, delivering robust
project economics and warranting progress to the next phase of
feasibility studies. Given the size of the resource it would be
expected that there remains significant room for further project
optimisation."
Study Design Parameters
The Mahenge Scoping study was based on a throughput of
400,000tpa over a 32 year mine life from the start of construction.
The deposit has a low average strip ration of 1:1 for the life of
the mine and a very low operating cost of US$408/t. A summary of
the parameters is shown in Table 1.
Table 1 Scoping Study Parameters
Design Parameters Units Value
Nominal concentrate production at 12.5% TGC kt/y 49
Nominal strip ratio Waste : Ore 1:01
Graphite average basket price (US$ /t, real) 1,271
Project Life (including construction) (years) 32
Financial Results
The Project has a pre-tax IRR of 122% based on a relatively low
capital cost of US$35m. The after-tax payback period is expected to
1.2 years.
Financial Parameters Units Value
Discount Rate % 10%
Exchange Rate USD : AUD 0.75
Capital Cost (US$ m, real) 35
IRR - after tax (%, real) 89%
NPV @ 10.0% - after tax (US$ m, real) 239
Payback Period - after tax, from 1st ore processed (Years) 1.2
Cash Costs (FOB DES) (US$/t, real) 408
IRR - before tax (%, real) 122%
NPV @ 10.0% - before tax (US$ m, real) 348.7
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 +44 20 7236 1177
Tim Jones, Company Secretary
Nomad and broker: finnCap Ltd +44 20 7220 0500
Christopher Raggett / Simon Hicks
Press Relations: St Brides Partners Ltd +44 20 7236 1177
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 Indicated and inferred mineral resource estimate of
51.1Mt @ 9.3% TGC, making it 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:https://www.businesswire.com/news/home/20180327005553/en/
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(END) Dow Jones Newswires
March 27, 2018 03:15 ET (07:15 GMT)
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