TIDMACP
Armadale Capital Plc / Index: AIM / Epic: ACP / Sector:
Investment Company
20 September 2018
Armadale Capital Plc
('Armadale' the 'Company' or the 'Group')
Interim Results
Armadale, the AIM quoted investment company focused on natural
resource projects in Africa, is pleased to announce its unaudited
interim results for the six months ended 30 June 2018.
Highlights
-- Primary focus on the rapid advancement of 100% owned Mahenge Liandu
Project in Tanzania ('Mahenge Liandu' or the 'Project') ahead of
a
decision to mine in early 2019
-- Highly robust economic fundamentals delivered through Scoping Study in
March 2018:
NPV of US$349 million
IRR of 122%
Payback of 1.2 years
Low capex of US$35 million
-- High concentrate grades of up to 99.1% TGC produced using low-cost
processing methods
-- Excellent flake size distribution and graphite expandability
highlights Mahenge Liandu's amenability to a range of
applications,
including the high growth battery market
-- 25% increase in total resource to 51.1Mt at 9.3% Total Graphitic
Carbon ('TGC'), including 38.7Mt Indicted at 9.3% and 12.4Mt at
9.1%
TGC (post period end)
-- Additional upside through royalty payments available from the Mpokoto
Gold Project in the DRC - sale agreement with potential
buyer
anticipated to be finalised in H2 2018
-- Active growth strategy - committed to identifying and investing in
African resource projects, which offer prospective upside
opportunity
Nick Johansen, Director of Armadale, said: "Our objective to
confirm and highlight the commercial viability of our 100% owned
Mahenge Liandu Graphite Project in Tanzania is now gaining
momentum. The completion of the Scoping Study in April was a
significant milestone and the results, which underpinned the highly
robust fundamentals which could be achieved at Mahenge Liandu, gave
further support to our strategy of fast-tracking work ahead of a
decision to mine in early 2019.
"We believe that there is now a window of opportunity for
Armadale to capitalise on our various competitive advantages at
Mahenge Liandu - made possible by the simple geology of the
project, the well-understood metallurgy, the quality of the
high-grade mineralisation and the relatively straightforward mining
techniques which we anticipate would be amenable to exploit the
deposit. We are confident that this will provide us with a low
capex, low opex mining operation capable of delivering a very high
grade and commercially attractive product which is in high demand
for multiple industrial applications.
"We certainly have the right asset and the right end product,
but we believe we have the right postcode too. Mahenge Liandu is
flanked by some of the world's major new graphite discoveries, and
we see the recent political and legislative developments in
Tanzania, particularly the formation of the new Mining Commission,
as a significant and positive move to reaffirm the countries'
position as one of Africa's premier mining destinations. We are
encouraged by the impact that the Mining Commission has had in just
a few months since its formation, and we view this as a further
signal of Tanzania's general spirit of cooperation when looking to
foreign investment and unlocking strategic natural resources for
the benefit of all stakeholders.
"I look forward to providing further operational and corporate
updates in the coming weeks and months as we look to identify our
optimum route to first production at Mahenge Liandu."
Directors' Statement The six months ended 30 June 2018 has been
exciting and productive for Armadale. The results of the Scoping
Study together with the resource upgrade by 25% continue to prove
that the Mahenge Liandu project is a significant discovery for the
Company.
The Company focus for the last six months has been on Scoping
Study and commencement of the Feasibility Study for its Mahenge
Liandu Graphite Project in Tanzania ('the Project' or 'Mahenge
Liandu') including diamond drilling and infill RC drilling. The
first half of 2018 contained the following highlights:
1. Infill drilling that delivered a resource upgrade to 51.1Mt
at 9.3% Total Graphitic Carbon ('TGC'), including 38.7Mt Indicted
at 9.3% and 12.4Mt at 9.1% TGC
2. Completion of Scoping Study that produced excellent economics
for the project. The key numbers are: Project's NPV of US$349m, IRR
of 122%, payback of 1.2 years and low development costs.
3. The potential of the Mahenge Liandu project led to a
successful GBP963,500 equity raising, as announced on 9 April 2018.
The funds will be used to support the Feasibility Study and provide
for working capital.
4. The appointment of joint broker SVS Securities which secured
the bulk of the April 2018 equity raising.
5. The appointment of Feasibility Study Manager and the
commencement of the Feasibility Study.
6. Commencement of diamond drilling at Mahenge Liandu which is
designed to support the upgrade of the current JORC Resource of
51.1Mt at 9.3% TGC to Probable and Proven Reserves in support of
the on-going Feasibility Study.
The above activities have produced consistently good results
that have confirmed the value of the Mahenge Liandu project.
In mid-2017 the Tanzanian government introduced two mining laws
(the Natural Wealth and Resources (Permanent Sovereignty) and the
Natural Wealth and Resources Contracts (Review and Re-negotiation
of Unconscionable Terms) bills) and dissolved the powers of the
Mining Commissioner. For some time, no new mining licences or
exploration permits were issued. In April 2018, the Tanzanian
government established a new Mining Commission to oversee the
implementation of the new rules. This Commission is now working and
has commenced issuing mining licences, exploration permits and
exploration licences. The Board is now of the firm view that the
Company should continue its exploration activities at Mahenge
Liandu as there are no major risks in obtaining environmental
permit and mining licence.
Apart from the Mahenge Liandu project activities, the Board is
continuing its efforts to complete the sale of its secondary
investment in the Mpokoto Gold project in the DRC.
The Board continues to also look to identify and invest in
African resources projects in accordance with our stated investing
policy.
We closed the period with cash reserves of GBP394,000. With
minimal expenditure this is sufficient to satisfy the Company's
present needs for approximately six months. The Company will need
to raise further capital to implement its plans for the Mahenge
Liandu project. The Directors are actively considering a range of
financing options and are confident of securing the funds necessary
to support the development of Mahenge Liandu.
The directors would like to take this opportunity to thank our
shareholders, employees and partners for their on-going support and
commitment to date in 2018.
For and on behalf of the Board 19 September 2018
FINANCIAL STATEMENTS FOR THE SIX MONTHSED 30 JUNE 2018
Condensed Consolidated Statement of Comprehensive Income For the
six months ended 30 June 2018
Unaudited Six months ended
30 June 2018 GBP'000 30 June 2017 GBP'000
Revenue - -
Cost of sales - -
Gross profit - -
Administrative expenses (218) (252)
Finance costs (7) (14)
Loss before tax (225) (266)
Taxation - -
Loss after tax attributable (225) (266)
to equity
holders of the parent company
Loss after taxation (225) (266)
Other comprehensive income
Items that may be reclassified
to profit or loss:
Exchange differences 14 9
on translating
foreign entities
Total comprehensive loss (211) (257)
attributable to the
equity holders of
the parent company
Pence Pence
Loss per share attributable
to equity holders of the
parent company (note 3) (0.08) (0.11)
Basic and fully diluted
Consolidated Statement of Financial Position At 30 June 2018
Unaudited Audited
30 June 2018 30 June 2017 31 December 2017
GBP'000 GBP'000 GBP'000
Assets
Non-Current assets
Exploration and 2,735 9,056 2,384
evaluation
assets
Property, plant - 14 -
and equipment
Investments 7 7 7
2,742 9,077 2,391
Current assets
Trade and other 121 184 55
receivables
Cash and cash 394 292 65
equivalents
515 476 120
Non current assets 322 - 322
classified
as held for sale
837 476 442
Total assets 3,579 9,553 2,833
Equity and liabilities
Equity
Share capital (note 4) 3,038 2,978 2,980
Share premium 20,570 19,686 19,720
Shares to be issued 286 286 286
Share option reserve 95 94 95
Loan note reserve - 37 -
Foreign exchange reserve 352 1,119 338
Retained earnings (21,707) (15,608) (21,482)
Total equity 2,634 8,592 1,937
Current liabilities
Trade and other payables 161 552 134
Loan notes 453 409 431
614 961 565
Liabilities directly 128 - 128
associated with
non-current assets
held for sale
742 961 693
Non-current liabilities
Long term borrowings 203 - 203
Total liabilities 945 961 896
Total equity and 3,579 9,553 2,833
liabilities
Unaudited Consolidated Statement of Changes in Equity For the
period ended 30 June 2018
Share Capital Share Premium Shares to be Share Option Loan Note Foreign Retained Total GBP'000
GBP'000 GBP'000 Issued GBP'000 Reserve Reserve Exchange Earnings
GBP'000 GBP'000 Reserve GBP'000
GBP'000
Balance 2,946 19,010 286 86 37 1,110 (15,342) 8,133
1
January
2017
Loss for - - - - - - (266) (266)
the
period
Other - - - - - 9 - 9
comprehensive
income
Total - - - - - 9 (266) (257)
comprehensive
loss
for the
period
Issue of 32 737 - - - - - 769
shares
Expenses - (61) - - - - - (61)
of issue
Share - - - 8 - - - 8
based
payment
charges
Total 32 676 - 8 - - - 716
other
movements
Balance 2,978 19,686 286 94 37 1,119 (15,608) 8,592
30
June
2017
Loss for - - - - - (5,911) (5,911)
the
period
Other - - - - - (781) - (781)
comprehensive
loss
Total - - - - - (781) (5,911) 6,692)
comprehensive
loss
for the
period
Issue of 2 34 - - - - - 36
Shares
Share - - - 1 - - - 1
based
payment
charges
Transfer - - - - (37) - 37 -
on
conversion
of loan
notes
Total 2 34 - 1 (37) - 37 37
other
movements
Balance 2,980 19,720 286 95 - 338 (21,482) 1,937
31
December
2017
Loss for - - - - - - (225) (225)
the
period
Other - - - - - 14 - 14
comprehensive
income
Total - - - - - 14 (225) (211)
comprehensive
loss
for the
period
Issue of 58 905 - - - - - 963
shares
Expenses - (55) - - - - - (55)
of issue
Total 58 850 - - - - - 908
other
movements
Balance 3,038 20,570 286 95 - 352 (21,707) 2,634
30
June
2018
The following describes the nature and purpose of each reserve
within shareholders' equity:
Reserve Description and purpose
Share capital Amount subscribed for share
capital at nominal value
Share premium expenses Amount subscribed for share
capital in excess
of nominal value, net of allowable
Shares to be issued Value of share capital to
be issued in connection
with the acquisition of Netcom
Share option reserve Reserve for share options granted
but not exercised
Foreign exchange reserve Gains/losses arising on
re-translating the net
assets of overseas operations
into sterling
Retained earnings Cumulative net gains and
losses recognised
in the statement of comprehensive income
Consolidated Statement of Cash Flows For the period ended 30
June 2018
Unaudited Audited
Six Months ended Year ended
30 June 2018 30 June 31 December 2017
2017
GBP'000 GBP'000 GBP'000
Cash flows from
operating
activities
Loss before taxation (225) (266) (6,177)
Depreciation - 2 2
Unrealised foreign 14 22 -
exchange
differences
Loan note accretion - 6 -
Impairment of - - 5,726
investments
Loan note interest 22 8 44
accrued
Share based payment - 8 9
charge
Shares issued in - 31 68
settlement
of liabilities
(189) (189) (328)
Changes in working
capital
Receivables (67) (24) (36)
Payables 27 57 72
Net cash used (229) (156) (292)
in operating
activities
Cash flows from
investing
activities
Expenditure on (350) (258) (549)
exploration
and evaluation assets
Net cash used (350) (258) (549)
in investing
activities
Cash flows from
financing
activities
Proceeds from issue 938 651 651
of shares
Issue costs (30) (61) (61)
Proceeds from loan - - 200
Net cash from financing 908 590 790
activities
Net increase in cash 329 176 (51)
and cash equivalents
Cash and cash 65 116 116
equivalents
at 1 January 2018
Cash and cash 394 292 65
equivalents
at 30 June 2018
Notes to the unaudited condensed consolidated financial
statements
For the period ended 30 June 2018
1.Incorporation and principal activities
Country of incorporation
Armadale Capital Plc was incorporated in the United Kingdom as a
public limited company on 19 August 2005. Its registered office is
1 Arbrook Lane, Esher, Surrey, KT10 9EG.
Principal activities
The principal activity of the Group during the period was that
of an investment company.
2.Accounting policies
2.1.Statement of compliance
The financial information for the six months ended 30 June 2018
and 30 June 2017 is unreviewed and unaudited and does not
constitute the Group's statutory financial statements for those
periods within the meaning of Section 434 of the Companies Act
2006. The comparative financial information for the year ended 31
December 2017 has been derived from the Annual Report and Accounts,
which were approved by the Board of Directors on 22 May 2018 and
delivered to the Registrar of Companies. The report of the Auditors
on those accounts was unqualified and did not contain any statement
under Section 498 of the Companies Act 2006.
This condensed set of financial statements has been prepared in
accordance with IAS 34 'Interim Financial Reporting' as adopted by
the European Union. This condensed set of financial statements
should be read in conjunction with the annual financial statements
for the year ended 31 December 2017 which have been prepared in
accordance with International Financial Reporting Standards (IFRSs)
as adopted by the European Union.
The accounting policies adopted are consistent with those of the
annual financial statements for the year ended 31 December 2017 as
described in those annual financial statements.
In respect of new financial reporting standards which came into
effect for reporting periods beginning on 1 January 2018, the
Directors consider that their implementation has no material effect
on the financial information presented in this statement.
2.2.Going Concern
The financial statements have been prepared on the going concern
basis as, in the opinion of the Directors, there is a reasonable
expectation that the Group will continue in operational existence
for the foreseeable future.
2.3.Exploration and evaluation assets
These assets are recorded at cost and are amortised over their
expected useful life on a pro rata basis of actual production for
the period to expected total production.
2.4.Investments
Investments are stated at cost less provision for
impairment.
2.5.Non-current assets classified as held for sale
These assets are so classified when they are available for
immediate sale and plans for disposal are in hand. They are stated
at estimated net realisable value.
3.Loss per share
The calculation of basic loss per share is based on a loss of
GBP225,000 (2017, GBP266,000) and on 271,094,748 (2017,
235,679,376) Ordinary Shares, being the weighted average number of
Ordinary Shares in issue during the period.
There is no difference between basic loss per share and diluted
loss per share as the Group reported a loss for the period.
4.Share capital
During the period, the Company placed 58,393,941 Ordinary Shares
in the Capital of the Company to raise GBP964,000 (GBP934,000 after
expenses) with institutional and other investors.
**ENDS**
For further information, please visit the Company's website
www.armadalecapitalplc.com, follow Armadale on Twitter
@ArmadaleCapital or contact:
Enquiries:
Armadale Capital Plc +44 20 7236 1177
Tim Jones, Company Secretary
Nomad and broker: finnCap Ltd +44 20 7220 0500
Christopher Raggett / Max Bullen-Smith
Joint Broker: SVS Securities +44 20 3700 0093
Tom Curran / Ben Tadd
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 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/20180919005426/en/
This information is provided by Business Wire
(END) Dow Jones Newswires
September 20, 2018 02:00 ET (06:00 GMT)
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