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 +44 20 7236 1177
Tim Jones, Company Secretary
Nomad and broker: finnCap Ltd +44 20 7220 0500
Christopher Raggett / Simon Hicks
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/20180920005633/en/
This information is provided by Business Wire
(END) Dow Jones Newswires
September 21, 2018 02:00 ET (06:00 GMT)
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