TIDMACP
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 interim
results for the six months ended 30 June 2016.
William Frewen, Chairman of Armadale, said:
"It gives me great pleasure to provide my inaugural statement as
Chairman of Armadale. Joining the Board post period end I am not
best placed to provide commentary on the first half of the year,
but I wanted to take this opportunity to explain why I joined
Armadale at its helm, and where I see the future direction of the
Company.
"My career up to this point has been centred on identifying and
developing interesting and profitable companies, and it is with
this in mind that I was attracted to Armadale with a mandate to
drive shareholder value. There are undoubtedly assets with enormous
strategic value which are as yet undeveloped in Africa - and I
believe Armadale now has the team in place to isolate these, and
importantly, execute mining opportunities in a cost-effective and
efficient manner in line with the Company's investing policy.
"Central to the Company's immediate future is the Mahenge Liandu
Graphite Project in south-east Tanzania, which was acquired post
period end. This prospect represents an exciting new investment for
Armadale, drawing upon the Company's understanding of the African
resource sector, delivering a compelling investment opportunity in
the graphite market in order to capitalise on the strong wider
macroeconomic outlook for graphite, which is a key element in the
burgeoning global battery market. The potential for commercial
grade graphite has led the Board to determine that the Mahenge
Liandu Graphite Project will increasingly become a focus for
Armadale.
"I look forward to providing more news on our investments,
particularly regarding the exploration programme now underway at
Mahenge Liandu, together with news relating to our additional
investments in due course. I would like to thank both our new and
existing shareholders, and reiterate my enthusiasm for Armadale's
evolving investment story and the tangible opportunities this
presents for shareholders."
Directors' Statement
As an investment company, Armadale is constantly looking to
identify value accretive assets or businesses, and this strategy
was developed towards the end of the period with the acquisition of
the Mahenge Liandu Graphite Project ('Mahenge Liandu'). The
acquisition of this asset, which was completed post period end,
prompted a restructuring of the Board, firstly through the
appointment of our new Non-Executive Chairman William Frewen,
followed by the appointment of Mr Steve Mahede as a Non-Executive
Director, who brings with him exceptional industry experience of
resource development projects in Africa, particularly Tanzania.
Concurrently with Steve's appointment, Dr Andrew Tunks resigned as
Non-Executive Director to pursue a full time role elsewhere, and we
thank him for his valuable contribution. Armadale's former
Chairman, Peter Marks, has become a Non-Executive Director, and it
is expected that his, as well as Justin Lewis's, corporate
experience will be retained during this period of transition.
Whilst excitement regarding Mahenge Liandu was building towards
the end of the period, the main focus for the majority of the
period was the Mpokoto Gold Project located in the south-west of
the Democratic Republic of the Congo ('Mpokoto'). The key elements
of the Definitive Feasibility Study ('DFS'), which forms the basis
of the mining plan and which is an essential requirement ahead of
making an investment decision, are now largely complete.
Whilst we have undoubtedly added significant tangible value to
Mpokoto, and distinguished it as an attractive development asset,
the Board are cognisant of the deceleration of activities on site
whilst we try to finalise financing discussions with potential
partners, African Mining Contracting Services Group ('A-MCS').
These discussions are proving lengthy and to date, unrewarding, and
so the Board is assessing alternative potential commercial
arrangements through which Armadale could retain an interest in
Mpokoto, but would have less exposure to the execution risk and
potential dilution at Group level, which may be unavoidable if we
were to finance the development of Mpokoto independently.
The Board is also seeking to divest Armadale's interest in Mine
Restoration Investments Ltd, as well as some of its portfolio of
smaller quoted and non-core investments. Nevertheless, our focus
remains on identifying and investing in African resources projects
in accordance with our stated investing policy.
Whilst these discussions and divestment plans are on-going,
Armadale's focus is set on graphite, and our newly acquired Mahenge
Liandu Graphite Project. Mahenge Liandu is situated in a highly
prospective zone with proven coarse flake, high grade graphite
found in adjacent sites. The potential of this prospect led to a
successful GBP825,000 equity raising, as announced on 23 June 2016,
to develop this project further and commence the next phase of the
drilling programme. To date, electromagnetic surveys together with
geological mapping completed by the Company have indicated a
substantial potential resource. If all goes to schedule a JORC
resource is possible in the near future, which can validate further
development work and is a necessary precursor to production.
The publication of a JORC Mineral Resource Estimate will provide
investors with a tool through which to value the Company compared
to other graphite companies, including neighbouring peers and those
listed on the ASX.
The directors would like to take this opportunity to thank
Armadale's shareholders, its employees and partners for their
on-going support and commitment. We look forward to keeping the
market updated through this next, exciting phase of our
development.
For and on behalf of the Board
21 September 2016
FINANCIAL STATEMENTS
FOR THE SIX MONTHSED 30 JUNE 2016
Condensed Consolidated Statement of Comprehensive Income
For the six months ended 30 June 2016
Unaudited Audited
Six months ended Year Ended
30 June 30 June 31 December
2016 2015 2015
GBP'000 GBP'000 GBP'000
Revenue - - -
Cost of sales - - -
Gross profit - - -
Administrative expenses (350) (307) (616)
Impairment of investments 71 - (316)
Finance costs - (58) (59)
Loss before tax (279) (365) (991)
Taxation - - -
Loss after tax attributable to equity (279) (365) (991)
holders of the parent company
Pence Pence Pence
Loss per share attributable
to equity holders of the
parent company (note 3) (0.29) (1.05) (1.91)
Basic and fully diluted
Loss after taxation (279) (365) (991)
Other comprehensive income
Items that may be reclassified
to profit or loss:
Exchange differences on translating 202 - 93
foreign entities
Total comprehensive loss (77) (365) (898)
attributable to the
equity holders of the parent company
Consolidated Statement of Financial Position
At 30 June 2016
Unaudited Audited
30 June 2016 30 June 31 December 2015
2015
GBP'000 GBP'000 GBP'000
Assets
Non-Current assets
Exploration and evaluation 5,591 4,074 4,923
assets
Property, plant 20 28 24
and equipment
Investments 45 30 56
5,656 4,132 5,003
Current assets
Investment 257 689 323
Trade and other receivables 423 133 317
Cash and cash equivalents 614 26 161
1,294 848 801
Total assets 6,950 4,980 5,804
Equity and liabilities
Equity
Share capital (note 4) 2,876 2,779 2,824
Share premium 17,559 15,174 16,585
Shares to be issued 286 286 286
Share option reserve 182 1,610 182
Foreign exchange reserve 295 - 93
Retained earnings (14,830) (15,353) (14,551)
Total equity 6,368 4,496 5,419
Current liabilities
Trade and other payables 582 342 340
Loan notes - 142 45
582 484 385
Total equity and liabilities 6,950 4,980 5,804
Unaudited Consolidated Statement of Changes in Equity
For the period ended 30 June 2016
Share Share Premium Shares to be Share Option Foreign Retained Total
Capital GBP'000 Issued Reserve Exchange Earnings
GBP'000 GBP'000 GBP'000 Reserve GBP'000 GBP'000
GBP'000
Balance 2,563 14,808 286 1,610 - (14,988) 4,279
1
January
2015
Loss for - - - - - (365) (365)
the
period
Total - - - - - (365) (365)
comprehensive
loss
for the
period
Issue of 216 397 - - - - 613
shares
Expenses - (31) - - - - (31)
of issue
Total 216 366 - - - - 582
other
movements
Balance 2,779 15,174 286 1,610 - (15,353) 4,496
30
June
2015
Loss for - - - - - (626) (626)
the
period
Other - - - - 93 - 93
comprehensive
income
Total - - - - 93 (626) (533)
comprehensive
loss
for the
period
Issue of 45 1,514 - - - - 1,559
Shares
Expenses - (103) - - - - (103)
of issue
Release - - - (1,428) - 1,428 -
on
expiry
of
options
Total 45 1,411 - (1,428) - 1,428 1,456
other
movements
Balance 2,824 16,585 286 182 (93) (14,551) 5,419
31
December
2015
Loss for - - - - - (279) (279)
the
period
Other - - - - 202 - 202
comprehensive
income
Total - - - - 202 (279) (77)
comprehensive
loss
for the
period
Issue of 52 1,074 - - - - 1,126
shares
Expenses - (100) - - - - (100)
of issue
Total 52 974 - - - - 1,026
other
movements
Balance 2,876 17,559 286 182 295 (14,830) 6,368
30
June
2016
The following describes the nature and purpose of each reserve
within shareholders' equity:
ReserveDescription and purpose
Share capital Amount subscribed for share capital at nominal
value
Share premium Amount subscribed for share capital in excess of
nominal value, net of allowable expenses
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 2016
Six Months ended
30 June 2016 30 June 2015 31 December 2015
GBP'000 GBP'000 GBP'000
Cash flows from operating
activities
Loss before taxation (279) (365) (991)
Depreciation 6 6 13
Unrealised foreign 8 (2) 49
exchange
differences
Loan note accretion - 34 34
Impairment of investments (71) - 316
Loss on sale of 85 - 24
investments
Loan note interest - 1 2
accrued
Shares issued in 110 - 165
settlement
of liabilities
(141) (326) (388)
Changes in working
capital
Receivables (240) 50 -
Payables 327 189 60
Net cash used (54) (87) (328)
in operating
activities
Cash flows from investing
activities
Expenditure on (560) (478) (1,158)
exploration
and evaluation assets
Purchase of listed - - (8)
investments
Sale of listed 62 - 8
investments
Net cash used (498) (478) (1,158)
in investing
activities
Cash flows from financing
activities
Proceeds from issue 1,105 404 1,503
of shares
Issue costs (100) (31) (133)
Proceeds from issue - 200 120
of loan notes
Repayment of loan notes - (220) (81)
Net cash from financing 1,005 353 1,409
activities
Net increase in cash 453 (212) (77)
and cash equivalents
Cash and cash equivalents 161 238 238
at 1 January 2016
Cash and cash equivalents 614 26 161
at 30 June 2016
Notes to the unaudited condensed consolidated financial
statements
For the period ended 30 June 2016
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
55 Gower Street, London WC1E 6HQ.
Principal activities
The principal activity of the Group during the period was that
of an investment company.
2.Accounting policies
1.Statement of compliance
The financial information for the six months ended 30 June 2016
and 30 June 2015 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 2015 has been derived from the Annual Report and Accounts,
which were approved by the Board of Directors on19 May 2016 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 2015 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 2015 as
described in those annual financial statements.
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.
3.Loss per share
The calculation of basic loss per share is based on a loss of
GBP279,000 (2015, GBP365,000) and on 95,438,033 (2015, 34,819,494)
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.
Share capital
During the period, the company placed a total of 45,000,000
Ordinary Shares in the capital of the Company to raise GBP970,000
(GBP870,000 after expenses) with institutional and other
investors.
During the period, GBP46,243 of convertible loan notes including
accrued interest was converted into 1,541,434 Ordinary Shares in
the capital of the company.
During the period, payment was made for services costing
GBP110,000 supplied to the Company by the issue of 6,250,000
Ordinary Shares in the company.
For further information, please visit
www.armadalecapitalplc.com, follow us on Twitter @ArmadaleCapital,
or contact:
**S**
Enquiries:
Armadale Capital Plc +44 20 7233 1462
William Frewen, Chairman +44 20 7233 1462
Charles Zorab, Company Secretary
Nomad and broker: finnCap Ltd +44 20 7220 0500
Christopher Raggett / Simon Hicks
Joint Broker: Beaufort Securities Limited +44 20 7382 8300
Jon Belliss
PR & IR: 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. The project is located in a highly prospective
region with proven coarse flake, high grade graphite resources -
ASX listed Kibaran and Black Rock have both identified and are
developing significant proven and valuable graphite projects
immediately adjacent to Mahenge Liandu. A mineralised trend about
1.6km in strike length and up to 500m wide has been identified at
the project, which remains open at depth. Armadale geologists have
mapped and sampled the graphite schist, with results from seven
previous samples ranging from 12.8% - 24.0% TGC. Exploration
drilling completed at the project in December 2015 has further
confirmed the mineral potential of the license area, with results
including 10mt at 6.54% TGC, 24mt at 12.9% TGC and 5mt at 21.5%
TGC. Armadale is targeting a maiden resource estimation in late
2016.
In addition, Armadale is developing of the Mpokoto Gold project
in the Democratic Republic of the Congo, in which it owns an 80%
interest. Mpokoto has a current Total Mineral Resource of 678,000oz
gold ('Au') from 14.58mt @ 1.45g/t Au at a cut-off grade of 0.5g/t.
The company has recently announced the results of a feasibility
study for Mpokoto which demonstrated a pre-tax net present value of
US$43m based upon a discount rate of 5% and a gold price of
US$1,250/oz. The project is subject to four mining licenses which
are valid for an initial term of 30 years from 30 September
2014.
Armadale has a portfolio other quoted investments.
More information can be found on the website
www.armadalecapitalplc.com.
View source version on businesswire.com:
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(END) Dow Jones Newswires
September 22, 2016 02:00 ET (06:00 GMT)
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