TIDMACP
Armadale Capital Plc / Index: AIM / Epic: ACP / Sector:
Investment Company
15 May 2019
Armadale Capital Plc ('Armadale' or 'the Company')
Mahenge Liandu Project DFS Update
Armadale Capital plc (LON: ACP), the AIM quoted investment
company focused on natural resource projects in Africa, is pleased
to provide a progress update in respect of its Mahenge Liandu
Graphite Project's ('the Project') Definitive Feasibility Study
('DFS).
Readers are advised to review the Company's detailed update in
respect of the DFS which was provided within its announcement dated
16 April 2019, and which may be viewed through the following link:
https://polaris.brighterir.com/public/armadale_capital/news/rns/story/rn0k02w
Highlights
-- Advancing the DFS - on track to complete Q4 2019
-- Appointed leading international laboratory Bureau Veritas to conduct
the metallurgical test work and support previous work which
demonstrated excellent flake size distribution and exceptional
purity
-- Metallurgical test work for product quality assessment on schedule for
completion in June 2019 and downstream test work results
confirming
product quality in July 2019
-- Discussions with third parties regarding project financing progressing
-- Strengthening market fundamentals for higher purity higher quality
graphite concentrates
Nick Johansen, Director of Armadale said: "I am pleased to
confirm that further steps have been made towards the timely
completion of the DFS including product quality assessment and
metallurgical testing.Previous test work in this regard
demonstrated excellent flake size distribution and exceptional
purity and we are optimistic that similar outcomes can be achieved
from this latest round of test work.
"Notably, recent graphite market developments point to
increasing values being placed on higher purity higher quality
graphite concentrates.As an example, Black Rock Resources
(ASX:BKT), which owns the neighbouring Mahenge Project, announced
binding sales agreements at materially higher than benchmark prices
for higher purity concentrates and significantly higher than the
$US1272/t used in our March 2018 Mahenge Liandu Scoping
Study.Should Mahenge Liandu secure higher average price binding
sales agreements, based on enhanced product quality, this will
positively impact the product fundamentals including NPV and IRR
calculations.These were already robust: NPV of US$349m and IRR of
122%.
"In line with strong market fundamentals, the Project is
gathering considerable interest.Our discussions with third party
organisations to date demonstrate a clear interest in providing
project level financing, which we anticipate will fall into place
in a timely manner, given the completion of our DFS schedule for
this year."
Further Details
Leading international laboratory Bureau Veritas has been
appointed to conduct the metallurgical test
work as part of the DFS at the Company's Mahenge Liandu Graphite
Project. The results of metallurgical test work for product quality
are scheduled for delivery to the Company in June 2019 in line with
expectations, while downstream test work results confirming product
quality are expected in July 2019, also in line with
expectations.
Product quality wide diameter drilling has previously been
completed to create representative concentrates and a metallurgical
test work programme has been designed to provide input to the
process flow sheet by determining recovery rates, flake size
distribution and final product purity.
Accordingly, the Company has delivered a shipment of 1.6 tonnes
of diamond core to Perth, Australia, which will undergo
metallurgical testing to produce a concentrate that will enable
completion of the final plant design that will be used in the DFS.
The concentrate samples will also be used to assist commercial
discussions and for downstream product test work.
To assist the understanding of the metallurgical test work and
product quality assessment process the following key steps are to
be undertaken:
Stage 1
-- Create representative oxide and fresh composites
-- Create composites in individual holes to test variability across the
deposit
-- Comminution testing on global composites
-- Detailed head assay analysis
-- Grind optimisation test work
-- Flotation optimisation test work
-- Initial concentrate analysis
Stage 2
-- Variability flotation test-work
-- Test work on high grade composites
-- Larger scale composite flotation.
-- Vendor test work
Previous test work was conducted at Bureau Veritas in Perth and
produced excellent results (see Table 1 below) with approximately
5.5kg of graphite concentrates produced. The results confirm that
high quality graphite concentrates can be produced using a
conventional flotation circuit.
Table 1:
Flake size Distribution % Purity % TGC
500 3.8 98.2
300 20.9 98.2
180 23.5 98.2
150 18.3 98.5
106 13.0 98.7
75 8.5 98.6
25 8.0 98.1
-25 3.9 95.7
Test work has confirmed that the concentrates from the Project
can be readily upgraded to over the 99.95% required to suit the
rapidly expanding lithium-ion and expandable graphite markets.
Graphite Market Update
Recent market developments point to increasing values being
placed on higher purity higher quality graphite concentrates: Black
Rock Resources (ASX:BKT), which owns the neighbouring Mahenge
Project, announced binding sales agreements at materially higher
than benchmark prices for higher purity concentrates and
significantly higher than the $1272/t used in the Company's Scoping
Study.
Graphite Grade v Pricing:
Nominal Graphite Grade
(TGC) (US$/tonne) CIF China (ex-duty)
94.5% - 95.5% $1,117
Premium
97.5% - 98.25% $1,490
Ultra
>99% $2,161
This compares to the bench-mark prices for standard quality 95%
TGC concentrates as recorded by Benchmark Minerals in November 2018
for #100 Mesh graphite of $US950/t using an exchange rate of RMB:US
6.71
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 / 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
Isabel de salis / 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's main focus is its 100% owned Mahenge Liandu
graphite project in south-east Tanzania. This Project is in a
highly prospective region with a high-grade JORC compliant inferred
mineral resource estimate of 51.1Mt @ 9.3% TGC, marking it as one
of the largest high-grade resources in Tanzania. 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.
View source version on businesswire.com:
https://www.businesswire.com/news/home/20190514006111/en/
This information is provided by Business Wire
(END) Dow Jones Newswires
May 15, 2019 02:00 ET (06:00 GMT)
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