TIDMACP
Armadale Capital Plc ('Armadale' or 'the Company')
Positive Metallurgical Test-Work Results
Armadale Capital plc (LON: ACP), the AIM quoted investment group
focused on natural resource projects in Africa, is delighted to
announce further confirmation that commercialisation plans for the
Mahenge Liandu Graphite Project in Tanzania continue to advance.
Notably, metallurgical test-work is progressing well with initial
test-work in line with expectations.
Highlights
-- Initial metallurgical test-work results from flotation stage demonstrated solid graphite recovery up to 95% Total Graphitic Content (TGC), consistent with expectations
-- Incremental test-work undertaken to enhance quality of final graphite concentrate product progressing well with a targeted premium purity levels expected in the 95-97% range - potentially facilitating premium pricing being factored into future off-take agreements
-- Review of legacy rainfall data indicates Project will have ample surface water to construct and then operate the mine and processing plant, materially reducing requirement for utilising costly ground water
-- New developments likely to have a positive impact on the Project's economics, which will be reflected in the DFS when published
-- Stakeholder engagement with the local community remains a top priority and continues positively
Nick Johansen Director of Armadale said: "With many moving parts
critical to developing a seamless value chain for the Mahenge
Liandu Project, it is pleasing to receive metallurgical test-work
that is progressing to plan and with results in line with
expectations. This will augur favourably as we move more
proactively to secure binding off-take commitments and project
level financing from our Chinese partners.
"It is also a positive outcome that surface water will be the
primary water source as, along with the potential to price our
final graphite product at a premium, this will also deliver a
positive uplift on the Project's overall economics.
"Moving forward, our engagement with the local community
couldn't be stronger and we are delighted to have their support,
especially as the Board moves to aggressively ramp up our efforts
to transform from explorer to emerging graphite producer."
FURTHER INFORMATION
Metallurgical test-work
Material from seven diamond drill-holes in the pit area were
used to generate several metallurgical composites comprising: one
master oxide; one master fresh ore; and seven variability mixtures.
Test-work on the master composites indicate: the oxide ore is
considered soft with low abrasion; and, fresh ore soft to moderate
hardness with low to moderate abrasion that can be easily
processed.
The ore was crushed up to 1mm then put through an initial
rougher flotation circuit. This achieved up to 95% initial recovery
levels, which is in line with expectations, with similar
performances for oxide and fresh ore.
Cleaner test-work has now commenced to increase purity of the
final graphite concentrate to marketable levels >95% TGC.
Initial concentrate cleaning results are favourable with
optimisation work continuing to achieve premium purity levels
typical for graphite deposits in the Mahenge region.
The purity levels targeted to be achieved by the end of the test
work programme are between 95-97% TGC at this stage of
metallurgical test-work, which is at the higher end of graphite
projects globally.
Water management
A review of local rainfall data indicated that the Project will
have ample surface water to operate the mining operation and the
processing plant. As such, the mine plan will incorporate the use
of surface and recycled water used in processing to minimise the
drawdown of ground water resources as well as reduce run-off from
site into surrounding communities.
In addition, test-work on water bore samples collected from the
Project area returned positive results that confirmed it suitable
for use in the process plant, mine construction and operation
phases. It also highlighted that to mitigate against drought
conditions, water test-work demonstrated ground water is suitable
substitute if required. Accordingly, the mine plan is being
reoriented to focus on primarily using available surface water and
recycling strategies, which are more economic and reduce the need
for a bore field to be constructed to supply water.
Community liaison
Armadale's local management held an open meeting with the Liandu
Village Council Committee, District Commissioner and District
Executive Director in June 2019 to review engagement to date and
focus on areas where cooperation could be enhanced.
All stakeholders believe the relationship has delivered
considerable value to the community over the past two years. Moving
forward, the village council is keen to leverage the successful
relationship with Armadale to encourage further investment and
development in the local community by other local and international
groups.
PROJECT BACKGROUND
Armadale's wholly-owned Mahenge Liandu graphite project in
Tanzania is in a highly prospective region, with a high-grade JORC
compliant indicated and inferred mineral resource estimate
announced February 2018 - 51.1Mt at 9.3% TGC. This includes 38.7Mt
Indicted at 9.3% and 12.4Mt at 9.1% TGC, making it one of the
largest high-grade resources in Tanzania.
The work to date has demonstrated the Project'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.
Currently, Armadale is completing a Definitive Feasibility Study
(DFS) based on the results of a Scoping Study that was completed in
March 2018. Highlights from the study include:
-- Producing an average of 49,000tpa of high-quality graphite products for a 32-year mine life
-- The near surface nature of the deposit produced a low 1:1 strip ratio for the life of the mine
-- The Project has a low operating cost of US$408/t, based on an average 12.5% TGC life of mine grade
-- The Project has a pre-tax IRR of 122% and NPV of US$349m, with a low development capex of US$35m
-- The maximum draw-down during the construction of the Project is US$34.9m and the after-tax payback period is 1.2 years
There remains significant scope to further improve returns, with
staged expansions as the current mine plan is based on circa 25% of
the total resource.
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 (0) 20 7236 1177
Paul Johnson, Non-Executive Director (UK)
Tim Jones, Company Secretary
Nomad and broker: FinnCap Ltd +44 (0) 20 7220 0500
Christopher Raggett / Max Bullen-Smith
Joint Broker: SI Capital Ltd +44 (0) 1483 413500
Nick Emerson
Press Relations: St Brides Partners Ltd +44 (0) 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 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/20190715005670/en/
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July 16, 2019 02:00 ET (06:00 GMT)
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