Hot Features
Premium
Level up your trading with our powerful tools and real-time insights all in one place.
Armadale (LSE:ACP), an AIM quoted investment company focused on natural resource projects in Africa, has announced that it has entered into agreements to acquire the remaining Netcom Global Inc (‘Netcom’) share capital not already held by Armadale, thereby gaining the right to an 80 per cent interest in the highly prospective, low-cost, Mpokoto Gold Project in the Katanga Province in the south of the Democratic Republic of Congo (‘Mpokoto’ or ‘the Project’).
In line with this investment, Armadale has a defined development strategy in place, targeting commercial gold production within 24 months.
Project Highlights:
· Mpokoto is a low-capex, low-opex project with a 10 year mine life, which Armadale is targeting to bring into production within 24 months
· Indicated and Inferred resource estimated at 380,000oz gold (‘Au’) from 7.2 million tonnes @ 1.65g/t Au with a cut-off grade of 0.5 g/t Au (75% Indicated category)
· Exploration Target potential of 20-24 million tonnes @ 1.5-1.8 g/t Au and resource amenable to low cost heap leach operation
· Well explored project with multiple targets – previous owners including Cluff Gold Plc, Gold Fields Ltd and Casa Mining Limited have collectively invested in excess of US$20 million
· Defined development strategy in place to rapidly advance the Project – pre-feasibility study targeted for completion by end of Q1 2014
· Low capital expenditure – estimated to total around US$10-15 million
· Targeting cash operating costs of US$650/oz and capital costs of US$70-100/oz
Transaction Highlights:
· Following its previous investment of, in aggregate, US$255,000, Armadale currently owns 22% of Netcom and will acquire the remaining 78% of the share capital of Netcom, which holds the rights to an 80% interest in the Mpokoto Project, in two transactions:
o Pursuant to the option announced on 21 August 2013, the acquisition of 68% of Netcom for an aggregate consideration of 700 million ordinary shares in the capital of Armadale (“Ordinary Shares”), to be issued in two tranches(the ‘Initial Acquisition’):
§ 350 million Ordinary Shares to be issued at completion (‘Initial Consideration Shares’); and
§ a further 350 million Ordinary Shares upon the grant of Exploitation Licences for the Mpokoto Project to the Company (anticipated by the end of June 2014) (the ‘Further Consideration Shares’)
o The acquisition of a further 10% interest from New Talisman Mines Limited (“NTL”) (together with a loan note of US$250,000 in Netcom) for an issue of 93 million Ordinary Shares at completion (‘NTL Shares’) (‘Minority Acquisition’)
Peter Marks, Chairman of Armadale said, “Mpokoto is a highly prospective, low capex, low cost gold project. With an estimated resource of 380,000oz Au from 7.2 million tonnes @ 1.65g/t gold (‘Au’) at a cut-off grade of 0.5 g/t Au and a potential exploration target of 20-24 million tonnes @ 1.5-1.8 g/t Au, Mpokoto represents a compelling investment opportunity.
As a result, we are delighted to announce that we have agreed to acquire the remaining issued share capital of Netcom, taking our interest to 100%. Furthermore, in order to unlock the inherent value potential of Mpokoto, we have a defined development strategy in place, which is targeting commercial gold production within 24 months. I look forward to updating shareholders on our progress in due course, as we build a solid portfolio of revenue generating African resource projects.”
