TIDMACP
Armadale Capital Plc / Index: AIM / Epic: ACP / Sector:
Investment Company
26 September 2019
Armadale Capital Plc ('Armadale' or 'the Company')
Offtake Agreement MOU for Graphite Products Produced at Mahenge
Liandu
+70% Target Graphite Production Now Under Offtake MOU
Armadale Capital plc (LON:ACP), the AIM quoted investment
company focused on natural resource projects in Africa, is pleased
to announce that it has signed a Memorandum of Understanding
("MOU") for a proposed offtake agreement with CoolRU Information
Technology ("CoolRU"), a China based technology company, for high
quality graphite products produced at the Company's Mahenge Liandu
Graphite Project ("Mahenge Liandu" or the "Project") in
Tanzania.
Highlights
-- MOU signed with CoolRU, based in China, for the proposed offtake of 5,000 tonnes per annum ('tpa') of graphite concentrate produced at Mahenge Liandu
-- MOU is for an initial term of five years and at a price to be agreed based on the Chinese benchmark for the quality of the graphite produced
-- MOU, in addition to agreement announced on 19 February 2019 with the Matrass Group, brings the total offtake under an MOU to 35,000tpa representing 71.4% of the 49,000tpa average annual production target
-- Discussions advancing with a major organisation to secure a further offtake agreement in respect of the remaining target production
-- Work is continuing in parallel to finalise a Definitive Feasibility Study ('DFS') and to convert MOUs into binding offtake agreements
Nick Johansen, Director of Armadale said: "Securing this MOU is
another important step in the commercialisation of Mahenge Liandu.
We now stand with over 70% of planned annual graphite production
under offtake MOU and expect to secure further offtake agreements,
which will cover all planned production. This news comes at a time
when the Company is accelerating its transition from explorer to
emerging graphite producer, whilst multiple important workstreams
related to completion of the Project's DFS are underway. Armadale
will, as recently demonstrated, provide updates to market as each
important workstream is concluded."
Details of the MOU with CoolRU
Armadale has secured an MOU with CoolRU Information Technology
for 5,000tpa of graphite concentrate produced at Mahenge Liandu
over an initial five-year period.
CoolRU was established in 2006 and is registered in WangJing
Science Park in Beijing China. It is working closely with Geek+,
the world's leading provider of advanced robotics and AI
technologies, to offer truly comprehensive intelligent logistics
solutions to customers.
CoolRU is developing various applications of graphene, and high
technologies related to graphite industry including solutions used
in forest fire prevention and autonomous vehicles.
The MOU with CoolRU follows the MOU with the Matrass Group
announced on 19 February 2019 and brings the total offtake under an
MOU to 35,000tpa representing 71.4% of the 49,000tpa average annual
production target at the Project. Additionally, discussions are
advancing with a major organisation to secure a further offtake
agreement in respect of the remaining target production.
Mahenge Liandu Graphite Project, Tanzania
Armadale's wholly-owned Mahenge Liandu Graphite Project is
located 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 DFS based on the results of
a Scoping Study that was completed in March 2018. The study was
based on a throughput of 400,000tpa over a 32-year mine life and
showed the project has robust economics and warrants further
development.
The Scoping Study verified the Mahenge Liandu project could
produce a coarse flake, high-purity graphite product underpinning a
compelling business case to progress commercialisation plans.
The Scoping Study, based on a 400,000tpa throughput, highlighted
the following key positive metrics:
-- Producing an average of 49,000tpa of high-quality graphite products for a 32-year mine life
-- Near surface nature of the deposit produced a low 1:1 strip ratio for the life of the mine
-- Low operating cost of US$408/t, based on an average 12.5% TGC life of mine grade
-- Pre-tax IRR of 122% and NPV of US$349m, with a low development capex of US$35m
-- 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/20190925006022/en/
This information is provided by Business Wire
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