TIDMACP
Armadale Capital Plc / Index: AIM / Epic: ACP / Sector:
Investment Company
30 October 2019
Armadale Capital Plc ('Armadale' or 'the Company')
Further Strategic Financing
Armadale Capital plc (LON: ACP) the AIM quoted investment
company focused on natural resource projects in Africa, is pleased
to announce a further strategic financing update which
significantly strengthens the Company's financial position and
provides flexibility pending the delivery of the Mahenge Liandu
Graphite Project's ("Mahenge Liandu" or "the Project") Definitive
Feasibility Study ("DFS") and the acceleration of subsequent
development activities following its completion.
In particular, the package will enable the Company to implement
important steps to prepare the Project for production at the
earliest opportunity, delivering product that complies with the
expectations and needs of potential high purity graphite
customers.
In total the Company has secured a further GBP700,000 financing
package as outlined below.
Highlights:
-- New convertible loan note ("CLN") of GBP400,000 secured with clients of SI Capital Limited, joint broker to the Company
-- Two new drawdown facilities have been secured providing additional working capital of up to GBP300,000, should the Company wish to access further capital for accelerated project development
-- Original drawdown facilities, on which a balance of GBP150,000 was drawn down, are to be repaid in full thereby immediately removing the security arrangements associated with the original drawdown facilities
-- Overall, net additional working capital available to the Company amounts to GBP550,000 before expenses, significantly bolstering the financial strength of the Company at this highly important stage of project development
Nick Johansen, Director of Armadale said: "The Company's
principle investment, the Mahenge Liandu Graphite Project, is
entering a key stage as we move from explorer to emerging producer.
As such and recognising the advanced status of the Project, it is
important to ensure the Company has access to a balanced portfolio
of working capital.
"With our financial position significantly strengthened by the
recent placing of and subscription raising GBP500,000, and by the
measures announced today, we remain focused on the remaining and
ongoing work streams to compete the DFS.
"Equally important is the ability to accelerate project
development activities following completion of the DFS as the Board
believes that the economics of the Project will be strongly
demonstrated in the DFS findings and make Mahenge Liandu both a
compelling investment and a leading East African graphite project,
supplying demand for high purity graphite.
"I look forward to reporting further as each DFS and subsequent
development milestone is completed and as we take the steps to
becoming a significant graphite producer."
FURTHER FINANCIAL INSTRUMENT INFORMATION
New Convertible Loan Note - GBP400,000
Fixed rate and unsecured loan notes carrying an interest rate of
10% per annum to the expiry date of 6 November 2020. CLN holders
may convert into new Armadale Capital plc Ordinary Shares at a
price of 3.0 pence or at 90% of the average previous 10 trading
days published volume weighted average share price ("VWAP") on the
conversion date.
New Draw Down Facilities - up to GBP300,000
Draw down facility carries a term of 12 months from execution.
Funds drawn down will carry a face value of 110% of the drawn down
amount ("Face Value"). Armadale may elect to repay the Face Value
at any time and the borrower then has a 5 day window to elect
instead of a cash repayment to convert the Face Value into new
Armadale Capital plc Ordinary Shares at 3.0 pence or at 90% of the
average previous 10 Trading Days published VWAP.
Mahenge Liandu Graphite Project, Tanzania
Armadale Capital's wholly-owned Mahenge Liandu Graphite Project
is located in a highly prospective region, with a high-grade JORC
compliant inferred, indicated and measured mineral resource
estimate announced October 2019 - 59.5Mt at 9.8% TGC. This includes
15.90Mt inferred at 9.75% TGC, 32.06Mt indicated at 9.58% TGC and
11.52MT measured at 10.54% 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 Capital is completing a Definitive
Feasibility Study 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 Mahenge Liandu 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
59.48Mt @ 9.8% 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/20191030005461/en/
This information is provided by Business Wire
(END) Dow Jones Newswires
October 30, 2019 06:15 ET (10:15 GMT)
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