TIDMACP
Armadale Capital Plc / Index: AIM / Epic: ACP / Sector:
Investment Company
Armadale Capital Plc
('Armadale' or 'the Company')
Final Results and Notice of AGM
Armadale Capital plc (LON: ACP), the AIM quoted investment group
focused on natural resource projects in Africa, is pleased to
announce its final results for the year ended 31 December 2019
('Final Results' or 'Annual Report'). The Company also announces
that its Annual General Meeting ('AGM') will be held at Level 25,
108 St George's Terrace, Perth, Western Australia on 30 June 2020
at 17.00 AWST (10:00 BST). A notice of AGM, together with printed
copies of the Company's full Annual Report for the year ended 31
December 2019 will be posted to shareholders today. Copies will
also be available to view on the Company's website:
www.armadalecapitalplc.com.
Highlights
-- Targeting commercial production at flagship Mahenge Liandu Graphite
Project in Tanzania in 2021 ('Mahenge' or 'Mahenge Liandu')
-- DFS confirms project as a long-life low-cost graphite project with
c.US$358m NPV and IRR of 91%
-- High-quality graphite flake of up to 97.1% purity
-- Staged ramp-up to facilitate near term production
-- Scope for further improvement - updated mine schedule ('Mine Schedule')
has increased average annual output to 109ktpa of concentrate over life
of mine, which is a 30% increase on the DFS
-- Updated feasibility study based on updated Mine Schedule anticipated
('Feasibility Study')
-- Poised to take advantage of increasing graphite demand as the electric
vehicle market rapidly expands with strategic MoUs in place for offtake
agreements
-- Bolstered board of directors ('Board') to reflect and support Armadale's
progression to a production company
-- Further upside potential from quoted portfolio, where the Directors
believe there are opportunities for capital gains
Nick Johansen, Chairman of Armadale said: "We look to the year
ahead with much anticipation. Having long held confidence in the
significant value potential of Mahenge Liandu, the project
continues to exceed our expectations as we progress towards
production. With an extensive and incredibly pure graphite resource
there is unquestionable market demand for our product -- as
highlighted through a number of strategic MoUs we have secured for
offtake agreements, but of course the critical element to the
viability of any project is ensuring the cost effectiveness of
getting this resource out of the ground. The DFS results prove that
Mahenge Liandu has significant commercial value; with a US$358m NPV
and IRR of 91% and potential to significantly increase this through
an optimised study currently being completed, the project's
economic profile is incredibly strong. Our focus now is to finalise
ongoing discussions with potential debt finance partners and
project level development funding so that we can commence
construction, whilst further progressing our application for a full
mining licence. With defined work programmes in place to deliver on
these objectives and further advance our project, we are committed
to commencing commercial production in 2021 and realising the value
of Mahenge Liandu for the benefit of all stakeholders."
Strategic Report
Operational and Corporate Highlights for Period Ending 31
December 2019
Significant progress made in delivering key accretive milestones
in advancing the Mahenge Liandu Graphite Project in Tanzania
1. Completed Resource Upgrade incorporating high-grade near
surface mineralisation intersected in drilling.
2. Delivered revised Resource estimate which, broken down by
categories is as follows:
-- Measured: 11.5Mt @ 10.5% vs Nil previously
-- Indicated: 32.1Mt @ 9.6% vs 38.7Mt @ 9.3% previously
-- Inferred: 15.9Mt @ 9.8% vs 12.4Mt @ 9.1% previously
3. Metallurgical test-work programme completed with results
confirming that high-quality graphite flake of up to 97.1% purity
can be produced
4. Targeting commercial production 2021
5. Further off-take MOU signed and discussions underway with
other potential customers
6. Advancing workstream to secure project level funding
mandate
Post Period End -- Key Data Announced From DFS
1. US$882m pre-tax cashflow generated from initial 17 year mine life
2. Estimated pre-tax NPV of US$358m (utilising a discount rate of 10%) and
IRR of 91%
3. Staged ramp-up planned to facilitate near term production with 60,000tpa
graphite concentrate to be produced for the first four years (Stage 1)
before increasing to 90,000tpa (Stage 2)
4. Capital cost estimate for Stage 1 is US$38.6m, which includes a
contingency of U$S4.1m or 15% of total direct capital cost
5. 1.6-year payback for Stage 1 (after tax) based on an average sales price
of US$1,179/tonne. Stage 2 expansion is expected to be funded from
cashflow
Considerable scope for further positive improvement upon
economics in near-term through delivery of optimised DFS.
Post Period End - Other
1. Board strengthened with the previously announced appointments of Ms Amne
Suedi as Non-Executive Director in January 2020 and Mr Matt Bull as
Non-Executive Director in April 2020
2. Two additional MOUs signed to supply high quality graphite products
produced at Mahenge Liandu
3. Focus remains upon converting existing off-take agreements from MoUs to
binding offtake agreements
4. Continuation of application for full mining licence (thus furthering
major permitting milestones)
5. Advancement of discussions with potential debt finance partners and
project level development funding for construction
6. Ongoing review of quoted portfolio, where the Directors believe there are
opportunities for capital gains
7. Continue to actively review other exciting investment opportunities
During the year under review, Armadale continued to operate as a
diversified investing company focused on natural resource projects
in Africa. To this end, its portfolio is divided into two
groups:
-- Actively managed investments where the Company has majority ownership of
the investment; and
-- Passively managed investments where the Company has a minority investment,
typically in a quoted company, and does not have management control.
Currently, the Company's key actively managed investment is the
Mahenge Liandu Graphite Project in Tanzania.
With its large, high-grade open cut resource, and having
completed a Definitive Feasibility Study that highlighted an NPV of
US$358m and IRR of 91%, the Company is on track to commence
production at the Project during the course of 2022. This is timely
given that global need for graphite is set to accelerate driven by
demand for spherical graphite from the new energy sector as well as
emerging demand for expandable graphite used in products such as
fire-proof insulation.
Notably, the strength of the market was highlighted when, post
period end, the Company signed two additional off-take MOUs. The
Company is also currently reviewing other potential markets and
customers within this space.
Additionally, the Company continued to actively review other
investment opportunities with a view to targeting investments with
similar quality and potential as Mahenge Liandu.
ACTIVELY MANAGED INVESTMENTS
Mahenge Liandu Graphite Project, Tanzania
The Company continued to deliver excellent progress at its 100%
owned Mahenge Liandu Graphite Project during 2019. where an
extensive drilling campaign during the year delivered a meaningful
upgrade in the Mineral Resource Estimate for Mahenge where the
total Mineral Resource Estimate Increased to a JORC compliant
59.5Mt @ 9.8% Total Graphitic Content ('TGC') and making it one of
the largest high-grade graphite deposits in Tanzania.
The revised resources estimate broken down by categories is as
follows:
-- Measured: 11.5Mt @ 10.5% vs Nil previously
-- Indicated: 32.1Mt @ 9.6% vs 38.7Mt @ 9.3% previously
-- Inferred: 15.9Mt @ 9.8% vs 12.4Mt @ 9.1% previously
This upgrade reflects the substantial work undertaken by our
team on the ground in Tanzania this year and is a clear step
forward the development of Mahenge away from production.
In addition, the Company successfully completed an outstanding
metallurgical test-work programme where results which confirming
high-quality graphite flake of up to 97.1% purity convincingly
demonstrated that Armadale can produce a high-quality graphite
concentrate.
Work to date has demonstrated Mahenge Liandu's potential as a
project with compelling economics and a deposit with significant
tonnage, high-grade coarse flake and near surface mineralisation
(implying a low strip ratio) contained within one contiguous ore
body.
The focus of activities for the remainder of 2019 into 2020 was
the completion of a Definitive Feasibility Study ('DFS') which,
post-period end on 31 March 2020 delivered extremely compelling
economics. The study represented one of the most significant
de-risking milestones in the Company's history to date delivering
economics such as a 91% IRR and a 1.6 year payback upon
capital.
The DFS demonstrated that Armadale can be a significant low-cost
supplier to the graphite industry with the potential to generate
pre-tax cashflows of US$882m over an initial 17 year mine-life and
scope for further improvement work for which is currently
progressing with an updated DFS nearing completion.
Further details of the Definitive Feasibility Study may be found
below.
Project Location & Licences
The Mahenge Project is located in the Morogoro region, Ulanga
district, Tanzania close to existing transport infrastructure. It
is 10km south of the Mahenge township and about 76km via a
well-maintained dirt road to Ifakara after which it is 400km by
sealed road from Dar-es-Salaam port. Other operators in the region
include Blackrock Mining Limited and Kibaran Resources Limited,
which have similar product purity and resource grades.
Location of Mahenge Liandu Prospect
The Company holds following exploration tenements for Mahenge
Liandu:
-- PL10846/2016 granted on 21/9/2016 expires 20/9/2020 area 7.34 square
kilometres
-- PL10840/2016 granted 21/9/2016 expires 20/9/2020 area 21.89 square
kilometres
Project Geology
The prospect is situated within the pan African Mozambique belt,
which is the orogenic belt resulting from activities taking place
in the Neoproterozoic time. The belt extends along the eastern
border of Africa from Ethiopia through Kenya and Tanzania. The
orogenic event resulted in a complex series of geological events
including the rifting system. The belt consists of high-grade
mid-crustal rocks with a Neoproterozoic metamorphic overprint. It
is divided into the Western Granulite and Eastern Granulite. The
deposit is situated in the Eastern Granulites. The belt has
undergone retrograde metamorphism which resulted in the present
upper amphibolite metamorphic facies in the Project area.
Systematic drilling indicated the existence of broad, shallow to
steep dipping schists overlaying granitic gneisses/gneiss. The
gneisses are underlaid by marble units. The graphitic schists form
alternating compositional layering, with quartz being the content
that differentiates these units. High grade graphite schists
(graphite schist) have a lower composition of quartz. Medium to low
grade graphite schists (quartz graphite schist) have a higher
visual quartz percentage. The marble unit likely forms the base of
the sequence (there has not been drilling done beyond the marble
unit).
The drilling results have been very consistent with the
structural measurements taken during the mapping programme which
suggested gentle to steep dipping to the south and south-southwest.
The mineralisation remains open in all directions.
Definitive Feasibility Study
Post-period end a Definitive Feasibility Study was completed for
Mahenge Liandu, which included the completion of a mine
optimisation study, infill drilling and the resource upgrade.
Highlights of the Definitive Feasibility Study were as
follows
-- DFS confirms Mahenge in the board's view as a large, long life, low cost
graphite deposit with a focus on high quality graphite concentrate for
the rapidly emerging EV market
-- US$882m pre-tax cashflow generated from initial 17 year mine life
utilises just 25% of the resource, which remains open in multiple
directions offering significant further upside
-- Estimated pre-tax NPV of US$358m (utilising a discount rate of 10%) and
IRR of 91% with scope for further positive improvement upon economics in
near-term through delivery of optimised DFS
-- Staged ramp-up planned to facilitate near term production with 60,000tpa
graphite concentrate to be produced for the first four years (Stage 1)
before increasing to 90,000tpa (Stage 2)
-- Capital cost estimate for Stage 1 is US$38.6m, which includes a
contingency of U$S4.1m or 15% of total direct capital cost, a slight
increase on the scoping study allowing for the staged ramp up
-- 1.6 year payback for Stage 1 (after tax) based on an average sales price
of US$1,179/t
-- Stage 2 expansion is expected to be funded from cashflow
-- The outlook for the graphite market remains strong with the ongoing
development of the EV market
-- Scope for improvement of DFS economics through delivery of further
detailed modelling of higher-grade zones to increase the head grade in
the mine schedule - work is underway
-- Application for Mining Licence is planned to commence in Q3 2020
-- Projected timeline to first production is expected to be approximately
10-12 months from the start of construction
-- DFS delivery has confirmed the commercial potential of Mahenge and will
support ongoing discussions for offtake agreements, debt package finance
for construction and project level development funding
The Definitive Feasibility Study for the Mahenge Graphite
Project delivered extremely compelling economics. This study
represents one of the most significant de-risking milestones in the
Company's history to date. The Feasibility Study demonstrated
economics such as a 91% IRR and a 1.6 year payback upon capital.
The DFS showed that Armadale can be a significant low-cost supplier
to the graphite industry with the potential to generate pre-tax
cashflows of US$882m over an initial 17 year mine-life and scope
for further improvement
Environmental and Social Studies
During August 2018, the Company announced the completion of
field work for Environmental and Social baseline surveys and the
Company has finalised the Environmental Social Impact Assessment
('ESIA') and Relocation Action Plan ('RAP') for submission to the
National Environment Management Council ('NEMC').
To help increase local engagement in the Project area, the
Company has appointed a community liaison officer who will aid
understanding of the impact and benefits of mining in the region.
Further information in respect of this work of will be provided as
progress is made.
Product Marketing and Offtake Partners
In February 2019, the Company announced an MOU with the Matrass
Group, a China based graphite mining and processing company, for
high quality graphite products produced at Mahenge Liandu. This
includes a proposed offtake of 30,000tpa of graphite concentrate
for an initial five-year term at a price to be agreed based on the
Chinese benchmark for the quality of the graphite produced.
In September 2019, the Company announced an MOU with CoolRU
Information Technology, a China based technology company, for high
quality graphite products produced at Mahenge Liandu. This includes
a proposed offtake of 5,000tpa of graphite concentrate for an
initial five-year term at a price to be agreed based on the Chinese
benchmark for the quality of the graphite produced.
In October 2019, the Company announced an MOU with Datong
Resources ("Datong"), China, for high quality graphite products
produced at Mahenge Liandu. This includes a proposed offtake of
25,000tpa of graphite concentrate for an initial five-year term at
a price to be agreed based on the Chinese benchmark for the quality
of the graphite produced.
Offtakes under MOU total 60,000 tpa representing over 122% of
average target annual production. Work to progress these MOU to a
binding agreement is underway as are discussions with other
potential offtake partners.
The graphite market continues to strengthen with several
Tanzanian based graphite projects securing binding offtakes and
construction financing packages over recent months. The rapid
expansion of the electric vehicle market is expected to continue to
drive this growth.
Project Level Financing
The Company is engaged in discussions to secure a project level
funding mandate. Further details in respect of this element will be
provided as material developments occur.
Mining Lease Application
Reflecting the progress of work to date, the Company expects to
submit its application for a mining licence in August 2020.
Front End Engineering Design
Following completion of the DFS, the Company commenced some work
for the Front-End Engineering Design ('FEED') programme. The FEED
process is a detailed technical project planning phase undertaken
prior to the commencement of construction and used as a basis to
secure project construction bids.
Project Construction
Subject to a successful and timely completion of the
aforementioned preparatory work, suitable project level financing
and receipt of relevant regulatory permits and licences, the
Company expects to commence the construction phase in Q2 2021.
Production
Based on current estimates and assuming a construction phase of
10 months the first production would be achieved from the Mahenge
Liandu Project around Q1 2022.
PASSIVELY MANAGED INVESTMENTS
Mine Restoration Investments Limited ('MRI'), South Africa
The shares in MRI are being carried at Nil market value (2018:
Nil) as MRI shares were suspended from trading on the Johannesburg
Stock Exchange. The MRI shares continued to be suspended throughout
the year.
Quoted Portfolio
The Company has a small portfolio of quoted investments,
principally in resource companies where the Directors believe there
are opportunities for capital gain. The Company continues to keep
its portfolio under review. The Company's strategy with its quoted
portfolio is to gain exposure in projects that have the potential
to create short to medium term returns for the Company as well as
diversify the Company's exposure to a broader range of commodities
while being able to enter and exit the position with minimal cost
and time.
SUSTAINABLE DEVELOPMENT
The Company is committed to sustainable development and
conducting its business ethically. Given that the Company invests
in the mining industry, one of Armadale's key focuses is on
maintaining a high level of health and safety, environmentally
responsibility, and support for the communities close to its
investments.
CORPORATE INFORMATION
Principal risks and uncertainties
There are known risks associated with the mineral industry,
especially in Africa. The Board regularly reviews the risks to
which the Group is exposed and endeavours to minimise them as far
as possible. The following summary, which is not exhaustive,
outlines some of the risks and uncertainties currently facing the
Group:
-- The Group is exposed to graphite. Graphite is a relatively new commodity
whose market is being driven by demand in renewable energy. It is thus
vulnerable to global energy policies.
-- The impact of Brexit on companies operating in the UK is still being
monitored. Thus far Brexit has not impacted the Group's ability to raise
funds.
-- The exploration for and development of mineral resources involves
technical risks, infrastructure risks and logistical challenges, which
even a combination of careful evaluation and knowledge may not eliminate.
-- There can be no assurance that the Group's project will be fully
developed in accordance with current plans.
-- Future development work and subsequent financial returns arising may be
adversely affected by factors outside the control of the Group.
-- The availability and access to future funding within the global economic
environment.
-- The Group operates in multiple national jurisdictions and is therefore
vulnerable to changes in government policies which are outside its
control. The mining regulation changes in Tanzania are still being
evaluated, however they seem to have minimal impact on investment in
graphite mining. The Group continues to monitor the implementation of the
changes to evaluate and mitigate sovereign risks.
-- The impact of COVID-19 pandemic on the project is so far minimal as the
Company's site activities were substantially completed in 2019. However,
the financial impact on the Company is continuing to be evaluated and
strategies implemented to reduce cash outflow.
-- The Group is exposed to gold as the holder of a royalty on gold
production from its previously held gold project. The Group's potential
future royalty stream will be affected by fluctuations in the prevailing
market price of gold and to variations of the US dollar in which gold
sales will be denominated.
Some of the mitigation strategies the Group applies in its
present stage of development include, among others:
-- Proactive management to reducing fixed costs.
-- Rationalisation of all capital expenditures.
-- Maintaining strong relationships with government (employing local staff
and partial government ownership), which improves the Group's position as
a preferred small mining partner.
-- Engagement with local communities to ensure our activities provide value
to the communities where we operate.
-- Alternative and continued funding activities with a number of options to
secure future funding to continue as a going concern.
-- To address the financial impact of COVID-19, the Company recently reduced
Directors and office holders fees by 50% for an initial period of 3
months from April 2020. This will be reviewed again in June 2020.
The Directors regularly monitor such risks and will take actions
as appropriate to mitigate them. The Group manages its risks by
seeking to ensure that it complies with the terms of its
agreements, and through the application of appropriate policies and
procedures, and via the recruitment and retention of a team of
skilled and experienced professionals.
Key Performance Indicators
The Group's current key performance indicators ('KPIs') are the
performance of its underlying investments, measured in terms of the
development of the specific projects they relate to, the increase
in capital value since investment and the earnings generated for
the Group from the investment. The Directors consider that it is
still too early in the investment cycle of any of the investments
held, for meaningful KPIs to be given.
Success is also measured through the identification and
investment in suitable additional opportunities that fit the
Group's investment objectives.
Section 172 Statement
Section 172(1): A director of a company must act in the way he
considers, in good faith, would be most likely to promote the
success of the company for the benefit of its members as a whole,
and in doing so have regard (amongst other matters) to --
Section 172(1) (b) the interests of the company's employees,
Company's Comment: While the company is largely staffed by
contractor employees (rather than direct employees of the Company),
the directors consider that continuing active work on the Mahenge
Liandu Graphite Project to be in the best interest of such staff to
utilise their skills and develop their local communities. The board
seeks regular feedback from its key stakeholders (including staff
and advisers) to ensure that the corporate culture of the Company
remains highly ethical in terms of our Company's values and
behaviours.
Section 172(1) (c) the need to foster the company's business
relationships with suppliers, customers and others,
Company's Comment: The directors ensure that suppliers are
available and meeting commitments and there is good communication
with staff as a key requirement for high levels of engagement. This
is done by periodic and ad-hoc briefings and discussions.
Reasons to engage shareholders are to meet regulatory
requirements and understand shareholder sentiments on the business,
its prospects and performance of management.
This is done by regulatory news releases, keeping the investor
relations section of the website up to date, annual and half-year
reports and presentations and AGM.
Section 172(1) (d) the impact of the company's operations on the
community and the environment,
Company's Comment: The Company's activities impact communities
in the places where we operate and elsewhere. The Company engages
communities with employment / business development arrangements
within guidelines. Through preparation and compliance with
environmental and social management plans, which include the
regulatory requirements for the Company on its Mahenge Liandu
Graphite Project, the directors ensure that wherever possible its
activities have a positive impact on the community and avoid
adverse environmental impacts.
The Company has engaged the services of a local contact person
in Liandu who provides information to the community about our
intended project activities and is responsible for managing local
affairs and feedback to the Company. In the year ending 31 December
2019 the Company contributed funds to the local primary school for
food and other needs.
Section 172(1) (e) the desirability of the company maintaining a
reputation for high standards of business conduct, and
Company's Comment: The directors consider standards of business
conduct in all dealings of the Company. The members of the board
have a collective responsibility and obligation to promote the
interests of the Company and are collectively responsible for
defining standards of business conduct which includes corporate
governance arrangements. The board provides strategic leadership
for the Company and operates within the scope of our corporate
governance framework and sets the strategic goals for the
Company.
Section 172(1) (f) the need to act fairly as between members of
the company.
Company's Comment: The board takes feedback from a wide range of
shareholders (large and small) and endeavours at every opportunity
to pro-actively engage with all shareholders (via regular news
reporting-RNS) and engage with any specific shareholders in
response to particular queries they may have from time to time. The
board considers that its key decisions during the year have
impacted equally on all members of the Company.
Board
Post period end, in January 2020, Ms Amne Suedi was appointed to
the Board as a Non-executive Director.
Ms Suedi is a highly experienced legal professional who
specialises in Africa based investment and business law. Ms Suedi
is the founder and CEO of Shikana Law Group, a law firm in Kenya,
Zanzibar and Tanzania and headquartered in Dar es Salaam, which
provides legal and investment advice to foreign investors operating
in Africa. Previously Ms Suedi acted as a legal adviser to Pictet
Asset Management in Switzerland and the World Trade
Organisation.
In April 2020, Mr. Matt Bull was appointed to the Board as a
Non-executive Director.
Mr. Bull has served as Technical Director of the Company since
2016 and has led the development of the Mahenge Liandu Graphite
Project in Tanzania during that time. Mr. Bull is an experienced
geologist responsible for managing numerous exploration projects in
remote locations in Australia and Sub-Saharan Africa including the
running of multi-rig drilling programs with large support
teams.
Financial Results
For the year ended 31 December 20198 the Group did not earn any
revenues as its business related solely to the making of
investments in non-revenue producing resource projects and
companies.
The Group made a loss after tax of GBP0.273 million (2018:
GBP0.648 million) for the year ended 31 December 2019.
Expenditure on the Mahenge Liandu project during the year
amounted to GBP593,000, which was capitalised as additional
exploration and evaluation assets. The disposal of the Mpokoto
project was finalised in January and accumulated foreign exchange
gains, arising on annual restatement of the project's net assets,
of GBP240,000 were released to revenue reserves. A strategic
investment of GBP59,000 was made in shares of Forum Energy Metals
Corp, a company incorporated in Canada and listed on the Toronto
Stock Exchange. By 31 December 2019, the value of this investment
had risen to GBP105,000.
Funds raised during the year amounted in total to GBP1.3 million
of which GBP0.9 million came from placings of shares and GBP0.4
million from an issue of convertible loan notes. Other share issues
during the year were in respect of loan note conversions and the
discharge of certain consultants' invoices. A new loan facility of
GBP0.3 million was put in place but no drawdown was made during the
year. Since the year end, a further GBP0.7 million has been raised
from a placing of shares and from warrant and option exercises and
GBP230,000 of the loan notes issued in 2019 have been converted
into ordinary shares. The balance of the new loan facility, GBP0.25
million, remains available for drawdown.
At 31 December 2019, the Group had cash of GBP96,000 (2018:
GBP44,000) and debt of GBP867,000 (2018: GBP677,000).
Outlook
Looking to the future, with its clear development path to
production, the Directors believe that Mahenge Liandu represents an
exciting opportunity for the Group. As identified in the going
concern note to the Directors' Report, the Company's ability to
achieve its strategy with respect to the project is dependent on
the further fundraising. Furthermore, other notable investment
opportunities are under review, which the board believe could
replicate this success and deliver significant value to
shareholders.
Nicholas Johansen
Director
4 June 2020
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2019
2019 2018
GBP GBP
Administrative expenses (468,948) (392,945)
Share based payment charges (22,550) -
Change in fair value of derivative (45,467) -
Change in fair value of investments 46,145
Operating loss (490,820) (392,945)
Finance costs (21,241) (17,459)
Loss before taxation (512,061) (410,404)
Taxation - -
Loss for the year from continuing operations (512,061) (410,404)
Profit/(Loss) from discontinued operations, net of tax 239,513 (237,616)
Loss after taxation (272,548) (648,020)
Other comprehensive income
Items that may be reclassified to profit or loss:
Reclassification of foreign exchange gain (239,513)
Exchange differences on translating foreign entities (93,571) 83,407
Total comprehensive (loss) / income attributable to the
equity holders of the parent company (605,632) (564,613)
Loss per share attributable to the equity holders of the
parent company Pence Pence
Basic and diluted total loss per share (0.07) (0.23)
Basic and diluted loss per share from continuing
operations (0.14) (0.14)
Consolidated Statement of Financial Position
At 31 December 2019
2019 2018
GBP GBP
Assets
Non-current assets
Exploration and evaluation assets 3,705,210 3,192,999
Investments 105,755 973
3,810,965 3,193,972
Current assets
Trade and other receivables 159,495 53,486
Cash and cash equivalents 95,641 44,310
255,136 97,796
Non-current assets classified as held for sale - 128,011
255,136 225,807
Total assets 4,066,101 3,419,779
Equity and liabilities
Equity
Share capital 3,139,135 3,038,605
Share premium 21,037,478 20,569,844
Shares to be issued 286,000 286,000
Share option and warrant reserve 661,676 94,884
Foreign exchange reserve 88,168 421,252
Retained earnings (22,400,310) (22,129,940)
Total equity 2,812,147 2,280,645
Current liabilities
Trade and other payables 267,566 333,653
Loans 866,854 677,470
Derivative liability 119,534 -
1,253,954 1,011,123
Liabilities directly associated with non-current
assets classified as held for sale - 128,011
Total Liabilities 1,253,954 1,139,134
Total equity and liabilities 4,066,101 3,419,779
Approved by the Board and authorised for issue on 4 June
2020
Signed on behalf of the Board
ES Mahede N Johansen
Director Director
Company Statement of Financial Position
At 31 December 2019
2019 2018
GBP GBP
Assets
Non-current assets
Investments 1,705,755 1,600,973
Other receivables 2,078,657 1,394,461
3,784,412 2,995,434
Current assets
Trade and other receivables 77,097 13,439
Cash and cash equivalents 88,466 4,240
165,563 17,679
Total assets 3,949,975 3,013,113
Equity and liabilities
Equity
Share capital 3,139,135 3,038,605
Share premium 21,037,478 20,569,844
Shares to be issued 286,000 286,000
Share option and warrant reserve 661,676 94,884
Retained earnings (22,245,747) (21,753,522)
Total equity 2,878,542 2,235,811
Current liabilities
Trade and other payables 85,045 99,832
Loans 866,854 677,470
Derivative liability 119,534
Total liabilities 1,071,433 777,302
Total equity and liabilities 3,949,975 3,013,113
The Company has taken advantage of the exemption conferred by
section 408 of Companies Act 2006 from presenting its own statement
of comprehensive income. A loss after taxation of GBP490,403 (2018:
GBP605,270) has been included in the financial statements of the
parent company.
Approved by the Board and authorised for issue on 4 June
2020
Signed on behalf of the Board
ES Mahede N Johansen
Director Director
Company Registration No. 5541602
Consolidated Statement of Changes in Equity
For the year ended 31 December 2019
Share
Option
Shares and Foreign
Share Share to be Warrant Exchange Retained
Capital Premium issued Reserve Reserve Earnings Total
GBP GBP GBP GBP GBP GBP GBP
At 1 January
2018 2,980,211 19,720,193 286,000 94,884 337,845 (21,481,920) 1,937,213
Loss for the
year - - - - - (648,020) (648,020)
Other
comprehensive
loss - - - - 83,407 83,407
Total
comprehensive
loss for the
year - - - - 83,407 (648,020) (564,613)
Issue of
shares 58,394 905,106 - - - - 963,500
Expenses of
issue - (55,455) - - - - (55,455)
Total other
movements 58,394 849,651 - - - - 908,045
At 31 December
2018 3,038,605 20,569,844 286,000 94,884 421,252 (22,129,940) 2,280,645
Loss for the
year - - - - - (272,548) (272,548)
Other
comprehensive
loss - - - - (333,030) (333,030)
Total
comprehensive
loss for the
year - - - - (333,030) (272,548) (605,578)
Issue of
shares and
warrants 100,530 658,308 - 546,420 - - 1,305,258
Expenses of
issue (190,674) (190,674)
Transfer on
exercise of
warrants - - - (2,178) - 2,178 -
Share based
payment
charges - - - 22,550 - - 22,550
Total other
movements 100,530 467,634 - 568,970 - - 1,137,134
At 31 December
2019 3,139,135 21,037,478 286,000 661,676 88,168 (22,400,310) 2,812,147
The following describes the nature and purpose of each reserve
within owners' equity:
Reserve Description and purpose
Share capital amount subscribed for share capital at
nominal value
Share premium amount subscribed for share capital in
excess of nominal value, net of allowable
expenses
Shares to be issued share capital to be issued in connection
with historical acquisition
Share option and warrant reserve cumulative charge recognised under IFRS 2 in
respect of share-based payment awards
Foreign exchange reserve gains/losses arising on re-translating the
net assets of overseas operations into
sterling
Retained earnings cumulative net gains and losses recognised
in the statement of comprehensive income
Company Statement of Changes in Equity
For the year ended 31 December 2019
Share
Option
Shares and
Share Share to be Warrant Retained
Capital Premium issued Reserve Earnings Total
GBP GBP GBP GBP GBP GBP
At 31 December
2017 2,980,211 19,720,193 286,000 94,884 (20,953,744) 2,127,5446
IFRS9
adjustment to
intercompany
debt - - - - (194,508) (194,508)
At 1 January
2018 2,980,211 19,720,193 286,000 94,884 (21,148,252) 1,933,036
Loss for the
year (605,270) (605,270)
Total
comprehensive
loss for the
year (605,270) (605,270)
Issue of
shares 58,394 905,106 - - - 963,500
Expenses of
issue - (55,455) - - - (55,455)
Share based
payment
charges - - - - - -
Transfer on
conversion of
loan notes - - - - - -
Total other
movements 58,394 849,651 - - - 908,045
At 31 December
2018 3,038,605 20,569,844 286,000 94,884 (21,753,522) 2,235,811
Loss for the
year - - - - (494,403) (494,403)
Total
comprehensive
loss for the
year - - - - (494,403) (494,403)
Issue of
shares and
warrants 100,530 658,308 - 546,420 - 1,305,258
Expenses of
share issue - (190,674) - - - (190,674)
Transfer on
exercise of
warrants - - - (2,178) 2,178 -
Share based
payment
charges - - - 22,550 - 22,550
Total other
movements 100,530 467,634 - 566,792 2,178 1,137,134
At 31 December
2019 3,139,135 21,037,478 286,000 661,676 (22,245,747) 2,878,542
The following describes the nature and purpose of each reserve
within owners' equity:
Reserve Description and purpose
Share capital amount subscribed for share capital at
nominal value
Share premium amount subscribed for share capital in
excess of nominal value, net of allowable
expenses
Shares to be issued share capital to be issued in connection
with historical acquisition
Share option and warrant reserve cumulative charge recognised under IFRS 2 in
respect of share-based payment awards
Retained earnings cumulative net gains and losses recognised
in the statement of comprehensive income
Consolidated Statement of Cash Flows
For the year ended 31 December 2019
2019 2018
GBP GBP
Cash flows from operating activities
Loss before taxation (272,548) (648,020)
Adjustment for:
Release of exchange gains on overseas operation (239,513) -
Impairment charge - 194,401
Share based payment charge 22,550 -
Change in fair value of derivative 45,467 -
Change in fair value of investments (46,145)
Finance costs 21,241 17,459
(468,948) (436,160)
Changes in working capital
Receivables (44,103) 1,077
Payables (14,868) 98,048
Net cash used in operating activities (527,919) (337,035)
Cash flows from investing activities
Expenditure on exploration and evaluation assets (479,238) (224,095)
Purchase of listed investments (58,637) -
Sale of listed investments - 5,732
Net cash used in investing activities (537,875) (218,363)
Cash flows from financing activities
Proceeds from share placement 968,696 560,000
Issue costs (46,500) (25,455)
Issue of loan notes 400,000 -
Loan repayment (235,071) -
Proceeds from loan 30,000 -
Net cash from financing activities 1,117,125 534,545
Net increase/(decrease) in cash and cash equivalents 51,331 (20,853)
Cash and cash equivalents at 1 January 44,310 65,163
Cash and cash equivalents at 31 December 95,641 44,310
Company Statement of Cash Flows
For the year ended 31 December 2019
2019 2018
GBP GBP
Cash flows from operating activities
Loss before taxation (494,403) (605,270)
Adjustment for:
Share based payment charge 22,550 -
Impairment charge 168,920 404,808
Change in fair value of derivative 45,467 -
Change in fair value of investments (46,145)
Finance costs 21,241 12,708
(282,370) (187,754))
Changes in working capital
Receivables (63,658) 30,311
Payables 9,663 33,203
Net cash used in operating activities (336,365) (124,240)
Cash flows from investing activities
Advances to subsidiaries (637,897) (422,606)
Purchase of listed investments (58,637) -
Sale of listed investments - 5,732
Net cash used in investing activities (696,534) (416,874)
Cash flows from financing activities
Proceeds from share placement 968,696 560,000
Issue costs (46,500) (25,455)
Issue of loan notes 400,000 -
Loan repayment (235,071) -
Proceeds from loan (Note 16) 30,000 -
Net cash from financing activities 1,117,125 534,545
Net increase/(decrease) in cash and cash equivalents 84,226 (6,569)
Cash and cash equivalents at 1 January 4,240 10,809
Cash and cash equivalents at 31 December 88,466 4,240
The information communicated in this announcement contains
inside information for the purposes of Article 7 of the Market
Abuse Regulation (EU) No. 596/2014.
**S**
Enquiries:
Armadale Capital Plc
Nick Johansen, Non-Executive Director
Tim Jones, Company Secretary +44 (0) 20 7236 1177
Nomad and Broker: finnCap Ltd
Christopher Raggett / Teddy Whiley +44 (0) 20 7220 0500
Joint Broker: SI Capital Ltd
Nick Emerson +44 (0) 1483 413500
Press Relations: St Brides Partners Ltd
Charlotte Page / Beth Melluish +44 (0) 20 7236 1177
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/20200603005976/en/
CONTACT:
Armadale Capital Plc
SOURCE: Armadale Capital Plc
Copyright Business Wire 2020
(END) Dow Jones Newswires
June 04, 2020 02:37 ET (06:37 GMT)
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