TIDMACP
Armadale Capital Plc / Index: AIM / Epic: ACP / Sector:
Investment Company
29 September 2020
Armadale Capital Plc
('Armadale' the 'Company' or the 'Group')
Interim Results
Armadale, the AIM quoted investment company focused on natural
resource projects in Africa, is pleased to announce its unaudited
interim results for the six months ended 30 June 2020.
Highlights:
-- Mahenge Liandu Graphite Project established as a large, long life
graphite deposit capable of producing high quality graphite concentrate
for the rapidly emerging EV market through optimised Definitive
Feasibility Study ('DFS')
-- High-grade JORC compliant Indicated and inferred mineral resource
estimate of 59.48Mt @ 9.8% TGC with outstanding purity of up to of
99.99% TGC achievable using conventional treatment
-- US$985m pre-tax cashflow to be generated from initial 15 year mine
life utilising just 25% of the resource, which remains open in
multiple directions offering significant further upside
-- Estimated pre-tax NPV of US$430m and IRR of 91%
-- Average annual production of large flake high-purity graphite of
109ktpa
-- Low cost, fast-tracked production to be delivered through staged ramp-up
-- 60,000tpa graphite concentrate to be produced for the first three
years (Stage 1) before increasing to life of mine average of
109,000tpa (Stage 2)
-- Low capital cost estimate - Stage 1 is US$39.7m, including
contingency of U$S4.1m or 15% of total direct capital cost with
1.6 year (after tax) payback period from first production based on
an average sales price of US$1,112/t
-- Stage 2 expansion to be funded from cashflow
-- Significant commercial potential, fuelled by growth in the electric
vehicle and renewable energy market
-- Signed NDAs with two separate parties with the aim of advancing
project level funding discussions with a view to bringing in an
investment partner to progress through to mine construction
-- Two additional MoUs signed to supply high quality graphite
products produced at Mahenge Liandu -- currently focussed on
converting these to binding offtake agreements
-- Post period, in August 2020, commenced testing with Australia's
Commonwealth Scientific and Industrial Research Organisation
('CSIRO') to better to evaluate Mahenge natural flake graphite for
its suitability for use in the battery graphite market
-- Progressing licencing applications ahead of commencing mine construction
-- Projected timeline to first production is expected to be
approximately 10-12 months from the start of construction
-- Mining Licence application process commenced in June 2020 with the
submission to the Department of Energy and Minerals
-- Post Period, in September 2020, submitted the Environmental and
Social Impact Assessment ('ESIA') to the National Environment
Management Council ('NEMC') of Tanzania
-- Board strengthened to support company transition from explorer to
producer with the appointments of:
-- Ms Amne Suedi as Non-Executive Director in January 2020
-- Mr Matt Bull as Non-Executive Director in April 2020
Nick Johansen, Director of Armadale, said: "The first half of
2020 has seen us firmly establish Mahenge Liandu as the large, long
life, low cost graphite deposit we know it to be. The enhanced
numbers of the DFS clearly highlight the significant value
potential of our flagship asset, which is primed to cater to rising
graphite demand in light of EV and renewable energy market
developments. Indeed, the outlook for graphite is strong with
market analysts predicting that the global graphite market will
grow to US$21.4bn by 2024 at a CAGR of 5.6%, with demand for flake
graphite, such as that which we will be producing at Mahenge,
rising from less than 600,000tpa in 2014 to more than 1.6Mtpa in
2025 and 2Mtpa by 2028. Our focus and commitment is therefore on
ensuring we meet this demand. To this end we have defined a staged
development model that will enable us to commence production in as
short a time frame as possible whilst minimising capital
expenditure to ensure we continue to maximise value for our
stakeholders.
"Testament to the quality of our asset and sense of our
development approach, we have received significant interest from a
number of commercial parties and are now progressing two MoUs into
binding offtake agreements for the supply of our graphite product.
Alongside this, we are advancing project level funding discussions
with two prospective parties so that we can progress our project
through to mine construction in a way that minimises dilution for
shareholders. We also very much look forward to the results from
the test work being undertaken by CSIRO, which we hope will further
support our marketing efforts in promoting Mahenge graphite as a
high-value product for the rapidly expanding EV market.
"Ultimately we are doing all we can to ensure that once we have
our Mining Licence granted, we are ready for action. The next 12-18
months should be incredibly formative for our company and we look
forward to continuing to keep shareholders abreast of developments.
In the meantime, I would like to give my thanks to all for their
continued to support and commend the team on their excellent hard
work during what has become an unprecedented time globally.
Ensuring the safety of our team is naturally our priority and as we
implement new COVID compliant safety measures, we are delighted to
confirm that progress continues to be made and our overriding
objectives for Mahenge Liandu remain unchanged."
Directors' Statement
The six-month period to 30 June 2020 has seen considerable
advancement of the Mahenge Liandu Graphite Project in Tanzania
('Mahenge Liandu' or the 'Project'), with delivery of the
Definitive Feasibility Study ('DFS'), which was completed in March
2020, and an updated DFS, which was announced in June 2020.
The Board continues to review additional investment
opportunities and also holds a portfolio of quoted investments
where the Board considers there is an opportunity for material
capital appreciation. The Board may invest in additional
opportunities, in line with its investing policy, with any material
investments notified to the market as appropriate.
The Company raised GBP550,000 in a private placement during the
period. A further GBP438,000 has been raised from warrant and
option exercises and GBP395,000 of the loan notes issued in 2019
have been converted into ordinary shares. The Company finished the
period with GBP436,000 cash at hand.
The Directors would like to take this opportunity to thank
shareholders for their ongoing support and commitment and look
forward to providing further updates as the Company continues to
advance Mahenge Liandu towards production, realising its
increasingly demonstrable potential and building value for
shareholders.
For and on behalf of the Board
29 September 2020
FINANCIAL STATEMENTS
FOR THE SIX MONTHSED 30 JUNE 2020
Condensed Consolidated Statement of Comprehensive Income
For the six months ended 30 June 2020
Unaudited
Six months ended
30 June 30 June
2020 2019
GBP'000 GBP'000
Administrative expenses (176) (187)
Share based payment charges - (21)
Change in fair value of derivative 37 -
Change in fair value of investments 2 -
Finance costs (22) (8)
Loss before taxation (159) (216)
Taxation - -
Loss from continuing operations (159) (216)
Profit from discontinued operations, net of tax (note
3) - 240
(Loss)/profit after taxation (159) 24
Other comprehensive income
Items that may be reclassified to profit or loss:
Exchange differences on translating foreign entities (13) 26
Total comprehensive (loss)/income attributable to
equity holders of the parent company (172) 50
Pence Pence
(Loss)/Earnings per share attributable to equity
holders of the parent company (note 4) Total
(loss)/profit per share - basic (0.04) 0.01
- fully diluted (0.04) 0.01
Loss per share from continuing operations - basic (0.04) (0.06)
- fully diluted (0.04) (0.06)
Consolidated Statement of Financial Position
At 30 June 2020
Unaudited Audited
30 June 30 June 31 December
2020 2019 2019
GBP'000 GBP'000 GBP'000
Assets
Non-Current assets
Exploration and evaluation assets 4,084 3,457 3,705
Investments 108 60 106
4,192 3,517 3,811
Current assets
Trade and other receivables 303 92 159
Cash and cash equivalents 436 42 96
739 134 255
Total assets 4,931 3,651 4,066
Equity and liabilities
Equity
Share capital (note 5) 3,197 3,111 3,139
Share premium 22,122 21,160 21,037
Shares to be issued 286 286 286
Share option and warrant reserve 813 116 662
Foreign exchange reserve 75 208 88
Retained earnings (22,420) (22,106) (22,400)
Total equity 4,073 2,775 2,812
Current liabilities
Trade and other payables 253 180 268
Loans 604 696 867
Derivative liability 1 - 119
Total liabilities 858 876 1,254
4,931 3,651 4,066
Total equity and liabilities
Unaudited Consolidated Statement of Changes in Equity
For the period ended 30 June 2020
Shares Share Foreign
Share Share to be Option Exchange Retained
Capital Premium Issued Reserve Reserve Earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance 1
January 2019 3,038 20,570 286 95 421 (22,129) 2,281
Loss for the
period - - - - - (273) (273)
Other
comprehensive
loss - - - - (333) - (333)
Total
comprehensive
loss for the
period - - - - (333) (273) (606)
Issue of
shares and
warrants 101 658 - 546 - - 1,305
Expenses of
issue - (191) - - - - (191)
Transfer on
exercise of
warrants - - - (2) - 2 -
Share based
payment
charges - - - 23 - - 23
Total other
movements 101 467 - 567 - 2 1137
Balance 30
December
2019 3,139 21,037 286 662 88 (22,400) 2,812
Loss for the
period - - - - - (159) (159)
Other
comprehensive
loss - - - - (13) - (13)
Total
comprehensive
loss for the
period - - - - (13) (159) (172)
Issue of
shares 58 1,085 - 240 - - 1,383
Transfer on
exercise of
warrants - - - (89) - 89 -
Release on
conversion of
loan notes - - - - - 50 50
Total other
movements 58 1,085 - 151 - 139 1,433
Balance 30
June 2020 3,197 22,122 286 813 75 (22,420) 4,073
The following describes the nature and purpose of each reserve
within shareholders' 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 IFRS2 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
Consolidated Statement of Cash Flows
For the period ended 30 June 2020
Unaudited Audited
Six Months ended Year ended
30 June 2020 30 June 2019 31 December 2019
GBP'000 GBP'000 GBP'000
Cash flows from operating
activities
(Loss)/profit before taxation (159) 24 (273)
Foreign exchange release on
disposal of overseas operation - (240) (240)
Share based payment charge - 21 23
Change in fair value of
derivative (37) - 45
Change in fair value of
investments (2) - (46)
Finance costs 22 7 21
(176) (188) (470)
Changes in working capital
Receivables (16) (38) (44)
Payables 8 (133) (15)
Net cash used in operating
activities (184) (359) (529)
Cash flows from investing
activities
Expenditure on exploration and
evaluation assets (350) (162) (479)
Purchase of listed investments - (59) (59)
Net cash used in investing
activities (350) (221) (538)
Cash flows from financing
activities
Proceeds from share placement 845 709 969
Issue costs - (132) (46)
Issue of loan notes - - 400
Loan repayment - - (235)
Proceeds from loan 50 - 30
Interest paid (21) - -
Net cash from financing
activities 874 577 1,118
Net increase/(decrease) in cash
and cash equivalents 340 (3) 51
Cash and cash equivalents at 1
January 2020 96 45 45
Cash and cash equivalents at 30
June 2020 436 42 96
Notes to the unaudited condensed consolidated financial
statements
For the period ended 30 June 2019
1. Incorporation and principal activities
Country of incorporation
Armadale Capital Plc was incorporated in the United Kingdom as a
public limited company on 19 August 2005. Its registered office is
1 Arbrook Lane, Esher, Surrey, KT10 9EG.
Principal activities
The principal activity of the Group during the period was that
of an investment company.
2. Accounting policies
2.1 Statement of compliance
The financial information for the six months ended 30 June 2020
and 30 June 2019 is unreviewed and unaudited and does not
constitute the Group's statutory financial statements for those
periods within the meaning of Section 434 of the Companies Act
2006. The comparative financial information for the year ended 31
December 2019 has been derived from the Annual Report and Accounts,
which were approved by the Board of Directors on 2 June 2020 and
delivered to the Registrar of Companies. The report of the Auditors
on those accounts was unqualified and did not contain any statement
under Section 498 of the Companies Act 2006.
This condensed set of financial statements has been prepared in
accordance with IAS 34 'Interim Financial Reporting' as adopted by
the European Union. This condensed set of financial statements
should be read in conjunction with the annual financial statements
for the year ended 31 December 2019 which have been prepared in
accordance with International Financial Reporting Standards (IFRSs)
as adopted by the European Union.
The accounting policies adopted are consistent with those of the
annual financial statements for the year ended 31 December 2019 as
described in those annual financial statements.
In respect of new financial reporting standards which came into
effect for reporting periods beginning on 1 January 2020, the
Directors consider that their implementation has no material effect
on the financial information presented in this statement.
2.2 Going Concern
The financial statements have been prepared on the going concern
basis as, in the opinion of the Directors, there is a reasonable
expectation that the Group will continue in operational existence
for the foreseeable future. The Company's ability to continue as a
going concern and to achieve its long term strategy of developing
its exploration projects is dependent on the extension and/or
conversion of its loan notes and further fundraising.
2.3 Exploration and evaluation assets
These assets are recorded at cost and are amortised over their
expected useful life on a pro rata basis of actual production for
the period to expected total production.
2.4 Investments
Investments are stated at fair value.
3. Release of exchange gains on overseas operation
The Company's interest in the Mpokoto gold project was sold on
11 January 2019, at which point the accumulated net foreign
exchange gains arising on historical revaluations of the investment
were released to income from the foreign exchange reserve.
4. Loss per share
The calculation of total basic loss per share is based on a loss
of GBP159,000 (2019, profit of GBP24,000) and on 419,492,599 (2019,
352,164,475) Ordinary Shares, being the weighted average number of
Ordinary Shares in issue during the period.
The calculation of fully diluted earnings per share in 2019 was
based on 406,666,587 diluted shares, being the weighted average
number of diluted shares during the period. In 2020, there was no
difference between basic loss per share and diluted loss per share
as the Group reported a loss for the period.
5. Share capital
During the period, the Company placed 24,444,444 Ordinary Shares
in the Capital of the Company to raise GBP550,000 with
institutional and other investors. Also during the period,
GBP395,000 of loan notes were converted into 13,166,663 ordinary
shares and 19,979,702 options and warrants were exercised providing
proceeds of GBP437,553
**ENDS**
For further information, please visit the Company's website
www.armadalecapitalplc.com, follow Armadale on Twitter
@ArmadaleCapital or contact:
Enquiries:
Armadale Capital Plc
Tim Jones, Company Secretary +44 (0)20 7236 1177
Nomad and joint broker: finnCap Ltd
Christopher Raggett / Edward 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 inferred mineral resource estimate of 51.1Mt @ 9.3% TGC.
Marking the project 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.
In addition to this project Armadale has a portfolio of quoted
investments.
View source version on businesswire.com:
https://www.businesswire.com/news/home/20200929005476/en/
CONTACT:
Armadale Capital Plc
SOURCE: Armadale Capital Plc
Copyright Business Wire 2020
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