TIDMACP
RNS Number : 2575A
Armadale Capital PLC
28 May 2021
Armadale Capital Plc / Index: AIM / Epic: ACP / Sector:
Investment Company
Date 28 May 2021
Armadale Capital Plc ('Armadale' or 'the Company')
Subscription and Investment Portfolio Update
Armadale Capital plc (LON: ACP), the AIM quoted investment group
focused on natural resource projects in Africa is pleased to
announce that is has raised GBP850,000 via a private subscription
with certain existing high-net worth shareholders in the Company
(the 'Subscription').
As part of the Subscription, 18,888,889 new ordinary shares
('Ordinary Shares') ('Subscription Shares') in the Company will be
issued at a price of 4.5 pence per Ordinary Share which was the
mid-market price on 27 May 2021, being the last trading day
immediately preceding this announcement. In addition, Subscribers
will also receive one warrant for each Ordinary Share subscribed
for, exercisable at a price of 7.00 pence and expiring on the
three-year anniversary of the date of issue (the 'Warrants'). In
aggregate, 18,888,889 Warrants will be issued alongside this
Subscription.
The Subscription was carried out directly with investors and
there were no broker fees paid.
Use of Proceeds
Following the delivery of an extremely compelling feasibility
study for the Mahenge Liandu graphite project in Tanzania, these
funds will strengthen the Company's balance sheet as it seeks to
progress development finance workstreams ahead of construction;
they will also enable Armadale to further progress essential Front
End Engineering Design studies being carried out by the Chinese
group Xinhai Mineral EPC and also be used for general working
capital purposes.
Investment Portfolio Update
In addition to driving development at Mahenge Liandu graphite
project, Armadale continues to operate as a diversified investing
company investing in natural resource projects in Africa and to
this end it has maintained a small portfolio of quoted investments,
principally in resource companies where the Directors believe there
are opportunities for capital gain.
With regard to these investments, Armadale wishes to inform
investors that recently there have been significant gains in the
Company's listed portfolio and that the current value of listed
investments is approximately CAD 1.4 million.
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.
Armadale Chairman, Nick Johansen, commented:
"It is fantastic to have such strong inward demand by investors
and to be able to conduct this Subscription without a discount to
the prevailing share price - a testament indeed to the compelling
economics of Mahenge and a recognition of the way Armadale has
significantly derisked the Mahenge project and driven significant
shareholder value since previous fundraises more so in recent
months with the approval of the Environmental and Social Impact
Assessment which is the final necessary step in our Mining Licence
application process. We have also delivered a successful first
phase of our FEED studies testwork thus confirming our process
flowsheet as per our Definitive Feasibility Study and helping to
ratify the exceptional economics of the project. These funds will
also help to strengthen the Company's existing balance sheet as we
look to further potential progress development finance options with
the number of finance partner / provider candidates with whom we
are currently engaged.
We are also delighted to report that the Company's quoted
investment portfolio has done particularly well as of late and with
a present value of circa CAD 1.4 million, has delivered healthy
returns for shareholders. The Company will continue to review
opportunities as appropriate; investors should note that profits
and capital from listed investments may at some stage be used to
progress development at our Mahange graphite project. We look
forward to updating the market regularly."
Total Voting Rights and Share Admission
Following Admission, the Company will have 501,167,889 Ordinary
Shares of 0.1 pence each in issue with no shares held in treasury,
each with one vote per share. Therefore, the total number of voting
rights in the Company will be 501,167,889. This figure may be used
by shareholders in the Company as the denominator for calculations
to determine if they have a notifiable interest in the share
capital of the Company under the FCA's Disclosure Guidance and
Transparency Rules, or if such interest has changed.
The Subscription is conditional upon, inter alia, admission
('Admission') of the Subscription Shares to trading (which will be
issued and settled in CREST to the extent possible) on AIM.
Application will be made for Admission, which is expected to occur
on or around 8.00 a.m. on 04 June 2021.
**ENDS**
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
Notes
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 - 59.5Mt at 9.8% TGC. This includes 11.5Mt
@ 10.5% Measured 32.Mt Indicted at 9.6% and 15.9Mt at 9.8% 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.
The Company's updated Definitive Feasibility Study (June 2020)
confirmed Mahenge as a long-life low-cost graphite project with a
US$430m NPV and IRR of 91% based on a two-stage expansion strategy
comprising:
-- Stage One - processing plant and infrastructure at a nominal
design basis rate of 0.4-0.5 Mt/pa to produce a nominal 60,000t/pa
graphite concentrate in the first three years of production
-- Stage Two - a second 0.5 Mt/y plant and associated additional
infrastructure doubling throughput to 1 Mt/y from Year 5 of
operation
The DFS shows that Armadale can be a significant low-cost
supplier to the graphite industry with the potential to generate
pre-tax cashflows of US$985m over an initial 15 year mine-life and
scope for further improvement as this utilises just 25% of the
current resource, which remains open in multiple directions.
Projected timeline to first production is expected to be
approximately 10-12 months from the start of construction and the
capital cost estimate for Stage 1 is US$39.7m, which includes a
contingency of U$S4.1m or 15% of total direct capital cost, with a
1.6 year payback for Stage 1 (after tax) based on an average sales
price of US$1,112/t. Stage 2 expansion is expected to be funded
from cashflow.
More information can be found on the website
www.armadalecapitalplc.com .
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END
MSCFLFSSEVITFIL
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May 28, 2021 10:45 ET (14:45 GMT)
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