TIDMACP
RNS Number : 3489N
Armadale Capital PLC
29 September 2021
Armadale Capital Plc / Index: AIM / Epic: ACP / Sector:
Investment Company
29 September 2021
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 2021.
Highlights:
-- The focus of the Company throughout the interim reporting
period was to obtain all required permits to commence development
of the high-grade long life Mahenge Liandu Graphite project.
o Subsequent to the end of the half year the mining licence was
granted for an initial 10-year term which can be extended marking a
significant milestone for the Company.
o The mining licence, should it be extended would cover the
initial 15 year mine life utilising only 25% of the estimated
Resource.
-- Progressing licencing applications ahead in preparation for development of Mahenge Liandu
o Mining licence application process commenced in June 2020 with
the submission of the mining licence application to the Department
of Energy and Minerals.
o The Environmental and Social Impact Assessment ('ESIA') to the
National Environment Management Council ('NEMC') of Tanzania was
granted in March 2021.
o A mining licence covering the Project was granted in September
2021 (post-period end).
-- Natural Flake Graphite Testing Confirms Suitability For Use In Lithium-Ion Battery Anodes
o Positive confirmation received in June 2020 from Australia's
Commonwealth Scientific and Industrial Research Organisation that
Armadale's natural flake graphite is suitable for use in
lithium-ion batteries.
-- 1st phase of Front-End Engineering Design Studies undertaken
by Chinese EPCM Xinhai Mineral EPC completed
o Positive results received confirming a premium quality high
purity graphite concentrate, also suitable for the battery anode
market and can be produced from Mahenge using conventional plant as
outlined in the Company's existing Definitive Feasibility
Study.
o Included metallurgical bulk test work programme which further
confirmed the efficacy of the Company's intended process flow sheet
and helped ratify project economics.
During the period Armadale further established Mahenge as a
large, long life graphite developer with significant commercial
potential capable of producing high quality graphite concentrate
for the rapidly emerging EV market and as previously advised,
strategic next steps are focused upon the completion of development
funding options specifically a debt package for the project, the
Company is also currently in discussions with a number of potential
finance partners; we are hoping to be able to announce some further
progress with regards to these efforts and also with our offtake
discussions in the near term through optimised Definitive
Feasibility Study ('DFS').
Key metrics for Armadale's Mahenge Graphite project:
o 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
o Potential for 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
o Estimated pre-tax NPV of US$430m and IRR of 91%
o Average annual production of large flake high-purity graphite
of 109ktpa
Nick Johansen, Director of Armadale, said: "The first half of
2021 has seen Armadale focus on project permitting which has seen
the Company subsequent to the end of the half year progress to
being a fully permitted development company. The mining permit is
the culmination of a long project of advancement for the Company,
which has progressed from the discovery of the deposit through to
feasibility study and now is development ready. The Company is now
well placed to proceed towards financing and development in an
environment where there is increasing demand for graphite and we
look forward to updating investors with regards to how our
activities progress on this workstream as well as offtakes and
additional development activities since the end of the 2021
half-year period"
For and on behalf of the Board
29 September 2021
FINANCIAL STATEMENTS
FOR THE SIX MONTHSED 30 JUNE 2021
Condensed Consolidated Statement of Comprehensive Income
For the six months ended 30 June 2021
Unaudited
Six months ended
30 June 30 June
2021 2020
GBP'000 GBP'000
Administrative expenses (157) (176)
Change in fair value of derivative - 37
Change in fair value of investments 139 2
Finance costs (9) (22)
Loss before taxation (27) (159)
Taxation - -
-------------------- -------------------
Loss after taxation (27) (159)
Other comprehensive income
Items that may be reclassified to
profit or loss:
Exchange differences on translating
foreign entities 2 (13)
-------------------- -------------------
Total comprehensive loss attributable
to equity holders of the parent company (25) (172)
==================== ===================
Pence Pence
Loss per share attributable to equity
holders of the parent company (note
3)
Basic and fully diluted (0.01) (0.04)
==================== ===================
Consolidated Statement of Financial Position
At 30 June 2021
Unaudited Audited
30 June 30 June 31 December
2021 2020 2020
GBP'000 GBP'000 GBP'000
Assets
Non-Current assets
Exploration and evaluation assets 4,556 4,084 4,417
Investments 421 108 282
4,977 4,192 4,699
Current assets
Trade and other receivables 559 303 121
Cash and cash equivalents 562 436 252
------------- ------------- ----------------
1,121 739 373
------------- ------------- ----------------
Total assets 6,098 4,931 5,072
============= ============= ================
Equity and liabilities
Equity
Share capital (note 4) 3,237 3,197 3,207
Share premium 23,148 22,122 22,348
Shares to be issued 286 286 286
Share option and warrant reserve 972 813 762
Foreign exchange reserve 129 75 127
Retained earnings (22,376) (22,420) (22,406)
------------- ------------- ----------------
Total equity 5,396 4,073 4,324
============= ============= ================
Current liabilities
Trade and other payables 96 253 171
Loans 606 604 577
Derivative liability - 1 -
Total liabilities 702 858 748
============= ============= ================
Total equity and liabilities 6,098 4,931 5,072
============= ============= ================
Unaudited Consolidated Statement of Changes in Equity
For the period ended 30 June 2021
Share Share Shares Share Foreign Retained Total
Capital Premium to be Option Exchange Earnings
GBP'000 GBP'000 Issued Reserve Reserve GBP'000 GBP'000
GBP'000 GBP'000 GBP'000
Balance 1
January 2020 3,139 21,037 286 662 88 (22,400) 2,812
Loss for the
year - - - - - (196) (196)
Other
comprehensive
income - - - - 39 - 39
------------ ------------ ------------ ------------ ------------- ------------- ------------
Total
comprehensive
loss for the
period - - - - 39 (196) (157)
------------ ------------ ------------ ------------ ------------- ------------- ------------
Issue of
shares and
warrants 68 1,311 - 239 - - 1,618
Release on
conversion
of loan notes - - - - - 51 51
Transfer on
exercise
of warrants - - - (139) - 139 -
Total other
movements 68 1,311 - 100 - 190 1,669
------------ ------------ ------------ ------------ ------------- ------------- ------------
Balance 31
December
2020 3,207 22,348 286 762 127 (22,406) 4,324
Loss for the
period - - - - - (27) (27)
Other
comprehensive
loss - - - - 2 - 2
------------ ------------ ------------ ------------ ------------- ------------- ------------
Total
comprehensive
loss for the
period - - - - 2 (27) (25)
------------ ------------ ------------ ------------ ------------- ------------- ------------
Issue of
shares 30 800 - 267 - - 1,097
Transfer on
exercise
of warrants - - - (57) - 57 -
Total other
movements 30 800 - 210 - 57 1,097
------------ ------------ ------------ ------------ ------------- ------------- ------------
Balance 30
June 2021 3,237 23,148 286 972 129 (22,376) 5,396
============ ============ ============ ============ ============= ============= ============
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 2021
Unaudited Audited
Six Months ended Year ended
30 June 31 December
2021 30 June 2020 2020
GBP'000 GBP'000 GBP'000
Cash flows from operating activities
Loss before taxation (27) (159) (196)
Change in fair value of derivative - (37) (37)
Change in fair value of investments (139) (2) (176)
Finance costs 9 22 31
(157) (176) (378)
Changes in working capital
Receivables 9 (16) 11
Payables (33) 8 (7)
------------ ----------------- ----------------
Net cash used in operating activities (181) (184) (374)
============ ================= ================
Cash flows from investing activities
Expenditure on exploration and
evaluation assets (157) (350) (689)
Net cash used in investing activities (157) (350) (689)
============ ================= ================
Cash flows from financing activities
Proceeds from share issues 648 845 1,246
Loan repayment - - (50)
Proceeds from loan - 50 50
Interest paid - (21) (27)
Net cash from financing activities 648 874 1,219
============ ================= ================
Net increase/(decrease) in cash
and cash equivalents 310 340 156
Cash and cash equivalents at
1 January 2021 252 96 96
Cash and cash equivalents at
30 June 2021 562 436 252
============ ================= ================
Notes to the unaudited condensed consolidated financial
statements
For the period ended 30 June 2021
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 2021
and 30 June 2020 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 2020 has been derived from the Annual Report and Accounts,
which were approved by the Board of Directors on 28 May 2021 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 2020 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 2020 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 2021, 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 further fundraising.
During the period, a total of GBP1,095,350 was raised from share
placing and warrant exercises (see note 4). Since the period end,
all remaining loan notes, together with accrued interest, have been
converted into Ordinary Shares in the Company, which is now debt
free.
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. Loss per share
The calculation of loss per share is based on a loss of
GBP27,000 (2020, GBP159,000) and on 480,763,732 (2020, 419,492,599)
Ordinary Shares, being the weighted average number of Ordinary
Shares in issue during the period.
There was no difference between basic loss per share and diluted
loss per share as the Group reported a loss for the period.
4. Share capital
During the period, the Company placed 18,888,889 Ordinary Shares
in the Capital of the Company to raise GBP850,000 with
institutional and other investors. Also during the period
10,467,913 warrants were exercised providing proceeds of
GBP245,350.
**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 broker: finnCap Ltd
Christopher Raggett / Seamus Fricker /Edward
Whiley +44 (0)20 7220 0500
------------------------
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulations (EU No. 596/2014) which is part of UK law by virtue of
the European Union (Withdrawal) Act 2018. Upon the publication of
this announcement, this inside information is now considered to be
in the public domain.
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
IR GUGDCBXDDGBC
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