Armadale raises £550 000 to advance Tanzania project

Armadale raises £550 000 to advance Tanzania project

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Aim-listed Armadale Capital has raised £550 000 through a private subscription with certain existing high-net-worth shareholders in the company.

As part of the subscription, 24.4-million new ordinary shares will be issued at a price of 2.25p a share, representing a 4.65% premium to the closing mid-market price on April 29.Moreover, subscribers will also receive one warrant for each ordinary share subscribed for.
Following the delivery of an "extremely compelling" feasibility study for the Mahenge Liandu graphite project, in Tanzania, these funds will be used to progress the several definitive feasibility study (DFS) workstreams and for general working capital purposes.

These workstreams include a complete DFS optimisation from detailed modelling of higher-grade zones to increase head grade in the mine schedule; to progress existing offtake agreements from memorandums of understanding to binding agreements; and to finalise the application for full a mining licence.

It also includes starting the detailed design engineering stage to move to construction readiness.

Lastly, this will also involve advancing discussions with potential debt finance partners and project level development funding for construction.

“It is a testament to the outstanding economics of the Mahenge Liandu graphite project that existing investors have shown such strong demand to support the company in moving forward as we focus on transitioning from explorer to producer.

"Compelling economics, combined with low technical risks and 100% ownership make Mahenge an incredibly attractive investment and this demonstration of support is even more pleasing given current tightness in the equity capital markets,” says Armadale chairperson Nick Johansen.

“With extremely low running costs, these funds, together with our existing loan facility, put the company in a solid financial position prior to the intended conclusion of project financing for mine construction, where we are already in discussion with a number of potential joint venture partners and strategic investors,” he adds.

Armadale’s wholly-owned Mahenge Liandu graphite project is located in a highly prospective region. It has a high-grade Joint Ore Reserves Committee-compliant indicated and inferred mineral resource estimate of 59.5-million t at 9.8% TGC.

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.
A recently completed definitive feasibility study confirmed Mahenge as a long-life low-cost graphite project.

Projected timeline to first production is expected to be about ten to 12 months from the start of construction. 

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