Exploration Update and Licencing Applications Commence at Mahenge Liandu

Armadale Capital Plc

Armadale Capital Plc / Index: AIM / Epic: ACP / Sector: Investment Company

29 January 2018

Armadale Capital Plc (‘Armadale’ or ‘the Company’)

Exploration Update and Licencing Applications Commence at Mahenge Liandu

Armadale, the AIM quoted investment company focused on natural resource projects in Africa, is pleased to announce that the exploration and development programme at the Mahenge Liandu Graphite Project in Tanzania (‘Mahenge Liandu’) is now well underway for 2018.

Overview

• Social and environmental study has now commenced, marking the first step in the application process for mining lease approvals from the Tanzanian Government
• Completed a detailed topographic survey of the proposed mining area
• Additional trenching has confirmed the continuity of the deposit between drilled lines and to the north of the current drilling pattern – results will be incorporated into an updated resource model that is expected to be completed by the end of February 2018
• The deposit remains open to the north-south and down dip with significant potential for expansion with further drilling
• Mapping of a graphite schist unit to the east of the Mahenge Liandu deposit has highlighted potential for a second deposit within the licence area with medium to high grade outcropping mineralisation mapped in a north-south trending unit over 5km of strike
• Following the rainy season, further drilling will be undertaken to help define the product quality and assist with marketing of the high-quality graphite concentrates – negotiations with a diamond drilling company are ongoing and drilling is targeted to commence mid-April 2018
• A Scoping Study for the Project is progressing and will incorporate the updated resource model – results of the Scoping Study are expected by the end of Q1 2018

Nick Johansen, Director of Armadale said: “We are pleased at the progress we are making in developing Mahenge Liandu and hope to see an upgrade to the mineral resource estimate by the end of February, which we believe will provide investors, and potential end users, with a better sense of the size and scale of our Mahenge Liandu project. In addition to proving up the resource potential of the Project, these results will feed into the ongoing Scoping Study, which remains on track for completion in Q1 2018, marking an important milestone in the advancement of our Project. In support of this development, we are delighted to confirm that the environmental and social studies have commenced earlier than expected. With these results due in the near term and a new exploration programme commencing as soon as the weather permits, we are expediting project development on all fronts. 2018 is set to be incredibly active and we look forward to regularly updating shareholders on progress in the forthcoming weeks and months.”

Commencement of environmental and social work programme

An independent Environmental Social Impact Assessment (‘ESIA’) report, which examines the social and environmental impacts of the proposed mine development at Mahenge Liandu, has now commenced. The report, together with a feasibility study over the Project and a relocation action plan (‘RAP’), are the key steps needed to secure the granting of mining licences over the Project. The study is being conducted by local environmental consults Enviromine. Armadale plans to commence a detailed feasibility study and RAP on completion of the ongoing Scoping Study, which is due in Q1 2018, allowing for mining lease applications to be submitted later in 2018.

Exploration programme update

The exploration programme continues to progress with the completion of ground based Differential Global Positioning System surveys, as well as a more detailed drone survey covering the proposed mining area. The results from these surveys will aid mine planning and resource estimation work, which is currently nearing completion.

A Scoping Study, incorporating the updated resource model, is on-track to be completed in Q1 2018 with an initial stage 1 throughput of 400,000tpa expanding to 800,000tpa in stage 2. The study is being completed by experienced Perth based engineering firm BatteryLimits.

A programme of trenching designed to confirm continuity of the deposit has now been successfully completed showing extensions to the known mineralisation to the north and good continuity between drill lines.

The next phase of exploration will focus on diamond drilling, which will aid in defining the product quality and assist with marketing of the high-quality graphite concentrates from the deposit. Negotiations with the drilling company, Coreworthy Drilling, are now advanced with drilling expected to commence at the conclusion of the wet season.

Ongoing mapping designed to help with the exploration drilling programme for 2018 has identified wide zones on mineralisation to the west of the Mahenge Liandu deposit. No sampling has yet been conducted but will be completed prior to drill testing that will make up part of the 2018 drilling programme. It is noted that the Mahenge Liandu deposit remains open to the north south and down dip of current drilling indicating potential for further expansion.

The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.

**ENDS**

Enquiries:
Armadale Capital Plc Tim Jones, Company Secretary		+44 20 7236 1177
Nomad and broker: finnCap Ltd Christopher Raggett / Simon Hicks		+44 20 7220 0500
Joint Broker: Beaufort Securities Limited Jon Belliss		+44 20 7382 8300
Press Relations: St Brides Partners Ltd Susie Geliher / Charlotte Page		+44 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 40.9Mt @ 9.41% TGC. At least 32Mt of this resource has an average grade of 10.47% TGC, 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.

Aside from Mahenge Liandu, Armadale has an interest in a portfolio of quoted investments and in January 2018 agreed to sell its interest in the Mpokoto Gold Project in the Democratic Republic of Congo for total potential consideration of US$562,500 and a 1.5% royalty on gold produced. Completion of the sale agreement is subject to execution of a formal binding agreement, which is expected in Q1 2018.

More information can be found on the website www.armadalecapitalplc.com

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