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

10 February 2021

Armadale Capital Plc

('Armadale' or 'the Company')

 Armadale Reports Successful Chinese EPC Test-Work

Armadale Capital plc the AIM quoted investment group focused on natural resource projects in Africa, is pleased to report that it has significantly progressed a metallurgical bulk test work programme.

HIGHLIGHTS

·    A spectrum analysis and multi-element analysis to assess ore properties has been completed.

·    A beneficiation test program to establish yield rate, fixed carbon content and carbon recovery rate has been completed.

·    The tests to date have established that a typical process flow sheet for the treatment of Graphite ore is able to produce high quality high purity graphite concentrate.

·    The work to date has established that the selection of equipment used in the feasibility study and is expected to confirm the low capex high margin project economics from a leading supplier of graphite process plants.

·    Confirmation of capital costs is an essential part of project finance discussions.

·    Test work to date has shown the graphite concentrate is well suited to the battery anode market.

The results of this round of testing are highly encouraging. Natural flake graphite for use in Lithium-ion batteries has significant environmental benefits when compared to synthetic graphite.

The Mahenge graphite deposit can potentially provide a good source of exceptionally high-grade natural flake graphite and be a valuable export commodity for Tanzania.

The programme which is part of the first phase of the Front-End Engineering Design Studies ("FEED Studies") is being undertaken by Chinese Engineering, Procurement, Construction and Manufacturing company Xinhai Mineral EPC ("Xinhai"), part of the Yantai Xinhai group.

It is already demonstrating positive results to confirm that a premium quality high purity graphite concentrate, also suitable for the battery anode market, can be produced from Mahenge using conventional plant as outlined in the Company's existing Definitive Feasibility Study.

Xinhai are a highly experienced, industry-leading Chinese contracting group in the field of optimising mineral processing solutions, mine design and build and equipment manufacturing. The objective of this bulk test work undertaken by Xinhai was to provide sufficient data to confirm the results underpinning the definitive feasibility study, and confirm the preferred flow sheet prior to completion of the Front-End Engineering Design to develop an EPCM fixed price contract.

The finalisation of this programme and the results of these studies are due imminently.

Armadale Chairman, Nick Johansen, commented: 

"We are delighted with the extremely positive progress made by Xinhai with regards to the met-testing FEED studies thus far. This is an essential part of the process to further de-risk the Mahenge graphite project and fundamental step towards advancing through development financing and into production. Through this work with the highly respected Chinese engineering and construction group Xinhai Mineral EPC we now also have industry-leading independent confirmation of our mine processing plant design and build as selected within our Definitive Feasibility Study. In addition to this, we have crucial confirmation that a premium quality, high purity graphite concentrate also suitable for the battery anode market can be produced from Mahenge.

With an exceptional Feasibility Study, Armadale has proved at Mahenge a high-quality project with compelling economics, this testing work through replicating choice and design of plant as determined in our low-capex, high-margin Feasibility Study both ratifies and de-risks the Mahenge considerably. We continue to see interest in financing Mahenge and results of these studies will be folded into the financing process which is gathering pace with a significantly improving graphite market.

We recently announced positive confirmation from Australia's Commonwealth Scientific and Industrial Research Organisation that Armadale's natural flake graphite from our Mahenge graphite project is suitable for use in lithium-ion batteries - an important step in our offtake marketing where feedback has already been more than encouraging. We are also making solid progress with our Environmental and Social Impact Assessment (ESIA) which is one of the final necessary components in the Mining Licence process where receipt of a Mining Licence will be one of the final and de-risking milestones for the Project.

A great deal of important work has been and will continue to be delivered to move through development into financing and production. We look forward to updating across workstreams throughout 2021 beginning with detailed results from both Xinhai EPC testing and further progress towards our Mining Licence in the near-term."

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**

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 Indicated and inferred mineral resource estimate of 59.48Mt @ 9.8% TGC, making it 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.

Other assets Armadale has an interest in, include the Mpokoto Gold project in the Democratic Republic of Congo and a portfolio of quoted investments.

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