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

6 August 2021

Armadale Capital Plc

('Armadale' or 'the Company')

Conversion of Loan Notes and Issue of Equity

Director's Interest in Ordinary Shares

Armadale Capital plc, the AIM quoted investment group focused on natural resource projects in Africa, announces that it has issued notices of conversion in respect of a total of £371,388 nominal of convertible loan notes, together with £240,457 of accrued interest thereon into ordinary shares of 0.1 pence each in the capital of the Company ("Ordinary Shares"), ranking pari passu with the Company's existing Ordinary Shares, at the conversion price of 2 pence per Ordinary Share.  Pursuant to the above, 30,592,250 new Ordinary Shares will be issued.  The Company has applied to the London Stock Exchange to admit the new Ordinary Shares to trading on AIM ("Admission").  It is expected that Admission will become effective on 12 August 2021.  Following the conversion, there will be no further loan notes outstanding.

Following Admission, the Company's issued share capital will consist of 531,759,411 Ordinary Shares with no shares held in Treasury.  This figure may be used as the denominator for the calculations by which shareholders can determine if they are required to notify their interest in, or a change to their interest in, the Company.

Matt Bull, a director of the Company, is a holder of convertible loan notes pursuant to an existing agreement with the Company dated 28 June 2016 and will receive 12,318,700 Ordinary Shares pursuant to the conversion, taking his total holding to 45,521,492 Ordinary Shares, representing 8.56% of the enlarged share capital.

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.

Notification and public disclosure of transactions by persons discharging managerial responsibilities and persons closely associated with them are set out below pursuant to the EU Market Abuse regulation.