---ADDS BROKER COMMENT---
An expanded scoping study for Armadale Capital's (LON:ACP) Mpokoto gold project in the Democratic Republic of Congo shows it is an "attractive" project, which is still economic at a gold price as low as US$1,000 an ounce.
The latest report follows an initial study in April this year, which focused on a portion of the shallower oxide ores, and incorporates the results of a July drill programme and includes all ore types.
The net present value (NPV) of the project is now put at US$55.3mln compared to US$33mln in the initial study. Average annual production is now put at 25,600 ounces compared to 24,000 ounces.
The life of mine for the open pit is raised 80% to nine years from five previously and the average operating cash cost put at US$647 per ounce (US$649 per ounce).
A start- up capital cost of US$20.42 million remains low, said the firm.
Justin Lewis, director of Armadale, said: "The results of this updated and expanded scoping study, including the whole ore body, demonstrate how far the Mpokoto Gold project has developed since being acquired by Armadale in August 2013.
"This study demonstrates a project with a nine year mine life, producing over 230,000 oz of gold at a low operating cost of less than $650/oz.
"In an uncertain gold price environment, the combination of being in the bottom quartile of producing African gold mines in terms of operating costs, and a relatively low capital requirement makes Mpokoto a very attractive project, which remains economic even at a gold price as low as $1,000/oz.
“We continue to focus on advancing Mpokoto to the next stage of its development before targeting commercial gold production."
Armadale said it will carry out further drilling in light of the exploration target identified to further enlarge the overall resource as well further extend the mine life.
In parallel, work will begin shortly on a definitive feasibility study, with a view to completing both in the first quarter of next year.
"This additional work will result in construction not commencing before Q3 2015 with first production in H1 2016. We look forward to updating the market on these development milestones in due course.
"At the same time the board intends to commence discussions with regards to financing the development and construction of the project."
Broker VSA said the firm was hoping to progress the project to production as quickly as possible.
"While we expect more good news to follow, we believe the H1 2016 production date may be a little ambitious in a country like the DRC, given permitting approval uncertainties."
Shares eased 2.86% to 0.085p.