logo-loader

Armadale Capital lines up new partner for Mpokoto gold mine

Published: 09:35 28 Sep 2016 BST

Picture of gold and dollars
Armadale has been tryng to get Mpokoto built for over a year

Armadale Capital PLC (LON:ACP) shares soared as it lined up a potential new partner to build its gold mine at Mpokoto in the DRC.

African Mining Services (A-MCS), a completely different company from A –CS, the company that had been carrying out due diligence for the past fifteen months, has negotiated an earn-in for an 85% stake.

Mpokoto has a current resource of 678,000oz of gold from 14.58mln tonnes at 1.45g/t or enough to produce approximately 25,000oz per annum over a nine-year mine life.

A scoping study indicated net present value of US$55.3mln based upon a discount rate of 8% and a gold price of US$1,250/oz.

African Mining has ninety days to decide whether to go ahead or not.

If it does, its investment will be in two stages.

Initially it will put up US$1.25mln for a 25% stake, which will rise to 85% if Armadale cannot raise the US$25mln needed to build the mine.

At that point, African Mining will take over full responsibility for building the mine.

William Frewen, chairman, said the deal meant it can now concentrate on its recently acquired Mahenge Liandu graphite project in Tanzania, where drilling has just started.

He added that in African Mining it was also bringing on board a very experienced mining partner at Mpokoto with knowledge of the DRC and, crucially, access to funding.

“With an established resource, a nine-year mine life at 25,000oz per annum, and favourable economics, we have proven Mpokoto’s commercial viability.

“AMS has the requisite skill set and experience to advance Mpokoto into production and ultimately realise the value of the project.”

The deal is being classified as a related party transaction under AIM rules as African Mining is ultimately owned by Kabunga Holdings, a 13% shareholder in Armadale.

FTSE starts flat, Unilever jumps on ice cream overhaul - Market Report

The FTSE 100 has opened flat, with the largest gain coming from multinational consumer goods heavyweight Unilever. The company lifted more than 5% in early trading after launching plans to sack 7,500 workers as part of an overhaul of its ice cream business. Over in the pharmaceutical...

2 hours ago