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Beaufort Securities Breakfast Alert: Armadale Capital and Katoro

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Markets
Europe
The FTSE-100 finished yesterday's session 0.02% lower at 7,417.24, whilst the FTSE AIM All-Share index was up 0.02% at 1,029.47. In continental Europe, the CAC-40 finished 0.50% higher at 5,379.54 whilst the DAX was down 0.05% at 13,008.55.
Wall Street
In New York last night, markets were closed yesterday for Thanksgiving.
Asia
In Asian markets this morning, the Nikkei 225 was recently up 0.14% at 22,553.75 and the Hang Seng was 0.27% higher at 29,787.69.
Oil
In early trade today, WTI crude was 0.69% higher at $58.42 per barrel, while Brent was down 0.24% at $63.4.
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Headlines
Budget 2017: Tax move will penalise savers, says insurer
Millions of small savers may be hit by a little noticed tax change in the Budget that affects long term policies sold by insurance companies and sometimes collected door to door. When the chancellor announced he was abolishing the Corporate Indexation Allowance on Wednesday, the Treasury said it wouldn't affect individuals. But Royal London Insurance said savers are likely to lose out. It said the total cost could amount to hundreds of millions of pounds. "From the early numbers that we've looked at we think that millions of people have these policies and they'll be losing relatively modest amounts of money, perhaps £25 or £50, some of them a lot more," said Steve Webb, director of policy at Royal London. "But this all adds up to huge amounts, hundreds of millions of pounds for the Chancellor," he said. Royal London says the tax change announced in the Budget will affect a group of investment policies or endowments, sometimes lasting decades and designed to provide a lump sum or something to pass on to family. They are often bought from door-to-door sales reps, collecting a few pounds a week, or from adverts in magazines and papers or direct from the companies.
Source: BBC News
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Company news
Armadale Capital (LON:ACP, 2.00p) – Speculative Buy
Yesterday Armadale announced that it has appointed BatteryLimits, a leading graphite consultancy and engineering company, to manage the engineering and processing aspects of its wholly owned Mahenge Liandu graphite project in Tanzania. Completion of a Scoping Study is expected in early 2018, followed by a Feasibility Study by the end the first half of 2018. BatteryLimints will manage the feasibility process in which a staged approach is planned with Stage 1 targeting 400,000tpa throughput with a head grade of 10-15% TGC from near surface high-grade mineralisation. Stage 2 will focus on increasing production in line with growth on the expanding graphite market. Work continues upgrading the current high-grade JORC-compliant resource of 40.9Mt grading 9.41% TGC with results expected in Q4 2017. Mahenge Liandu is one of the highest-grade graphite projects in Tanzania and thus has the potential to produce high-quality graphite concentrates, which should be suitable for a number of commercial applications.

Our view: We continue to be impressed with the exceptional high-grade, shallow intercepts coming from Mehange Liandu, representing some of the highest grades reported from graphite deposits in Tanzania. The appointment of experienced graphite consultants to manage project is good news for the Company as it continues to develop the Mehange Liandu deposit. Armadale is looking to capitalise on the expected growth in the graphite market driven by increasing applications particularly in the energy storage market. We look forward the updated resource estimate by year end as well as results from the scoping study in early 2018 followed by feasibility study during H2 2018. In the meantime, we maintain a Speculative Buy rating on the stock.

Beaufort Securities acts as a corporate broker to Armadale Capital PLC

Katoro Gold (LON:KAT, 2.75p) – Speculative Buy
Katoro Gold, the Tanzania focused gold exploration and development company, announced that it has commissioned a LiDAR (Light Detection and Ranging) survey at its Imweru gold project. The LiDAR survey will provide a highly accurate digital elevation map which will aid in the resource estimation and optimising the planned pit design for the project. Cost of the survey is approximately US$14,000 and will be satisfied through the issue of new ordinary shares in Katoro once completed. Imweru has a current JORC-compliant mineral resource estimate of 515,110oz of gold comprising 82% in the Inferred and 18% in the Indicated categories.

Our view: Completion of a LiDAR survey will provide accurate data necessary to generate a detailed digital elevation map which is crucial for the development of the pit design as well as forming a solid base for the mineral resource estimate. We continued to be encouraged with the pace of development at Imweru and look forward to further announcements regarding completion of the ESIA and the PFS. In the meantime, we maintain a Speculative Buy recommendation on the stock.

Beaufort Securities acts as a corporate broker to Katoro Gold plc

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