CENTRAL AFRICA | DRC ARMADALE CAPITAL ▼ AIM AI M M- - l AIM-listed edededed ededede t ililililililiststststststststst d gold lolo g goloo lo l ldd junior o r Ar r rma d da a l lele le e ele C Capapapapaa apa p pap i titititititititt alalalal a l i is s dededd delivering g o on n itititititititit its ts im m me e dididididi d i iatatatatatatee business s e nenenenenene nesss sss s sss s strategy g e tatat atategegege t y tototo to i invest t inininin in n jujujujujujujujuninininininininiorororo A Armadale Capital m ma dal lilill i veveveveveveve veve vevev e ririririrr ing iririririririr n ng immediate bu u sisi sisisisi i m b t r rtrtrtrtrtr nvnvesest anandd d develop p lo low capee projectss with t itit h near-term m potential iaiaal through h its ititss fl flflagagshh ipipii p project c Mpokoto to in i n ththth the h e neneneaa r term p o t et ntntnn thth ththrorougugu h Mpok okotot and elolol capex agship rorojejectctc Mp ok Democratic Republic of Congo (DRC). Acquired just 15 months ago, construction is due to start in H2, 2015 with first production scheduled just 12 months later, CEO Justin Lewis tells LAURA CORNISH. The plan IN SHORT Despite the weak commodity climate, Armadale Capital is proving that companies and projects within the ‘junior sphere’ can still show development and cash generating potential. Its Mpokoto project proves it. T he criteria necessary to develop new mining projects in today’s weak commodity price environment is challenging, for juniors and majors. Unlocking value, with minimum capital outlay to generate cash returns quickly, are essential investor prerequisites; and according to Lewis, Armadale Capital fulfils these comfortably. “When I joined the company and board 18 months ago, I immediately implemented a strategy which would enable us to start generating cash as quickly as possible. The subsequent result is an African portfolio which focuses on small, near-term producing assets only. In this market, there is no point in having big projects which are financially risky and unattractive and don’t generate returns as quickly as possible,” Lewis outlines. In line with its strategy and business model, Armadale Capital changed direction from its acid mine drainage technology 22 MINING REVIEW AFRICA | MARCH 2015 Significant drilling activity since the acquisition has more than doubled Mpokoto’s resource – to 678 000 oz (75% in indicated category) and an advanced scoping study has provided insight into the project’s value which includes a post-tax net present value (NPV) of US$55.3 million, based upon a discount rate of 8% and a focus and instead picked up 80% of the “unloved” Mpokoto gold asset from Gold Fields in November 2013, inheriting a 380 000 oz What they said resource (inferred and indicated) as well as a mining When we acquired Mpokoto 14 months convention and licence. It is ago we set out an ambitious development situated in the DRC’s Katanga schedule targeting commercial production province. in the near term to translate the mineralised potential of Mpokoto into tangible shareholder value. Justin Lewis gold price of US$1 250/oz. The group also believes it can achieve all-in sustaining costs of less than $700/oz. “Our intention is to build a mine capable of producing about 25 600 ozpa of gold with a plant capacity of 720 000 tpa at 1.45 g/t (for nine years) – to start with. It should cost about $20 million to build, excluding the mining fleet,” Lewis outlines.