Graphite

  • Are investors missing a major opportunity at Armadale Capital as graphite prices soar? (ACP)

    Last month saw Black Rock Resources (ASX:BKT) reveal binding sales agreements for graphite produced at its Mahenge project in Tanzania. The Australian miner has agreed to supply ‘premium’ graphite with a nominal grade of between 97.5-98.5pc for $1,490/t and ‘ultra’ graphite grading more than 99pc for $2,161/t. Both of these prices come in at a significant premium to the $1,272/t used by London-listed Armadale Capital (LSE:ACP) in the scoping study for its Mahenge Liandu graphite project, which neighbours Black Rock’s Mahenge asset. With Mahenge Liandu sharing many similarities with Mahenge, could Black Rock’s update present a real buying opportunity at Armadale?

    Graphite opportunity

    Mahenge Liandu is a high-grade, coarse flake 29.9km2 project based in a Neoproterozoic system of high-grade metamorphic rocks with access to reliable infrastructure and Tanzania’s most populous city, Dar es Salaam. The project, which Armadale is currently focused on advancing to production, boasts a JORC-compliant, inferred mineral resource estimate of 51.1Mt at 9.3pc total graphite.

    Last March, these figures were used alongside a conservative graphite price of $1,272/t to complete a scoping study that gave Mahenge Liandu a pre-tax NPV of $349m (£261.7m) and an internal rate of return of 122pc. Meanwhile, the project has a payback period of just 1.2 years, based on low capex requirements of only $35m after tax and a mine life of 32 years at 400,000tpa. Armadale believes this life of mine could be increased significantly, with current figures representing just a quarter of Mahenge’s total resource.

    Given that Mahenge Liandu is Armadale’s critical project, it is likely that the asset underpins much of the company’s value. If we assume that Mahenge Liandu reaches production under Armadale, then the scoping study figures already suggest that the business could be considerably undervalued – even once project financing is taken into account. Indeed, the firm’s market cap currently sits at £4.8m and a placing bolstered its cash balance in February.

    However, if Armadale can secure binding sales agreements at a much higher price than $1,272, then Mahenge Liandu’s fundamentals would be enhanced even further. For example, if it can agree on a graphite sale price of $2,161/t, then the project’s NPV would nearly double. If this occurred, then the argument for Armadale being undervalued would strengthen, and the likelihood of a re-rate could increase.

    A look at the performance of Black Rock’s market performance since the beginning of the year highlights this potential even further. Indeed, it has risen from AUD$0.039 to AUD$0.099, giving it a market cap of AUD$55.33m (£30.39m) compared to Armadale’s £4.8m.

    Drawing parallels

    Encouragingly, there are already several indicators that suggest Armadale can replicate Black Rock’s prices. Firstly, and most obviously, there is the fact that Mahenge Liandu neighbours Mahenge, meaning the projects share the same deposit type and rock unit.

    Secondly, work carried out by Armadale at Mahenge Liandu to date has suggested numerous additional similarities between the projects in terms of quality. Indeed, test work at the project has delivered excellent levels of purity of up to 99.99pc total graphite content using conventional treatment. Likewise, graphite from the project has shown demonstrable expandability up to 330cm3/g, confirming its suitability for a range of high-value end uses.

    Both of these results are typical for the high-quality product that other operators have enjoyed in the graphite province surrounding the Mahenge Liandu project. Indeed, as the graph created by Armadale below shows, graphite from neighbouring projects in the region is among the purest in the industry. 

    Surging demand

    What’s more, thanks to favourable conditions in the graphite sector, there is also the possibility that the price companies are willing to pay for graphite in the future could increase beyond those secured by Black Rock. As we have previously written, several growing markets have arisen for the material thanks to its robust characteristics.

    Graphite’s most traditional application is in the industrial sector, where it is put to use in areas like steelmaking and brake lining. It is also being used increasingly in the creation of so-called ‘graphite foil’, an essential component in the production of electronic products like smartphones and tablets.

    Critically, recent years have also seen graphite become widely used in the production of lithium-ion (Li-ion) batteries - applied in emerging renewable energy technologies and, most importantly, electric vehicles (EVs) Indeed, according to the International Energy Agency (IEA), the number of EVs on roads globally will hit 125m by 2030 – this compares to just 3.1m in 2017.

    Likewise, numerous ‘gigafactories’ have arisen around the world to rush out unprecedented amounts of Li-ion batteries ahead of the EV boom. Notably, Tesla has built a new $5bn battery factory that could drive a 37pc increase in demand for natural graphite by 2020. The forecast output for the factory is 35GWph/y in Li-ion batteries, requiring the consumption of 28,000tpa of spherical graphite - double the size of the graphite market in 2017 alone.

    Meanwhile, on the supply side, nearly all of the world’s natural spherical graphite is currently sourced and processed in China. However, supply limitations, increasingly strict environmental regulations and an absence of the ‘high-quality’ graphene required by the market are putting the country under pressure. Many expect both China and its EV customers will look increasingly to operators in other geographies like Armadale and Black Rock as potential sources of supply that can subsequently be processed.

    Potential catalyst

    So, with all this potential upside in mind, what could be the trigger for a re-rate in Armadale’s share price? At the end of May, the business announced that it is fast-tracking plans to commercialise Mahenge Liandu. As part of this, the firm’s management team will hold meetings with current and prospective Chinese parties in early June to finalise binding off-take and project funding agreements.

    According to Armadale, securing these agreements will validate Mahenge Liandu and mark the start of the company’s transition from graphite explorer to emerging mining. If these meetings can indicate that Mahenge Liandu is indeed much more prospective than last year’s scoping study suggested, could an accompanying update be the catalyst that catches the attention of UK investors?

    Author: Daniel Flynn

    The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    The Author has been paid to produce this piece by the company or companies mentioned above.

    Catalyst Information Services Ltd, the owner of MiningMaven.com, owns a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    Catalyst Information Services Ltd, the owner of MiningMaven.com, has been paid for the production of this piece by the company or companies mentioned above.

    MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

  • Armadale Capital confirms ‘exceptional’ graphite purity at major Tanzanian project (ACP)

    Armadale Capital (LSE:ACP) enjoyed a 3.2pc lift to 1.29p on Thursday morning after confirming that premium quality, high-value graphite concentrates can be produced from its flagship Mahenge Liandu deposit.  The latest round of metallurgical test-work at the Tanzania-based project delivered graphite concentrates of up to 97.1pc purity for large and medium-size flake fractions – something Armadale described as ‘exceptional’.

    All-in-all, the average grade of the composite sample was 8.65pc total graphite content. This produced an average purity of 96pc across all flake sizes with an average of 97pc in the high-value jumbo, large and medium flake size ranges. These results comfortably exceed the 95pc average purity used in the company’s scoping study for Mahenge Liandu and fall in line with the high-quality graphite sourced from similar projects in the surrounding Mahenge region.

    Armadale is now carrying out test-work on a high-grade composite that aims to maximise the proportion of larger flake sizes from Mahenge Liandu. Further optimisation work is also ongoing at a leading metallurgical laboratory in Perth, Australia.

    Armadale’s latest test-work forms part of ongoing Definitive Feasibility Study at Mahenge Liandu based on the results of a scoping study completed in March last year.  The study was based on a throughput of 400,000tpa of graphite over a 32-year mine life and showed that the project is economical and warrants further development based on a conservative $1,272/t graphite price. The project boasts a JORC-compliant indicated and inferred mineral resource estimate of 51.1Mt at 9.3pc total graphite content, making it one of the most substantial high-grade resources in Tanzania.

    Speaking to MiningMaven, Armadale’s technical director Matt Bull said that prices for premium purity graphite concentrate with a purity of more than 95pc are much higher than the standard grade of 95pc or less.

    The standard grade is 95pc total graphite content, so if you can produce at a purity above that then the prices you can command increase with each percent point. The fact that we have we got up to 97.1pc, and can produce above 95pc consistently is very exciting and reflects the prospectivity of our surrounding area,’  he said. ‘This means we can deliver a top-drawer product to fast-growing end markets such as the lithium-ion batteries that power electric vehicles. This clearly enhances Mahenge Liandu’s overall economics at a time when we are steadily progressing from explorer to emerging producer.'

    Bull adds that the results should also help Armadale in gaining greater traction with prospective Chinese off-take and project finance partners.

    ‘The offtake and project financing talks are progressing well, and our ability to demonstrate that we can consistently produce high-quality graphite concentrates from our project area will be really important in making progress and securing partner,’  he said.

    We recently looked at whether investors are missing a major opportunity at Armadale given the conservative figures used in Mahenge Liandu’s scoping study. Australian miner Black Rock recently agreed to supply ‘premium’ graphite with a nominal grade of between 97.5-98.5pc for $1,490/t and ‘ultra’ graphite grading more than 99pc for $2,161/t.  Both of these prices come in at a significant premium to the $1,272/t used by Armadale in the scoping study for Mahenge Liandu, which neighbours and shares many similarities with Black Rock’s Mahenge asset.

    If Armadale can secure binding sales agreements at a much higher price than $1,272, then Mahenge Liandu’s fundamentals would be enhanced even further. For example, if it could agree on a graphite sale price of $2,161/t, then the project’s NPV would nearly double.  If this occurred, then the argument for Armadale being undervalued would strengthen, and the likelihood of a re-rate could increase.

    To read more, please click here

    Author: Daniel Flynn

    The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    The Author has been paid to produce this piece by the company or companies mentioned above.

    Catalyst Information Services Ltd, the owner of MiningMaven.com, owns a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    Catalyst Information Services Ltd, the owner of MiningMaven.com, has been paid for the production of this piece by the company or companies mentioned above.

    MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

  • Armadale Capital highlights strong graphite market conditions as Mahenge Liandue progress continues (ACP)

    Graphite-focused firm Armadale Capital (LSE:ACP) sat at 1.36p a share on Wednesday after announcing steady progress at its flagship Mahenge Liandu project and favourable commodity market conditions. The business – which currently has a £5.1m market cap – has appointed leading international laboratory Bureau Veritas to conduct metallurgical test work at the Tanzania-based project.

    Armadale said the work will support previous tests at Mahenge Liandu that have shown ‘excellent flake size distribution and exceptional purity’. Specifically, these efforts confirmed that concentrates from the project can be upgraded readily to over the 99.95pc required to suit the rapidly expanding lithium-ion and expandable graphite markets.

    The company has now delivered a shipment of 1.6ts of diamond core to Perth, Australia, where it will undergo metallurgical testing to produce a concentrate that will enable completion of final plant design. The concentrate samples will also be used to assist commercial discussions and downstream product test work.

    Armadale added that its metallurgical work is on schedule for completion in June, while downstream test work results confirming product quality are scheduled for July.

    Mahenge Liandu is a high-grade coarse flake asset that Armadale expects to become a strategically-valuable world-class supplier to the lithium-ion battery sector once it enters production.  According to the firm, the project is one of the highest-grade, large flake deposits in the world, with a JORC-compliant, inferred mineral resource estimate of 51.1Mt at 9.3pc total graphite.  A scoping study completed in March last year gave the site a pre-tax NPV of $349m (£261.7m) and an internal rate of return (IRR) of 122pc based on a conservative $1,272/t basket graphite price.

    The metallurgical work detailed on Wednesday marks a crucial step towards the completion of Armadale’s ongoing definitive feasibility study (DFS) at Mahenge Liandu, on track for the final quarter of this year. These DFS results will contribute to the company’s ultimate decision on whether to mine the project.

    Elsewhere in Wednesday’s update, Armadale said it believes that an increasing amount of value is being placed on higher purity, higher quality graphite concentrates. To demonstrate its point the business pointed to Black Rock, which owns a graphite project neighbouring Mahenge Liandu. The company recently announced binding sales agreements at materially higher than benchmark prices for higher purity concentrates, and significantly higher than the $1272/t used in Armadale's scoping study.

    On this, Armadale’s director Nick Johansen added: ‘Should Mahenge Liandu secure higher average price binding sales agreements, based on enhanced product quality, this will positively impact the product fundamentals including NPV and IRR calculations. These were already robust: NPV of US$349m and IRR of 122%.’

    With this in mind, Johansen said Mahenge Liandu is gathering ‘considerable interest’ from third parties, with discussions to date demonstrating a ‘clear interest’ in providing project-level financing. ‘We anticipate [that these] will fall into place in a timely manner, given the completion of our DFS schedule for this year,’he added.

    To read MiningMaven’s recent in-depth interview with Armadale’s management team covering the company’s portfolio and macro outlook for its associated commodity markets, please click here.

    Author: Daniel Flynn

    The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    The Author has not been paid to produce this piece by the company or companies mentioned above.

    Catalyst Information Systems Ltd, the owner of MiningMaven.com, does not own a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    Catalyst Information Systems Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.

    MiningMaven.com and Catalyst Information Systems Ltd are not responsible for its content or accuracy. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance.

  • Armadale Capital primed for emerging producer status after confirming Mahenge Liandu’s world-class potential (ACP)

    Armadale Capital(LSE:ACP) is primed and ready to launch into its transformation from explorer to emerging producer after confirming that its Mahenge Liandu asset is among the highest-grade graphite projects globally.

    In an update on Wednesday, the £9.4 million firm said met test work has confirmed that the Tanzanian property can produce “high quality, high purity graphite”. Specifically, conventional technology at Mahenge Liandu is now proven to be capable of achieving grinding consistent purity of above 97% TGC (graphitic carbon content) – among the highest grades in its sector.

    In layman’s terms, as the “purity” of graphite rises, so does its range of potential applications and, in turn, the value at which it can be sold. One established use for high purity graphite is in the “foils” that feature in all of our electrical devices – from our smartphones to our computers.

    However, perhaps the most exciting application of the material moving forward is in the lithium-ion batteries that power electric vehicles (“EV”). Despite their name, these power sources include around ten times more graphite than they do lithium.

    With Deloitte expecting the amount of EVs sold to rise from 4 million in 2020 to 12 million in 2025, and 21 million by 2030, the sector will drive graphite demand growth for many years to come. It is therefore highly encouraging that Armadale has confirmed that a large proportion of graphite concentrates tested at Mahenge Liandu were in the medium size fraction, making them “ideally suited to the battery market”.

    Key milestone

    Chairman Nick Johansen added that the results of the met test work programme market represent a “key milestone” for Armadale, confirming its long-held confidence in the asset’s commercial and economic potential.

    Indeed, the project already boasts an established JORC-compliant indicated and inferred mineral resource estimate of 59.48Mt at 9.8%, making it one of the largest high-grade resources in Tanzania. Likewise, a scoping study in 2018 based on a throughput of 400,000 tonnes per annum over a 32-year mine life outlined exceptional project economics. These included a $349 million net present value and a 122% internal rate of return as well as a significant capacity for extension: the current mine plan is based on just a quarter of the project’s total resource.

    Meanwhile, the region in which Mahenge Liandu is based is on of the most prolific for graphite globally as it hosts vast reserves of small and medium flake sizes alongside the coarser “large flakes” with fewer applications. As such, the area – and African countries in general – are becoming a more popular purchase destination for parties with graphite needs over China, where rising environmental standards are forcing many plants to shut.

    The location of the Mahenge Liandu project (Source: Armadale Capital)

    Moving forward

    The results of the met test work on Wednesday – which prompted a 23% increase in Armadale’s share price – will now feed into a definitive feasibility study (“DFS”) for Mahenge Liandu. The company said this work will build on the existing scoping study and is “at the heart” of its transformation into a producer.  Finally, Johansen added that the DFS remains on track for delivery by the end of March despite the global outbreak of Covid-19:

    Naturally, ensuring the safety of our team is our primary responsibility, but as most of our work currently comprises desktop studies and the processing of results from previous fieldwork we have been able to progress these activities remotely. We look forward to updating shareholders on the DFS results imminently.”

    Once the DFS completes, Armadale’s technical director Matt Bull tells us that Mahenge Liandu will move into the Front End Engineering Design, or “FEED”, stage. This will see the firm complete various studies to figure out any technical issues and estimate a rough investment cost ahead of the engineering, procurement, construction, and ultimately production phases.

    Alongside this, Bull said that financing and offtake discussions with potential partners are ongoing. Despite possible turbulence in the face of the continuing global coronavirus pandemic, he remains absolutely confident that Mahenge Liandu’s sheer graphite quality will see these engagements conclude:

    “These latest results prove what we already knew about Mahenge Liandu definitively – the area we will begin mining in can produce a very fine and pure product that can be used in the battery market. Although the current market crisis may present short-term difficulties as we pursue strategic partners, the quality of our asset, paired with soaring graphite demand and a move away from Chinese production, means partner interest will continue.”

    Author: Daniel Flynn

    The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    MiningMaven Ltd, the owner of MiningMaven.com, does not a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    MiningMaven Ltd, the owner of MiningMaven.com, has been paid for the production of this piece by the company or companies mentioned above.

    MiningMaven.com and MiningMaven Ltd are not responsible for the article’s content or accuracy and do not share the views of the author. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

  • Armadale Capital rises as Mahenge Liandu DFS progresses (ACP)

    Armadale Capital (LSE:ACP) rose 2.13pc to 1.2p on Friday morning after announcing progress towards the completion of a definitive feasibility study (DFS) for its flagship Mahenge Liandu graphite project in Tanzania.

    The firm said a final environmental and social impact assessment report for the project found that the potential impact of graphite mining and processing can be reduced, limited, and eliminated using ‘appropriate mitigation measures’. The report was informed by consultations with various local authorities and includes baseline environmental data that looked at ways to reduce the impact of mining at the site.

    Armadale said it has also completed a decommission implementation plan that considers ways to use the Mahenge Liandu side after mining completes. As part of this, the firm has examined ways to reduce the long-term impact of mining.

    Elsewhere, the firm said it has also received a relocation action plan (RAP) covering the proposed 9km2 mining licence at Mahenge Liandu. According to Armadale, the area affected by the project has limited areas of development and a low population density. As a result, the company anticipates a low compensation cost relative to the overall capital requirement of the project.

    Finally, Armadale added that it is finalising its comments to both the ESIA report and the RAP and expects to submit both to the National Environment Management Council of Tanzania by the end of April.

    The company’s director Nick Johansen said: ‘We are very pleased with the speed at which the DFS is advancing as we look to advance the world-class Mahenge Liandu Graphite Project in south-east Tanzania and establish a significant high-grade graphite mine. Both the ESIA Report and RAP are integral to this process, enabling us to apply for a mining licence, so we are delighted with the findings that appear favourable. We are now completing our in-house work on these documents and look forward to submitting both to the NEMC shortly. Other multiple workstreams are ongoing regarding the DFS and commercial discussions related to the Project; we anticipate updating the market with further progress in the near term.’

    Mahenge Liandu is a high-grade coarse flake asset that Armadale expects to become a strategically-valuable ‘world-class’ supplier to the lithium-ion battery sector once it enters production. The 29.9km2 site is based in the Neoproterozoic system of high-grade metamorphic rocks with easy access to strong infrastructure and Tanzania’s most populous city, Dar es Salaam.

    According to Armadale, Mahenge Liandu is one of the highest-grade, large flake deposits in the world, with a JORC-compliant, inferred mineral resource estimate of 51.1Mt at 9.3pc total graphite. A scoping study completed in March last year gave the site a pre-tax NPV of $349m (£261.7m) and an internal rate of return (IRR) of 122pc; in comparison, Armadale’s market cap currently sits at just £4.61m. What’s more, these calculations are based on a conservative basket graphite price of $1,272/t.

    The project has a payback period of just 1.2 years, based on low capex requirements of only $35m after tax and a mine life of 32 years at 400,000tpa (c.49,000tps of graphite concentrate). Armadale believes this life of mine could be increased significantly, with current figures representing just a quarter of Mahenge’s total resource.

    To read our recent interview with the business, please click here.

    Author: Daniel Flynn

    The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    The Author has been paid to produce this piece by the company or companies mentioned above.

    Catalyst Information Systems Ltd, the owner of MiningMaven.com, does not own a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    Catalyst Information Systems Ltd, the owner of MiningMaven.com, has been paid for the production of this piece by the company or companies mentioned above.

    MiningMaven.com and Catalyst Information Systems Ltd are not responsible for its content or accuracy. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance.

  • Armadale Capital to fast-track commercialisation of flagship Tanzania graphite project (ACP)

    Shares in Armadale Capital (LSE:ACP) advanced 1.5pc on Wednesday morning after the business announced that it is fast-tracking plans to commercialise its flagship Mahenge Liandu graphite project. With a definitive feasibility study (DFS) for the Tanzania-based project due to complete in Q4 2019, the £4.4m firm said it is now focused on accelerating the various additional workstreams needed to reach production.

    Mahenge is a high-grade coarse flake asset that Armadale expects to become a strategically-valuable ‘world-class’ supplier to the lithium-ion battery sector once it enters production.  According to the organisation, Mahenge is one of the highest-grade, large flake deposits in the world, with a JORC-compliant, inferred mineral resource estimate of 51.1Mt at 9.3pc total graphite.

    As part of its acceleration efforts, Armadale’s management team will hold meetings with current and prospective Chinese parties in early June to finalise binding off-take and project funding agreements. According to Armadale, securing these agreements will validate Mahenge Liandu and mark the start of the company’s transition from graphite explorer to emerging mining.

    As part of this work, test-work on fresh samples at Bureau Veritas’s facility in Perth is focusing on maximising the quality of Mahenge Liandu’s graphite product. Specifically, the work is aimed at enhancing purity levels for a certain volume of output, something that Armadale’s director Nick Johansen believes will highlight the project’s ‘true value’ to potential Chinese partners.

    ‘Our most important task is to ensure that a high-purity graphite product, which attracts a material price premium, can be consistently produced,’ he added in Wednesday’s release.

    Previous results from the region where Mahenge Liandu is based have confirmed the potential to produce high-value produce from graphite deposite. As such, results from Bureau Veritas’s test-work programme are being used in Mahenge Liandu’s plant design, which is being progressed by a leading Chinese group. This group has used the data to provide an update on engineering, procurement, and constructing pricing that will be factored into the Mahenge Liandu DFS.

    Armadale will also be fast-tracking its work on a graphite resource update as part of its acceleration efforts. This new figure – expected by the end of June - will incorporate the latest topographics survey data and the most recent round of reverse circulation and diamond drilling. The results of the update will then be used in the mine planning phase of Mahenge Liandu’s DFS.

    Elsewhere, Armadale has collected water samples from bore-holes around Mahenge Liandu’s proposed mining site for testing to ensure suitability during mine construction and within the process plant. Armadale said the ability to use this groundwater rather than securing liquid from a third-party source will be an ‘important cost-saving development’ when mining operations begin.

    Finally, Armadale said it has increased its engagement work with local community groups as part of its efforts to fast-track Mahenge Liandu’s commercialisation. This has so far involved donating food and necessary supplies to schools and well-being services.

    ‘Looking beyond the completion of the DFS, which is targeted for year-end, the Board is now focused on fast-tracking the various work streams critical to bringing the Mahenge Liandu Graphite Project into commercial production,’ added Johansen. ‘Our most important task is to ensure that a high-purity graphite product, which attracts a material price premium, can be consistently produced. In tandem, the team are finessing details for the processing plant, which has an initial capacity of 400ktpa, and at the same time are ensuring ground-water suitability at site.

    ‘Most importantly, we are ensuring our traction with the local community at Mahenge Liandu remains strong, as their ongoing support is critical to commissioning the Project. We look forward to providing shareholders with further regular updates as the Board moves to fast-track efforts towards transitioning from explorer towards emerging miner.’

    The 29.9km2 Mahenge Liandu project is based in the Neoproterozoic system of high-grade metamorphic rocks with easy access to strong infrastructure and Tanzania’s most populous city, Dar es Salaam. A scoping study completed in March last year gave the project a pre-tax NPV of $349m (£261.7m) and an internal rate of return (IRR) of 122pc; in comparison, Armadale’s market cap currently sits at just £4.4m. What’s more, these calculations are based on a conservative basket graphite price of $1,272/t.

    The project has a payback period of just 1.2 years, based on low capex requirements of only $35m after tax and a mine life of 32 years at 400,000tpa (c.49,000tps of graphite concentrate). Armadale believes this life of mine could be increased significantly, with current figures representing just a quarter of Mahenge’s total resource.

    To read MiningMaven’s in-depth interview with Armadale’s management team on the company’s prospects and predictions for the graphite market, please click here.

    Author: Daniel Flynn

    The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    The Author has been paid to produce this piece by the company or companies mentioned above.

    Catalyst Information Services Ltd, the owner of MiningMaven.com, owns a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    Catalyst Information Services Ltd, the owner of MiningMaven.com, has been paid for the production of this piece by the company or companies mentioned above.

    MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance.

     

     

  • Armadale Capital: Advancing one of the world’s highest-grading, large-flake graphite resources (ACP)

    Armadale Capital’s (LSE:ACP) primary interest is its 100pc-owned Mahenge Liandu project in Tanzania– one of the world’s highest-grading, large-flake graphite resources.

    Throughout summer 2019, the company’s share price has soared as work completed as part of an ongoing feasibility study (FS) has continued to demonstrate the asset’s market-leading grades and flake size.

    All the while, Armadale’s efforts to secure offtake financing arrangements for its project have continued against a backdrop of improving demand for graphite - a key element in the production of electric vehicle batteries.

    With several of Armadale’s peers securing highly attractive terms for the offtake of graphite produced at their projects, the economic fundamentals used to date at Mahenge Liandu are looking increasingly conservative.

    In the report below, we have analysed the opportunity for shareholder value creation at the organisation in detail.

    Please click here to download and read the report in full.

     

  • Armadale makes further headway in its efforts to commercialise major graphite project (ACP)

    Shares in Armadale Capital (LSE:ACP) sat at 1.1p on Tuesday morning after the graphite-focused firm revealed several areas of substantial progress at its flagship Mahenge Liandu project in Tanzania.

    Armadale said initial metallurgical test-work results for the project, which it is currently advancing towards commercialisation, demonstrated graphite recovery of up to 95pc total graphite content (TGC). Although this is consistent with expectations, the organisation is now completing incremental test-work to enhance the quality of its final graphite concentrate product.

    It added that this new stage of metallurgical work is ‘progressing well’, with targeted premium purity levels currently sitting in the 95-97pc range. Such an enhancement would place Mahenge Liandu towards the high-end of graphite project globally, potentially facilitating premium pricing being factored into future offtake agreements.

    Elsewhere, Armadale said that a review of local rainfall data has indicated that the project will have enough surface water for both mining and processing. The use of surface and recycled water will minimise run-off from the site and into surrounding communities.

    Meanwhile, the business said further test-work has confirmed that water bores can be used in Mahenge Liandu’s process plant, mine construction, and operation phases and that groundwater can be used in drought conditions. These reduce the need for a bore field to be constructed to supply water, cutting overall project costs.

    Finally, Armadale said it recently held a meeting with a director of the council committee of the nearby Liandu village. This saw both parties agree that their existing relationship has delivered ‘considerable value’ to the community over the past two years and should continue.

    Mahenge Liandu boasts a high-grade JORC-compliant indicated and inferred mineral resource estimate of 51.1Mt at 9.3% TGC. This includes 38.7Mt at 9.3pc TGC and 12.4Mt at 9.1pc TGC, making the project one of the most considerable high-grade resources in Tanzania.

    Armadale is currently in the processing of completing a definitive feasibility study (DFS) for the project based on the results of a scoping study that was completed in March last year. This DFS is scheduled to end in Q4 this year.

    The firm’s scoping study suggested that Mahenge Liandua could produce an average of 49,000tpa worth of high-quality graphite products for a 32-year mine life – with plenty of upside potential. Other highlights included an operating cost of $408/t, based on an average 12.5pc TGC life of mine grade, a pre-tax IRR of 122pc and an NPV of $349m with a low development capex of $35m.

    Towards the end of last month, Armadale notably revealed what it described as ‘exceptionally high-grade assay results’ for the first four holes in an 18-hole reverse circulation drill programme at Mahenge Liandu. High-grade near-surface assayed intercepts recorded included 7m at 6.9pc TGC from 31m, 7m at 16.8pc TGC from surface, and 9m @ 14.8pc TGC from surface.

    In Tuesday’s update, Armadale’s director Nick Johansen hailed the company’s latest progress as it moves towards ‘aggressively ramping up’ its efforts to transform from explorer to emerging graphite producer.

    ‘With many moving parts critical to developing a seamless value chain for the Mahenge Liandu Project, it is pleasing to receive metallurgical test-work that is progressing to plan and with results in line with expectations. This will augur favourably as we move more proactively to secure binding off-take commitments and project level financing from our Chinese partners,’  he added. ‘It is also a positive outcome that surface water will be the primary water source as, along with the potential to price our final graphite product at a premium, this will also deliver a positive uplift on the Project’s overall economics.’

    To read our recent look into whether investors are missing a major opportunity at Armadale Capital as graphite prices soar, please click here.

    Author: Daniel Flynn

    The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    The Author has been paid to produce this piece by the company or companies mentioned above.

    Catalyst Information Services Ltd, the owner of MiningMaven.com, owns a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    Catalyst Information Services Ltd, the owner of MiningMaven.com, has been paid for the production of this piece by the company or companies mentioned above.

    MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

  • Armadale on track to deliver Mahenge Liandu DFS in current quarter (ACP)

    Armadale Capital(LSE:ACP) has reiterated its intention to deliver a definitive feasibility study (“DFS”) for its Mahenge Liandu graphite project in the current quarter.

    Based in south-east Tanzania, Mahenge Liandu contains one of the country’s most substantial high-grade graphite resources, with high-grade coarse flakes and near-surface mineralisation contained within one ore body. Armadale is currently completing a DFS based on the results of a scoping study centred around a 400,000tpa throughput ratio. This put Mahenge Liandu’s net present value at $349 million and its pre-tax internal rate of at 122% against development capital expenditure of just $35 million, implying an after-tax payback period of 1.2 years.

    In Friday’s update, Armadale said the DFS ramps up to 1 million tonnes per annum throughput after four years and will initially target high-grade, near-surface graphite mineralisation for production to maximise value. Meanwhile, it said metallurgical test-work is being completed on high-grade composites with average grades of 14.9% and 15.6% total graphitic carbon to confirm the project flowsheet is suited to high-grade ore. Likewise, site locations for all elements of the project have been finalised, an access road has been marked out, and logistics have been costed out with a local well-established Tanzanian contractor.

    Beyond the DFS, Armadale said that its director Steve Mahede is confident that developing mining projects through to production is a major priority for Tanzania’s government following a recent meeting with officials. Finally, the organisation said it was beginning to advance post-DFS work programmes focused on road access, production bores, and – critically – commercialisation and project funding discussions with potential partners.

    The company’s chairman, Nick Johansen, said: “With one of the largest high-grade resources in Tanzania this dovetails perfectly with our ongoing commitment to push the envelope to transform into an emerging producer by H1 2021.

    “In support of this, refinements to our resource modelling and mine plan from the scoping study have increased our confidence that the project is going to be a low cost, long life operation.

    “We look forward to sharing these key value metrics within the next month as we finalise the DFS, results for which we know are eagerly anticipated. I would like to thank shareholders for their patience in this regard and give my assurance that finalising this study is our primary objective. We will then look to accelerate commercialisation and funding initiatives with our partners to ensure we remain on track with our fast-paced growth plans.”

    As we have previously written, the scoping study at Mahenge Liandu was based around a conservative $1,272 per tonne graphite price and an average concentrate purity of 95%.  Graphite prices are currently sitting much higher than this, and Mahenge Liandu is proven to be able to produce the material consistently at a grade considerably higher than 95%. Last year, we looked at whether investors were missing a significant opportunity at Armadale given this conservative approach.

    As we highlighted, Australian miner Black Rock recently agreed to supply “premium” graphite with a nominal grade of between 97.5-98.5% for $1,490 a tonne and “ultra” graphite grading more than 99% for $2,161/t.   Both of these prices come in at a significant premium to the $1,272/t used by Armadale in the scoping study for Mahenge Liandu, which neighbours and shares many similarities with Black Rock’s Mahenge asset.  f Armadale can secure binding sales agreements at a much higher price than $1,272, then Mahenge Liandu’s fundamentals would be enhanced even further.

    Author: Daniel Flynn

    The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    MiningMaven Ltd, the owner of MiningMaven.com, does not a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    MiningMaven Ltd, the owner of MiningMaven.com, has been paid for the production of this piece by the company or companies mentioned above.

    MiningMaven.com and MiningMaven Ltd are not responsible for the article’s content or accuracy and do not share the views of the author. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance.

     

  • MiningMaven Podcast 113 - with Matt Bull of Armadale Capital (ACP)

    Today’s guest on the MiningMaven podcast is Matt Bull, Technical Director at Armadale Capital (LSE:ACP). Armadale’s flagship asset is the Mahenge Liandu graphite project its developing in Tanzania. The company is working towards delivering a Definitive Feasibility Study later this year and has just released some excellent high-grade assay results which the firm says have validated its commercialisation plan.

    This interview was recorded on 25th June 2019.

    All opinions expressed are those of MiningMaven and the respective guests, unless otherwise stated and should not be construed as investment advice or a recommendation to buy shares in any featured Company. From time to time MiningMaven principals may take equity positions in companies featured. Listeners are advised to do their own extensive research before buying shares which, as with all small-cap exploration stocks, should be viewed as high risk. Investors should also seek the advice of a qualified investment adviser or stockbroker as they deem appropriate. MiningMaven.com is a trading division of Catalyst Information Services Limited. Registered in England no. 06537074 (Registered Office Address 3rd Floor Ivy Mill, Crown Street, Manchester, M35 9BG) #mining #investing

    Author: Stuart Langelaan

    The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    The Author has been paid to produce this piece by the company or companies mentioned above.

    Catalyst Information Systems Ltd, the owner of MiningMaven.com, owns a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    Catalyst Information Systems Ltd, the owner of MiningMaven.com, has been paid for the production of this piece by the company or companies mentioned above.

    MiningMaven.com and Catalyst Information Systems Ltd are not responsible for its content or accuracy. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance.

     

  • MiningMaven Podcast 97 - with Armadale Capital's Paul Johnson (ACP)

    In today’s podcast Armadale Capital’s (LSE:ACP) newly appointed non-executive director Paul Johnson explains what attracted him to the company, both from a career and investing perspective.

    Armadale’s primary focus is a graphite project in Tanzania and the company recently raised just under £800,000 to progress the project. Paul touches on the fundamentals of the asset and highlights the critical nature of a company’s ability to communicate to the market.

    This interview was recorded on 13th March 2019.

    All opinions expressed are those of MiningMaven and the respective guests, unless otherwise stated and should not be construed as investment advice or a recommendation to buy shares in any featured Company. From time to time MiningMaven principals may take equity positions in companies featured. Listeners are advised to do their own extensive research before buying shares which, as with all small cap exploration stocks, should be viewed as high risk. Investors should also seek the advice of a qualified investment adviser or stockbroker as they deem appropriate. MiningMaven.com is a trading division of Catalyst Information Services Limited. Registered in England no. 06537074 (Registered Office Address 3rd Floor Ivy Mill, Crown Street, Manchester, M35 9BG) #gold #mining #investing

    Author: Stuart Langelaan

    The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    The Author has not been paid to produce this piece by the company or companies mentioned above.

    Catalyst Information Systems Ltd, the owner of MiningMaven.com, does not own a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    Catalyst Information Systems Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.

    MiningMaven.com and Catalyst Information Systems Ltd are not responsible for its content or accuracy. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance.

     

  • VIDEO: Re-visit Matt Bull's update on Armadale Capital’s progress at Mahenge Liandu in exclusive presentation (ACP)

    Towards the end of October, Ben Turney from our sister site ValueTheMarkets hosted Armadale Capital’s (LSE:ACP) technical director Matt Bull in a recorded presentation and interview. Bull provided a comprehensive update on the firm’s progress at its wholly-owned Mahenge Liandu graphite project in Tanzania, where it is currently completing a feasibility study.

    Among the topics covered were the project’s market-leading graphite purity and flake size and Armadale’s ongoing progress in securing offtake agreements and financing for its development. Elsewhere, Bull provided an update on the increasing demand for graphite globally against a backdrop of shrinking supply from China as the country tightens its environmental controls.

    He also argued that the economic fundamentals currently used at Mahenge Liandu are looking increasingly conservative given the attractive offtake deals recently secured by several of Armdale’s peers at their projects. This was a point recently highlighted in MiningMaven’s detailed report on the business, which can be read here.

    During the presentation, Bull also took questions from shareholders. These focused on numerous subjects, including the firm’s intention to hire a CEO, its plans for communicating its message, and the positive impact that recent progress could have on Mahenge Liandu’s economics.

    For a full recording of the presentation, please see below:

    Armadale Capital - Online Presentation and Q&A Session - 25/10/2019 from ValueTheMarkets.com on Vimeo.

    Author: Daniel Flynn

    The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    MiningMaven Ltd, the owner of MiningMaven.com, does not own a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    MiningMaven Ltd, the owner of MiningMaven.com, has been paid for the production of this piece by the company or companies mentioned above.

    MiningMaven.com and MiningMaven Ltd are not responsible for the article’s content or accuracy and do not share the views of the author. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance