RNS Number : 0764B

Armadale Capital PLC

29 September 2022

Armadale Capital Plc / Index: AIM / Epic: ACP / Sector: Investment Company

29 September 2022

Armadale Capital Plc

('Armadale' the 'Company' or the 'Group')

Interim Results

Armadale, the AIM quoted investment company focused on natural resource projects in Africa, is pleased to announce its unaudited interim results for the six months ended 30 June 2022.


During the half year Armadale's primary focus was on securing project development funding for the Mahenge Liandu Graphite project while advancing the permitting and local community engagement. The Company also expanded its presence following the grant of an exploration license covering 19.99 square kilometers.

In March, the Company, pursuant to environmental compliance requirements of the mining license, successfully completed the in stallation of a weather station and has commenced the monthly collection of data. The station records data at 5 second intervals and covers all weather parameters including temperature, pressure, wind, moon phase, humidity, solar radiation and rainfall.. All data is automatically uploaded to the cloud. This will assist with the planning of the mining operations on the Project.

In addition, the Company has also installed a total of 7 stream gauges and one barotroll in the water streams located at the mine site in March 2022 which will be used for hydrological studies. The devices record 3 parameters which are temperature, pressure and depth at 5 second intervals.. The data from all devices are being manually downloaded at a frequency rate of once per month.

As Part of the ongoing FEED study, the Company cleared pads for geotech drilling at the proposed plant Site and tailing dam location.

The pad clearance activity was completed at site in the proposed Plant site and Tailing Storage Facility areas. 10 pads were cleared at the tailing storage facility area and 6 pads were cleared at the plant site area as a part of geotechnical studies and the Company is now preparing for Diamond Drilling in the proposed areas.

Furthermore, the test pitting program has been completed at the proposed plant site, tailing storage facility and the access road areas. A total of 41 test pits with 3 meters depth have been excavated, DCP tested, strata logged, sampled and backfilled. 11 pits have been excavated at plant site, 25 pits excavated at tailing storage facility and 5 pits excavated at the access road to the mine site.

The Company has received an encouraging level of interest in funding the Mahenge Liandu Graphite project and has advanced its discussions with a number of potential finance partners with respect to securing project development funding for the project.

Grant of Prospecting License PL 119961/ 2022

The company was granted the prospecting license PL 119961/ 2022 by the ministry of minerals on 28(th) June 2022, for the exploration of graphite minerals. The license area comprises of 19.99 square kilometers, located at Isongo and Liandu villages of Ulanga District, in Morogoro Region.

The cash position at 30 June 2022 was GBP1,723,000 and the average monthly cash burn is about GBP30,000, including annual audit costs.



Condensed Consolidated Statement of Comprehensive Income

For the six months ended 30 June 2022

                                                                          Six months ended 
                                                              30 June              30 June 
                                                                 2022                 2021 
                                                              GBP'000              GBP'000 
     Administrative expenses                                    (151)                (157) 
     Change in fair value of investments                          (1)                  139 
     Finance costs                                                  -                  (9) 
     Loss before taxation                                       (152)                 (27) 
     Taxation                                                                            - 
                                                 --------------------  ------------------- 
     Loss after taxation                                        (152)                 (27) 
     Other comprehensive (loss)/income 
     Items that may be reclassified to 
      profit or loss: 
     Exchange differences on translating 
      foreign entities                                           (57)                    2 
                                                 --------------------  ------------------- 
     Total comprehensive loss attributable 
      to equity holders of the parent company                   (209)                 (25) 
                                                 ====================  =================== 
                                                                Pence                Pence 
     Loss per share attributable to equity 
      holders of the parent company (note 
      Basic and fully diluted                                  (0.03)               (0.01) 
                                                 ====================  =================== 

Consolidated Statement of Financial Position

At 30 June 2022

                                                        Unaudited                Audited 
                                                30 June        30 June       31 December 
                                                   2022           2021              2021 
                                                GBP'000        GBP'000           GBP'000 
     Non-Current assets 
     Exploration and evaluation assets            5,010          4,556             4,727 
     Investments                                     79            421               138 
                                                  5,089          4,977             4,865 
     Current assets 
     Trade and other receivables                     60            559               150 
     Cash and cash equivalents                    1,723            562               886 
                                          -------------  -------------  ---------------- 
                                                  1,783          1,121             1,036 
                                          -------------  -------------  ---------------- 
     Total assets                                 6,872          6,098             5,901 
                                          =============  =============  ================ 
     Equity and liabilities 
     Share capital (note 4)                       3,321          3,237             3,275 
     Share premium                               25,076         23,148            23,906 
     Shares to be issued                            286            286               286 
     Share option and warrant reserve               610            972               925 
     Foreign exchange reserve                         9            129                66 
     Retained earnings                         (22,473)       (22,376)          (22,636) 
                                          -------------  -------------  ---------------- 
     Total equity                                 6,829          5,396             5,822 
                                          =============  =============  ================ 
     Current liabilities 
     Trade and other payables                        43             96                79 
     Loans                                            -            606                 - 
     Total liabilities                               43            702                79 
                                          =============  =============  ================ 
     Total equity and liabilities                 6,872          6,098             5,901 
                                          =============  =============  ================ 

Unaudited Consolidated Statement of Changes in Equity

For the period ended 30 June 2022

                            Share         Share        Shares         Share        Foreign       Retained         Total 
                          Capital       Premium         to be        Option       Exchange       Earnings 
                          GBP'000       GBP'000        Issued       Reserve        Reserve        GBP'000       GBP'000 
                                                      GBP'000       GBP'000        GBP'000 
     Balance 1 
      2021                  3,208        22,348           286           762            127       (22,406)         4,325 
     Loss for the 
      year                      -             -             -             -              -          (333)         (333) 
      loss                      -             -             -             -           (61)              -          (61) 
                     ------------  ------------  ------------  ------------  -------------  -------------  ------------ 
      loss for the 
      year                      -             -             -             -           (61)          (333)         (394) 
                     ------------  ------------  ------------  ------------  -------------  -------------  ------------ 
     Issue of 
      shares and 
      warrants                 67         1,558             -           266              -              -         1,891 
     Transfer on 
      of warrants               -             -             -         (103)              -            103             - 
     Total other 
      movements                67         1,558             -           163              -            103         1,891 
                     ------------  ------------  ------------  ------------  -------------  -------------  ------------ 
     Balance 31 
      2021                  3,275        23,906           286           925             66       (22,636)         5,822 
     Loss for the 
      period                    -             -             -             -              -          (152)         (152) 
      loss                      -             -             -             -           (57)              -          (57) 
                     ------------  ------------  ------------  ------------  -------------  -------------  ------------ 
      loss for the 
      period                    -             -             -             -           (57)          (152)         (209) 
                     ------------  ------------  ------------  ------------  -------------  -------------  ------------ 
     Issue of 
      shares                   46         1,170             -             -              -              -         1,216 
     Transfer on 
      of warrants               -             -             -         (315)              -            315             - 
     Total other 
      movements                46         1,170             -         (315)              -            315         1,216 
                     ------------  ------------  ------------  ------------  -------------  -------------  ------------ 
     Balance 30 
      June 2022             3,321        25,076           286           610              9       (22,473)         6,829 
                     ============  ============  ============  ============  =============  =============  ============ 

The following describes the nature and purpose of each reserve within shareholders' equity:

   Reserve                                           Description and purpose 

Share capital Amount subscribed for share capital at nominal value

Share premium Amount subscribed for share capital in excess of nominal value, net of allowable expenses

Shares to be issued Share capital to be issued in connection with historical acquisition

Share option and warrant reserve Cumulative charge recognised under IFRS2 in respect of share-based payment awards

Foreign exchange reserve Gains/losses arising on re-translating the net assets of overseas operations into sterling

Retained earnings Cumulative net gains and losses recognised in the statement of comprehensive income

Consolidated Statement of Cash Flows

For the period ended 30 June 2022

                                                          Unaudited             Audited 
                                                     Six Months ended         Year ended 
                                                  30 June       30 June       31 December 
                                                     2022          2021              2021 
                                                  GBP'000       GBP'000           GBP'000 
     Cash flows from operating activities 
     Loss before taxation                           (152)          (27)             (333) 
     Change in fair value of investments                1         (139)               (8) 
     Finance costs                                      -             9                11 
                                                    (151)         (157)             (330) 
     Changes in working capital 
     Receivables                                       30             9                 1 
     Payables                                        (31)          (33)              (39) 
                                             ------------  ------------  ---------------- 
     Net cash used in operating activities          (152)         (181)             (368) 
                                             ============  ============  ================ 
     Cash flows from investing activities 
     Expenditure on exploration and 
      evaluation assets                             (345)         (157)             (399) 
     Sale of listed investments                        58             -               152 
     Net cash used in investing activities          (287)         (157)             (247) 
                                             ============  ============  ================ 
     Cash flows from financing activities 
     Proceeds from share issues                     1,276           648             1,249 
     Net cash from financing activities             1,276           648             1,249 
                                             ============  ============  ================ 
     Net increase/(decrease) in cash 
      and cash equivalents                            837           310               634 
     Cash and cash equivalents at 
      1 January 2022                                  886           252               252 
     Cash and cash equivalents at 
      30 June 2022                                  1,723           562               886 
                                             ============  ============  ================ 

Notes to the unaudited condensed consolidated financial statements

For the period ended 30 June 2022

1. Incorporation and principal activities

Country of incorporation

Armadale Capital Plc was incorporated in the United Kingdom as a public limited company on 19 August 2005. Its registered office is 1 Arbrook Lane, Esher, Surrey, KT10 9EG.

Principal activities

The principal activity of the Group during the period was that of an investment company.

2. Accounting policies

   2.1.   Statement of compliance 

The financial information for the six months ended 30 June 2022 and 30 June 2021 is unreviewed and unaudited and does not constitute the Group's statutory financial statements for those periods within the meaning of Section 434 of the Companies Act 2006. The comparative financial information for the year ended 31 December 2021 has been derived from the Annual Report and Accounts, which were approved by the Board of Directors on 20 May 2022 and delivered to the Registrar of Companies. The report of the Auditors on those accounts was unqualified and did not contain any statement under Section 498 of the Companies Act 2006.

This condensed set of financial statements has been prepared in accordance with IAS 34 'Interim Financial Reporting' as adopted by the European Union. This condensed set of financial statements should be read in conjunction with the annual financial statements for the year ended 31 December 2021 which have been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the United Kingdom.

The accounting policies adopted are consistent with those of the annual financial statements for the year ended 31 December 2021 as described in those annual financial statements.

In respect of new financial reporting standards which came into effect for reporting periods beginning on 1 January 2022, the Directors consider that their implementation has no material effect on the financial information presented in this statement.

   2.2.   Going Concern 

The financial statements have been prepared on the going concern basis as, in the opinion of the Directors, there is a reasonable expectation that the Group will continue in operational existence for the foreseeable future. The Company's ability to continue as a going concern and to achieve its long term strategy of developing its exploration projects is dependent on further fundraising. During the period, a total of GBP1,276,000 was raised from warrant exercises (see note 4). At 30 June 2022, the Group had cash of GBP1,723,000.

2.3. Exploration and evaluation assets

These assets are recorded at cost and are amortised over their expected useful life on a pro rata basis of actual production for the period to expected total production.

   2.4.   Investments 

Investments are stated at fair value.

   3.      Loss per share 

The calculation of loss per share is based on a loss of GBP152,000 (2021, GBP27,000) and on 560,588,302 (2021, 480,763,732) Ordinary Shares, being the weighted average number of Ordinary Shares in issue during the period.

There was no difference between basic loss per share and diluted loss per share as the Group reported a loss for the period.

   4.      Share capital 

During the period, 48,868,969 warrants were exercised providing proceeds of GBP1,276,000.


For further information, please visit the Company's website www.armadalecapitalplc.com , follow Armadale on Twitter @ArmadaleCapital or contact:

     Armadale Capital Plc 
      Tim Jones, Company Secretary                        +44 (0)20 7236 1177 
     Nomad and broker: finnCap Ltd 
      Christopher Raggett / Seamus Fricker /Edward 
      Whiley                                              +44 (0)20 7220 0500 

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU No. 596/2014) which is part of UK law by virtue of the European Union (Withdrawal) Act 2018. Upon the publication of this announcement, this inside information is now considered to be in the public domain.


Armadale's wholly-owned Mahenge Liandu Graphite Project is located in a highly prospective region, with a high-grade JORC compliant indicated and inferred mineral resource estimate announced February 2018 - 59.5Mt at 9.8% TGC. This includes 11.5Mt @ 10.5% Measured 32.Mt Indicted at 9.6% and 15.9Mt at 9.8% TGC, making it one of the largest high-grade resources in Tanzania.

The work to date has demonstrated the Project's potential as a commercially viable deposit, with significant tonnage, high-grade coarse flake and near surface mineralisation (implying a low strip ratio) contained within one contiguous ore body.

The Company's updated Definitive Feasibility Study (June 2020) confirmed Mahenge as a long-life low-cost graphite project with a US$430m NPV and IRR of 91% based on a two-stage expansion strategy comprising:

-- Stage One - processing plant and infrastructure at a nominal design basis rate of 0.4-0.5 Mt/pa to produce a nominal 60,000t/pa graphite concentrate in the first three years of production

-- Stage Two - a second 0.5 Mt/y plant and associated additional infrastructure doubling throughput to 1 Mt/y from Year 5 of operation

The DFS shows that Armadale can be a significant low-cost supplier to the graphite industry with the potential to generate pre-tax cashflows of US$985m over an initial 15 year mine-life and scope for further improvement as this utilises just 25% of the current resource, which remains open in multiple directions.

Projected timeline to first production is expected to be approximately 10-12 months from the start of construction and the capital cost estimate for Stage 1 is US$39.7m, which includes a contingency of U$S4.1m or 15% of total direct capital cost, with a 1.6 year payback for Stage 1 (after tax) based on an average sales price of US$1,112/t. Stage 2 expansion is expected to be funded from cashflow.

More information can be found on the website www.armadalecapitalplc.com .

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