JOHANNESBURG (miningweekly.com) – Aim-listed natural resource project developer Armadale has approached the market to raise net proceeds of £270 000, announcing on Wednesday the conditional placing of 966-million new ordinary shares of 0.01p each in the capital of the company at a price of 0.03p a apiece.

The company said it had also issued 99-million new ordinary shares to certain advisers at the placing price to settle advisory fees.

Armadale also announced that, by mutual agreement, there would be no further drawdowns from the company’s flexible funding option with institutional investment fund Bergen Global Opportunity Fund.

The proceeds of the placing would be used for the continued development of the Mpokoto gold project, in the Katanga province of the Democratic Republic of Congo, which had a gold resource of 678 100 oz. 

It would also provide general working capital for the company as it continued discussions with potential funding partners to secure the $20-million of capital required to start construction of the project ahead of the start of commercial gold production in the first half of 2016.

Armadale recently announced further positive metallurgical testwork on a number of samples of oxide ore from Mpokoto, which confirmed gold recovery of between 84% and 92% from the ore from Mpokoto, which confirmed gold recovery of between 84% and 92% from the ore.

The company was now finalising a definitive feasibility study (DFS) on the project, which would advance the work already undertaken as part of an expanded scoping study.

Chairperson Peter Marks said the funds would allow the group to progress the DFS in the near term, which was targeted for completion in the second quarter of the year.

“It will also provide us with a stable footing from which to continue our negotiations with regard to the financing required to commence construction of the project. 

“We look forward to advancing Mpokoto into production as a low capital expenditure gold project, with a post-tax net present value of $55.3-million and steady-state production of 25 600 oz over a nine-year life-of-mine,” he commented.