Name and Location
Mpokoto gold project, Katanga province, Democratic Republic of Congo.

Client
Armadale Capital.

Project Description
An expanded scoping study on Mpokoto has demonstrated that it is a robust, low-cost gold development project with attractive economic fundamentals, even at a gold price of $1 000/oz.

The project has a current total mineral resource of 678 000 oz of gold from 14.58-million tonnes grading 1.45 g/t of gold at a cutoff grade of 0.5g/t to produce about 25 000 oz/y over a nine-year life-of-mine.

Net Present Value/Internal Rate of Return
The expanded scoping study has increased the project’s post-tax net present value (NPV) by 68% – based on a discount rate of 8% and a gold price of $1 250/oz from $33-million in the previous study published in April 2014 to $55.3-million. The project has a payback period of 20 months.

Value
The total capital cost of the project is estimated at $20.4-million.

Duration
Production is targeted for the first half of 2016.

Latest Developments
Through a subsidiary, Armadale has signed a heads of terms agreement with the Africa Mining Contracting Services (A-MCS) group to fund, develop, build and operate the Mpokoto gold project.

The agreement, which is subject to the execution of a final, definitive agreement between the parties, envisages that A-MCS will introduce investors to provide at least $20-million of loan financing to fund Mpokoto to production.

A-MCS has agreed to work with Armadale and its principal consultant, Bara Consulting, to complete the definitive feasibility study (DFS) on the project.

This will ensure that the group benefits from A-MCS’s in-country expertise and that capital and operational costs, and the final terms that they reflect are agreed between all parties and reflect the final terms agreed between the parties to build and operate the mine through the mining services contract.

As a result, the Armadale board has decided to delay the publication of the final results from the DFS until the results have been reviewed and agreed on by A-MCS, with publication of the results expected during the next quarter in conjunction with the finalisation of definitive agreements with A-MCS.

The overall results of the DFS are expected to be in line with the published expanded scoping study and, as a result of this partnership, the overall timeline to the start of production in the first half of 2016 is now more secure.

Further significant upside exists at the project, with an exploration target of 2.4-million tonnes to 3-million tonnes grading 1.25 g/t to 1.5 g/t of gold, which Armadale estimates should yield an additional 120 000 oz to 150 000 oz of gold.

Key Contracts and Suppliers
Bara Consulting (DFS).

On Budget and on Time?
Not stated.

Contact Details for Project Information
Armadale chairperson Peter Marks, tel +61 3 9824 8166, fax +61 3 9824 8161 email pmarks@armadalecapitalplc.com