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

Client
Armadale Capital.

Project Description
A prefeasibility study completed on the proposed first phase of the Mpokoto project has shown robust fundamentals.

The study is based on the intended initial phase of mining at the project that will focus on the shallower oxide portion of the resource, which will be prioritised for exploitation in conjunction with the continued development of the deeper unweathered ore designated for Phase 2.

Mining is planned using standard openpit methods, owing to the differing metallurgical process recovery of the different types of material sequencing. Mining will focus on mining oxide material first, followed by transition ore. This approach is supported by the different material types that are situated sequentially on top of each other, with oxide material at surface followed by transition and fresh material.

The oxide ores planned to be mined initially are situated in the deeply weathered zone. The rock in this zone is weak and friable; it has been assumed that the material will be free dig, down to depths of about 30 m to 40 m. Waste and ore will be loaded using a hydraulic shovel tipping into 40 t articulated dump trucks for hauling to the plant or waste dumps. Waste dumps will be adjacent to the pits. Below the weathered zone, drill-and-blast will be employed on transition material prior to loading and hauling. Mining costs will, therefore, differ for each material type.

Five discrete pits have been identified along the strike of the orebody, with a maximum depth of mining 60 m below surface in the main Pit A. The mine is planned to produce at 60 000 t/m, with 73% of production being mined from the main pit. A total of 3.018-million tonnes will be mined at a strip ratio of 2.43 t of waste to 1 t of ore. Run-of-mine grade is estimated at 1.40 g/t, with 136 210 oz of gold delivered to the mill.

The Phase 1 processing plant will be built to process predominantly oxide ores. Phase 2 will cover the mining and processing of sulphide ore. The ore that will be delivered to the plant initially will be amenable to gravity methods of gold recovery. The process will comprise scrubbing, crushing and milling, followed by gravity concentration prior to the carbon-in-leach, elution and electrowinning of gold. The estimated metallurgical recovery for this plant is 84%. The proposed plant has been expanded from what was proposed in the scoping study as a result of the additional metallurgical work undertaken. Subsequently, another crusher was added.

Net Present Value/Internal Rate of Return
The PFS estimates a pretax net present value for Phase 1, based on a 5% discount rate, of $19.05-million and an internal rate of return of 44%, at a gold price of $1 250/oz

Value
The start-up capital cost for the project is estimated at $25.15-million.

Duration
Not stated.

Latest Developments
Armadale plans to start an extensive exploration programme to identify further prospects to expand the current 678 000 oz gold mineral resource of the Mpokoto gold project.

A 2 000 m auger drill programme followed by a 2 500 m diamond drill programme will be initiated this year to expand the total mineral resource extracted from 14.58-million tonnes at 1.45 g/t of gold at a cutoff grade of 0.5 g/t. The programme will also extend the life-of-mine beyond the initial nine-year outlook and improve the overall project economics.

Using auger drilling, the exploration programme will initially target, oxide mineralisation to the north and south of the main orebodies, where mineralisation remains open along strike, and then the high-grade mineralisation adjacent to previous hole MPD064, which has intercepted 55 m at 3.8 g/t gold, including 15.4 m at 10.5 g/t gold with the diamond drilling programme.

The exploration programme will be funded through a £210 000 raising after the placement of seven-million new ordinary shares of 0.1p at a price of 3p apiece with existing investors.

Meanwhile, discussions with Africa Mining Contracting Services to finalise $20-million in project financing is continuing.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
Armadale Capital investor relations, Charles Zorab, tel +44 207 233 1462.