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

26 November 2014

Armadale Capital Plc (‘Armadale’ or ‘the Company’)

Update on Metallurgical Testwork at Mpokoto Gold Project

Armadale, the AIM quoted investment company focused on natural resources projects in Africa, is pleased to announce a positive update on the metallurgical testwork programme for the Mpokoto Gold Project (‘Mpokoto’ or the ‘Project’) in the Katanga Province of the Democratic Republic of Congo which has demonstrated increased gold recoveries of 84% from transitional and fresh ore.

This follows the completion of metallurgical testwork on the deeper transitional and fresh ores. Further testwork is to be carried out over the next few months with a view to increasing the recovery of gold from the shallower oxide ore at Mpokoto.

Mpokoto has a current Total Mineral Resource of 678,000oz gold (‘Au’) from 14.58 million tonnes (‘Mt’) @ 1.45g/t Au at a cut-off grade of 0.5g/t. The Company has recently announced the results of an Expanded Scoping Study for Mpokoto which demonstrated a post-tax net present value of US$55.3m based upon a discount rate of 8% and a gold price of US$1,250/oz. The Project is subject to four Mining Licences which are valid for an initial term of 30 years from 30 September 2014.

Highlights:

• Testwork demonstrated an increased gold recovery of 84% from the transitional and fresh ore (previously 81%) which totals more than 300,000 ounces
• Metallurgical testwork on oxide ore has previously demonstrated recoveries of 90%
• Anticipated recovery of 90% of contained gold from the oxide ores
• Further testwork on oxide ores is to be undertaken with the objective of further increasing recoveries – samples have been dispatched from Mpokoto
• Defined development strategy to rapidly advance the Project through to low capex, low opex gold production in H1 2016 – additional drilling is planned for early 2015 to further expand resource and overall size of Project

Justin Lewis, Director of Armadale, said, “The scope and scale of the Mpokoto Gold Project continues to grow and fuel our confidence that we will be able to deliver a low capex, low opex commercial gold mining project in the near future. The results of this metallurgical testwork further increase the anticipated gold recoveries achievable from the deeper transition and fresh ore. Higher recoveries will further improve the economics of the Project and lower the costs of producing gold on a unit basis.

“Mpokoto continues to offer highly attractive returns and near term production potential, with robust economics even at low gold prices, and we are focused on rapidly advancing this Project into production in H1 2016. The continued unlocking of the Project’s resource potential represents a major step within this development, and we now remain focused on completing further value enhancing milestones. Over the next few months we will be undertaking a drilling programme with the intention of further expanding the resource at Mpokoto as well as further metallurgical testwork, all of which will feed into a full feasibility study.

“With these initiatives in mind, I expect the remainder of the year to be highly active in terms of news flow.”

Summary of results of Metallurgical Testwork

Subsequent to the completion of metallurgical testwork on the oxide ores which showed a recovery of 90% of the contained gold, further metallurgical testwork has been undertaken to focus on the transition and fresh rock ore zones, which represent a target of over 300,000 ounces lying below the oxide ore and above the 120 metre below surface level. The results for this testwork have now been received.

The testwork programme incorporated semi-batch (low mass yield) gravity recovery as used for free gold, flotation of gravity tails, ultrafine milling of gravity tails prior to gravity amenability testing (GAT). The flotation concentrate was then cyanide leached.

The testwork demonstrated that gravity extraction using a Knelson Centrifugal Concentrator, following a grind to 80% passing 75 microns, recovered approximately 43% of the gold in the transition and fresh ore zone. Flotation of the gravity tailings, followed by fine grinding and intense cyanidation of the flotation concentrate, recovered a further 41% of the gold. Overall recovery was therefore 84%.

Low cost modular process equipment is available; this will allow the Project’s metallurgists to design additions to the initial oxide plant to treat the transition and fresh rock to recover up to 84% of the contained gold. The current Expanded Scoping Study has used a more conservative recovery of 81% pending confirmation of the recovery from the batch Knelson concentrator in pilot scale testwork.

As set out in the Expanded Scoping Study, the plant additions, required only after the oxide plant has been in operation for approximately 4 years, will have a capital cost of approximately US$13 million and will extend the life of the mine by over 5 years.

The testwork was carried out in the laboratories of Peacocke and Simpson in Harare, Zimbabwe. The consulting metallurgist overseeing the testwork and plant design for Armadale is Richard Way of Bara Consulting – a Johannesburg based mining consultancy firm.

Further Metallurgical Testwork

Over the next few months further testwork is being undertaken on the oxide ore. Further samples have recently been selected and are being dispatched to Peacocke and Simpson for further tests. The aim of these tests will be to confirm the design of the current process flowsheet and will also seek to further improve the current anticipated 90% recovery of gold from the oxide ores. Increasing the rate of recovery should result in a further reduction of operating costs per ounce of gold produced as well adding value to the overall Project.

About Mpokoto Gold Project

Mpokoto is located in the western part of the Katanga Province approximately 250km west of Kolwezi in the Democratic Republic of Congo, approximately 25km from the Zambian border. The area is highly prospective, with local operators including Ivanhoe Mines and Glencore Plc. Since 1998, approximately US$20 million has been spent on gold exploration at the Project.

Competent Person Statement:

Scientific or technical information in this release has been reviewed by Mr. Andrew (Jim) Pooley Pr Eng, BSc Eng (Hons), FSAIMM, Managing Director, of Bara Consulting Pty Ltd. Jim Pooley is a fellow of the Southern African Institute of Mining and Metallurgy and has over 19 years’ experience, which is relevant to the style of mineralisation under consideration and to the activity which he is undertaking to qualify as a Competent Person, as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” (the JORC Code). Mr. Jim Pooley consents to the inclusion in this announcement of the information, in the form and context in which it appears.

A copy of the announcement can be found on the Company’s website at www.armadalecapitalplc.com.

Glossary of Technical Terms

**ENDS**

Enquiries:

Company
Justin Lewis, Director +61 439 162369
Charles Zorab +44 207 233 1462

Nomad and broker: finnCap Limited
Stuart Andrews/ Christopher Raggett +44 207 220 0500

Press relations: St Brides Media & Finance Ltd.
Susie Geliher/Charlotte Heap +44 207 236 1177

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

Notes

Armadale Capital Plc is focussed on investing in and developing a portfolio of investments, targeting the natural resources sector in Africa. The Company, led by a team with operational experience and a strong track record in Africa, has a strategy of identifying high growth potential businesses where it can take an active role in their advancement.

Armadale owns 80% of the Mpokoto Gold Project in the Democratic Republic of Congo. Armadale is focussed on proving up the resource potential of Mpokoto with a view to commencing commercial gold production.

Armadale also holds approximately a 30% interest in Mine Restoration Investments Ltd, a South African listed company, which aims to develop profitable operations within the South African mining industry through its coal briquetting operation in KwaZulu Natal.

In addition, Armadale has a small portfolio of listed investments which are focused on gold and copper production and exploration. The Directors continue to maintain an active acquisition strategy and will review investment opportunities that they believe have the potential to be accretive in terms of shareholder value.

Copyright Business Wire 2014

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