DRC – The proposed exploration programme for the coming year at Mpokoto, situated in the Katanga Province of the DRC, will include a 2 000 m auger drill programme, followed by a 2 500 m diamond drill programme.
In addition, Armadale Capital has been reviewing historical results in the wider Kisenge licence area with a view to identifying further exploration targets.
The planned life of mine currently stands at four years for Phase 1 production.
Armadale Capital hopes to expand the current Total Mineral Resource of 678 000 oz gold from 14.58 Mt at 1.45 g/t at a cut-off grade of 0.5 g/t and improve the overall project economics which are benefiting from the current gold price environment.
To progress the commencement of this exploration programme ahead of anticipated initial gold production, the company has raised £210 000 through the placing of 7 000 000 new ordinary shares of 0.1 pence each in the capital of the company at a price of 3p pence per share.
With regards to overall project financing, Armadale Capital continues its negotiations with Africa Mining Contracting Services group (A-MCS) regarding finalising the project finance of at least US$20 million for Mpokoto.
“Having identified multiple prospective targets from which to extend the current defined resource of 678 000 oz gold, we are confident we can invest this capital to both increase the established resource and enhance the already compelling economics,” says Dr Andrew Tunks, Director of Armadale Capital.
“The exploration programme will initially target, with auger drilling, oxide mineralisation to the north and south of the main ore bodies where mineralisation remains open along strike, and then, the high-grade mineralisation adjacent to previous hole MPD064, which intercepted 55 m at 3.8 g/t gold including 15.4 t 10.5 g/t with the diamond drilling programme.”
“There is increasing interest in near term gold projects and we believe through targeted investment we can raise the value of Mpokoto significantly.”
The Mpokoto feasibility study projected operating costs of $792/oz and a pre-tax net present value of $19.05 million has been established for Phase 1, which importantly relates only to the shallow oxide ore body (30 – 40 m) and a gold price of $1 250/oz.
[quote]With the work planned, there is potential to increase the NPV further through the inclusion of the deeper unweathered ore in Phase 2, which has an additional NPV of approximately $20 million, in addition to the potential resource increase possible from the upcoming drill programme.
With further considerable upside to the current resource model and clear routes to production, Armadale Capital believes it is well positioned to advance discussions with A-MCS to finalise project financing for at least $20 million.
As previously announced, to support this programme, the company has formed an alliance with Alpha Drilling, a Botswana based drilling organisation with operations in the DRC and extensive experience in sub-Saharan Africa, to provide in-house drilling capacity.
It is proposed Alpha will supply and operate a diamond drilling rig with the alliance benefitting the Company through a lowering of the overall cost of drilling.
Additionally, Armadale Capital is undertaking an on-going review of the extensive database generated by previous owners of the larger Kisenge exploration licence. This has generated an initial exploration target at Katombe, which shows an anomaly of gold, tungsten and arsenic over a 12 km length in an east west direction.
Historical drilling returned three gold intersections. The company will look at conducting a further programme of geophysical and geochemical work at this prospect.
The company continues to target low-cost commercial production. Phase 1 operations will focus on open pit mining presently scheduled over four years (annual mine production of 720 000 tpa to produce an average 24 900 oz of gold per annum, which is expected to generate average annual revenues of $30.80 million at a gold price of $1 250/oz.