Armadale Capital
Drilling at Armadale Capital's Mpokoto gold project site in the DRC
AIM-listed Armadale Capital is underway with an exploration programme at its Mpokoto gold project to increase the planned life of mine and improve project economics.

Democratic Republic of Congo – Armadale Capital, the investment company focused on natural resource projects in Africa, initiated a 2 000 m auger drill programme consisting of approximately 150 auger holes at its Mpokoto gold project in the Katanga province of the Democratic Republic of Congo earlier this year.

Armadale Capital reports that despite the ongoing rainy season, to date approximately 53 holes have been completed and qualitative sampling by panning the drill spoil demonstrates that the gold mineralisation previously identified extends to both the north-west and south-east of the current defined resource zone at Mpokoto, which hosts 678 000 oz of gold.

The present exercise will, on completion, be followed up with further auger drilling on a tighter grid to delineate target mineralisation which will then be the focus of apportion of the planned 2 500 m diamond drill programme to test prospective targets identified in late 2015, which indicate possible strike extensions of the known high grade gold mineralisation.

As well as focussing on the north and south oxide extension a portion of the programme will test for high-grade gold extensions around hole MPD 064 which intersected 55 m grading at 3.3g/t from 45 m including 15.4 m grading at 10.5g/t from 80 m.

The objective of the overall exploration programme is increasing the planned life of mine, which currently stands at four years for Phase 1 production, expanding the current total mineral resource of 678 000 oz of gold from 14.58 Mt grading at 1.45g/t of gold at a cut-off grade of 0.5g/t.

This will also improve the overall project economics which are benefiting from the current gold price environment.

To progress the exploration programme ahead of anticipated initial gold production, the company raised £210 000 earlier this year through the placing of 7 million shares of 0.1 pence each in the capital of the company at a price of 3 pence a share with existing investors.

With regards to overall project financing, Africa Mining Contracting Services group continues to undertake its review of the feasibility study and the parties remain in discussions with a view to finalising the project finance of at least US$20 million for Mpokoto.

Both parties understand the positive impact an increase in life of mine and resources will have on the economics of the project and remain confident on finalising the details of the financing.

“We continue to work to develop and add further value to Mpokoto alongside our funding discussions,” says Armadale Capital chairman Peter Marks, who believes that there is increasing interest in near term gold projects in particular as the gold price continues rise.

The Mpokoto feasibility study projected operating costs of $792/oz and a pre-tax net present value (NPV) of $19.05 million has been established for Phase 1, which importantly relates only to the shallow oxide orebody (30 m-40 m) and a gold price of $1 250/oz.

“With the exploration work, 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 drill programme,” says Marks.