10 / 68
8
MODERN MINING
June 2015
MINING News
AIM-quoted Armadale Capital has signed
a Heads of Terms agreement with the
Africa Mining Contracting Services group
(A-MCS) with a view to funding, devel-
oping, constructing and operating the
Mpokoto gold project in the DRC’s Katanga
Province.
The agreement envisages that A-MCS
will introduce investors to provide at least
US$20 million of loan financing with a
view to funding Mpokoto into production,
which is targeted for H1 2016.
Paul Smith steps down as
COO of Wesizwe Platinum
Wesizwe Platinum Limited has announced
the departure of Paul A. Smith, the compa-
ny’s Chief Operating Officer, who is leaving
with immediate effect to pursue other per-
sonal interests.
Smith joinedWesizwe in January 2013 and
served the company up to 9 June 2015. He
was a member of Wesizwe’s Executive Team,
supporting the CEO in the ongoing develop-
ment of the company’s flagship Bakubung
Platinum Mine (BPM) project, located on the
Western Limb of the Bushveld Complex, close
to Rustenburg in NorthWest Province.
“This is a landmark agreement for our
strategy of bringing Mpokoto into produc-
tion within the next 12 months,”says Justin
Lewis, Director of Armadale.“The provision
of at least US$20 million project finance is
a crucial step in the project’s development
and, with extensive local experience, we
are delighted to have signed with A-MCS.
We will now work closely with our new
partners to finalise the DFS and the defini-
tive agreements to deliver a low cost, low
capex mine capable of generating excel-
lent returns for shareholders. With this
funding and development agreement,
an initial NPV of US$55,3 million (£36,3
million) based on a forecast gold price
of US$1 250/oz, and a further potential
resource upgrade, Mpokoto continues to
show its commercial value.”
The key components of the capital
cost identified in the scoping study were
US$8,25 million for the processing plant,
US$3,75 million for associated infrastruc-
ture and US$8,5 million for infrastructure.
The final amount of funding will be subject
to the results of the DFS.
A-MCS has agreed to work with
Armadale and its principal consultant,
Bara Consulting, to complete the DFS on
the project. This will ensure that Armadale
benefits fromA-MCS’s in-country expertise
Armadale signs agreement on Mpokoto development
and that the costs, both capital and opera-
tional, are agreed between all parties and
reflect the final terms agreed between the
parties to construct and operate the mine
through the mining services contract.
This process will also form a crucial part
of the due diligence being undertaken by
A-MCS and the investors that it intends to
introduce.
Mpokoto has a current total mineral
resource of 678 000 oz Au from 14,58 Mt
at 1,45 g/t Au at a cut-off grade of 0,5 g/t.
It is envisaged that the mine will produce
approximately 25 000 oz per annum over
a nine-year life of mine. The results of an
Expanded Scoping Study demonstrated
a post-tax NPV of US$55,3 million based
upon a discount rate of 8 % and a gold
price of US$1 250/oz.
The project comprises four mining
licences which are valid for an initial term
of 30 years from 30 September 2014.
Significant further upside is anticipated
with an exploration target of 2,4 to 3,0 Mt
grading 1,25-1,5 g/t Au which Armadale
estimates should yield an additional
120 000-150 000 oz Au to the project. A
proposed drilling programme is already
planned targeting primary mineralisation
and down dip mineralisation beyond the
present pit limits.
Reverse circulation drilling in progress at the Mpokoto site (photo: Armadale Capital).