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Armadale Capital moves into "proven" flake graphite area in Tanzania

Graphite is used in a number of electronic components

Tesla,_electric_car,_battery,_Lithium.png
Tesla supercharging the market? It takes 20 to 30 times more graphite than lithium to make lithium-ion batteries

Armadale Capital PLC (LON:ACP) has moved into the graphite market with the acquisition of an exciting deposit in south-east Tanzania.

The AIM-listed firm has agreed to buy the Mahenge Liandu Graphite Project in an all-paper deal from Aussie outfit Graphite Advancement Tanzania (GAT). It is issuing 80mln shares.

The project is in an area of “proven coarse flake, high grade graphite resources”, the company said.

Two Australian miners, Kibaran Resources and Black Rock Mining are developing graphite projects on adjacent to the site.

What the boss says…

Peter Marks, Chairman of Armadale, told investors: “This transaction creates a significant opportunity for Armadale in an industry with exciting demand fundamentals.

“Mahenge Liandu is in an area of known high quality graphite indicating that this Project area may benefit from similar high mineral values.”

The company has already drilled and sampled three holes, and the results have “further reinforced” its confidence that the Mahenge Liandu Project is an “ideal investment target”.

Graphite is the new black…

The graphite market is expected to double over the next eight years, according to the company, led by an increase in demand electronic devices.

There are three types of natural graphite, flake, amorphous and high crystalline.

New applications including lithium-ion batteries, fuel cells and nuclear power have the potential to create significant demand growth.

It takes 20 to 30 times more graphite than lithium to make lithium-ion batteries, key in the new wave of electric cars being brought to market.

Benchmarking…..

As mentioned, ACP’s project is near Kibaran Resources’ Epanko project, which has a proved and probable 10.9mln tonne ore reserve, a bankable feasibility study and an off-take deal with metals giant ThyssenKrupp.

ASX-listed Kibaran, with a market capitalisation of £25mln, provides a potential benchmark valuation for ACP (worth around £1.4mln).

The same goes for Blackrock Mining, another Tanzania focused Aussie graphite play (market cap £7mln).

 

Don’t forget Mpokoto…

At the same time, the company remains in talks over a finance package to build its Mpokoto gold mine in the Democratic Republic of Congo.

African Mining Contracting Services Group (A-MCS) offered to put up US$20mln to build the mine last June but has yet to conclude its due diligence.

Quick facts: Armadale Capital PLC

Price: 3.195 GBX

AIM:ACP
Market: AIM
Market Cap: £12.88 m
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