[DR Congo] Armadale sells Mpokoto gold project to Weghsteen Capital Advice SA for $562,500
Armadale, the AIM quoted investment company focused on natural resource projects in Africa has entered into an agreement with Weghsteen Capital Advice SA to sell its interest in the Mpokoto Gold Project in the Democratic Republic of Congo for total potential consideration of $562,500 and a 1.5% royalty on gold produced.
WCA is acting on behalf of Radismore Limited (‘Radismore’), an investment vehicle incorporated under BVI law, which is fully funded and committed to starting gold production at Mpokoto within two years. The agreement is subject to execution of a formal binding agreement, which is expected Q1 2018.
The proposed agreement enables Armadale to maximise the value it receives for Mpokoto while benefiting from future gold production through a 1.5% royalty. Sale of non-core investment asset enables Armadale to focus on fast tracking the Mahenge Liandu Graphite Project (‘Mahenge’) – funds from Mpokoto will be used to support development – and consider other investment opportunities in line with the Company’s existing investing policy.
The Agreement strengthens Armadale’s strategic investment portfolio and near-term production potential – Radismore is committed to advancing Mpokoto into gold production within two years, whilst feasibility studies at Mahenge in 2018 support a decision to mine being made in the near term
Nick Johansen, Director of Armadale said, “ We are pleased to have secured this strategic sales agreement and believe that Radismore and its associates have the necessary funds and skill set to advance Mpokoto into production and unlock the asset’s value potential. Crucially, we will retain an interest in Mpokoto through a royalty without the burden of development and production cost. This strategic interest in turn means that we can concentrate our resources on developing the Mahenge Liandu Graphite project in Tanzania, which offers near term development opportunity with multiple value accretive milestones expected this year. A drilling programme aimed at significantly increasing the size of the deposit is planned for Q2 2018, whilst the results of a scoping study are due Q1, and a feasibility study is expected to commence thereafter with the objective of reaching a decision to mine in the near term. We are very excited for the year ahead and look forward to updating shareholders on these exciting developments and the finalisation of the sale.”
Under the terms of the agreement, Armadale has agreed to sell its 80% interest in Mines d’Or de Kisenge sarl, which through Kisenge Limited (‘Kisenge’), a wholly owned subsidiary of Armadale, holds Mpokoto. MDDK is owned 80% by Kisenge and 20% by Enterprise Miniere de Kisenge-Manganese sarl (‘KMC’), a Congolese government owned entity.
Prior to this agreement, Armadale had previously entered into a joint venture agreement with Kisenge Mining Pty Ltd (‘Kisenge Mining’) for Mpokoto. Kisenge Mining has agreed to withdraw from the joint venture agreement to allow the new HOA to proceed.