Armadale Capital unveils "landmark" deal to fund Mpokoto Gold Project

8th Jun 2015 09:40

Shares in Armadale rocketed after the natural resources firm announced a "landmark" deal with the Africa Mining Contracting Services group (A-MCS), which will fund, develop and operate its Mpokoto Gold Project the Democratic Republic of Congo (DRC).Under the agreement, A-MCS will provide at least $20m of loan financing to fund Mpokoto into production, which Armadale has planned for the first half of 2016."This is a landmark agreement for our strategy of bringing Mpokoto into production within the next 12 months," Armadale director Justin Lewis said."The provision of at least $20m 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 definitive feasibility study (DFS) and the definitive agreements to deliver a low cost, low capex mine capable of generating excellent returns for shareholders."The definitive agreement is expected to be signed in the next quarter, alongside delivery of the DFS.Mpokoto has a current total mineral resource of 678,000oz gold from 14.58m tonnes at 1.45g per tonne of gold at a cut-off grade of 0.5g per tonne to produce approximately 25,000 oz each year over a nine year life of mine."With this funding and development agreement, an initial net present value of $55.3m (£36.3m) based on a forecast gold price of $1,250/oz, and a further potential resource upgrade, Mpokoto continues to show its commercial value," Lewis added.