Armadale Capital eyes 'substantial' natural graphite resource in Tanzania

Graphite explorer Armadale Capital said the success of the recent drilling programme at its Mahenge Liandu project in Tanzania indicated the likely presence of a substantial and low-cost resource, which it hoped to confirm by the end of the year.

Out of 21 holes drilled, metallurgists logged 18 that showed high-grade coarse flake graphite mineralisation over a 2km strike length.

As all graphite mineralisation has so far been found near the surface, implying relatively low costs for extraction, while the quality of the graphite in the area has been confirmed the graphite projects being developed by ASX-listed Kibaran and Black Rock immediately adjacent to Mahenge Liandu.

Chairman William Frewen said it was an "exceptional result" for the AIM-listed company and that preliminary findings from the JORC modelling now underway indicated a "substantial size graphite resource", with formal results expected by late December.

“With global demand for natural graphite expected to increase substantially over the next few years, the board is now focused on developing global marketing and supply chain evolution strategies," Frewen said.

"The board believes Armadale can rapidly advance Mahenge Liandu and carve out a differentiated niche from its neighbouring peers. Ideally, this will be achieved by focusing primarily on the European market, as more clarity on the end product quality and potential scalability of mining operation materialises."

Shares in Armadale were up 28% to 4p just before midday on Wednesday, their highest level since late last year.