Feasibility study results promising at Armadale's Mpokoto project

Armadale Capital was looking to fully fund its Mpokoto Gold Project on Monday, having revealed some promising results from the feasibility study at the facility in the Democratic Republic of Congo.

The AIM-traded investment firm, which focuses on natural resource projects in Africa, said the study was based on the intended initial phase of mining at Mpokoto, focusing on shallower oxide portions.

Armadale said the study showed a total mineral resource of 678,000 ounces of gold from 14.58m tonnes, at 1.45 grams per tonne (at a cut off grade of 0.5 grams per tonne).

The Phase 1 open pit mining currently scheduled over four years would produce an average of 24,900 ounces of gold per annum, with total revenues of $138.6m. It would produce an annual pre-tax net operating profit of $11.14m.

Armadale's capital cost would be $25.15m, with operating costs of $792 per ounce. The net present value of Phase 1 was $19.05m, it said, based on a discount rate of 5%, a gold price of $1,250 per ounce and internal face of return of 44%.

"The results of the study demonstrate that Mpokoto is a commercially valuable gold development project, confirming its technical viability as well as offering attractive returns and near term production potential", said Armadale chairman Peter Marks.

"Having completed this initial phase of the study, we are now focused on finalising the funding of the project with our partners, A-MCS. These discussions are ongoing, and once finalised construction of the project can commence", he added.

The mine's expanded scoping study also demonstrated Phase 2 had an additional net present value of approximately $20m, with significant further upside potential from unweathered ore at a depth of 30 metres.