AGM ARMADALE CAPITAL PLC-Final Results and Notice of

AGM ARMADALE CAPITAL PLC-Final Results and Notice of

Strategic Report

For the year ended 31 December 2022

 Operational and Corporate Highlights for Period Ending 31 December 2022

Significant progress made in delivering key accretive milestones in advancing the Mahenge Liandu Graphite Project in Tanzania

1.    In February 2022 the Company applied for three incremental exploration licences which are prospective for graphite mineralisation and materially enhance the Mahenge Liandu Project's exploration potential.

2.    In March, the Company, pursuant to environmental compliance requirements of the mining license, successfully completed the installation of a weather station and has commenced the monthly collection of data. The station records data at 5 second intervals and covers all weather parameters including temperature, pressure, wind, moon phase, humidity, solar radiation and rainfall. All data is automatically uploaded to the cloud. This data is critical to establishing the base line information required to assist with the planning of the mining operations on the Project.

3.    In addition, the Company has also installed a total of 7 stream gauges and one barotroll in the water streams located at the mine site in March 2022 which will be used for the hydrological studies which will assist in the location and design of infrastructure for the operations. The devices record 3 parameters which are temperature, pressure and depth at 5 second intervals. The data from all devices are being manually downloaded at a frequency rate of once per month.

4.    As Part of the ongoing FEED study, the Company cleared pads for geotech drilling at the proposed plant Site and tailing dam location. 10 pads were cleared at the tailing storage facility area and 6 pads were cleared at the plant site area as a part of geotechnical studies and the Company is now preparing for Diamond Drilling in the proposed areas

5.    A test pit program has been completed at the proposed plant site, tailing storage facility and the access road areas. A total of 41 test pits with 3 meters depth have been excavated, DCP tested, strata logged, sampled and backfilled. 11 pits have been excavated at plant site, 25 pits excavated at tailing storage facility and 5 pits excavated at the access road to the mine site.

6.    The Company was granted the prospecting license PL 119961/ 2022 by the ministry of minerals on 28 June 2022, for the exploration of graphite minerals. The license area comprises of 19.99 square kilometres, located at Isongo and Liandu villages of Ulanga District, in Morogoro Region.

7.    Through the year, the Company's primary focus was on securing project development funding for the Mahenge Liandu Graphite project while advancing the permitting and local community engagement.

8.    The Company has received an encouraging level of interest in funding the Mahenge Liandu Graphite project and has advanced its discussions with a number of potential finance partners with respect to securing project development funding.

Post Period End

9.    The Company continues to collect environmental baseline data as is required for the compliance of the mining lease and to assist in the design and planning of the proposed mining operations. In addition, the base line data for temperature, pressure, wind, moon phase, humidity, solar radiation, rainfall and stream flow data assists the local community to have access to regional weather data for local planning requirements in the Mahenge region.

10.  Planning underway for Geotech drilling, with the sites now prepared for the drill rig. The information from the proposed drilling program will enable the detailed design of the plant and tails storage area. This information will enhance the data from the test pits that were completed last year.

11.  Logistics routes for the product continue to be assessed to determine the optimum methods to ensure the final product will enter the market at the desired price level.

12.  Discussions are ongoing with the Government of Tanzania regarding the framework for the 16% ownership, with draft Shareholder agreements, Articles of Association and Joint Financial model being submitted to both parties for review.

13.  Ongoing review of quoted portfolio, where the Directors believe there are opportunities for capital gains

14.  Continue to actively review other exciting investment opportunities.

During the year under review, Armadale continued to operate as a diversified investing group focused on natural resource projects in Africa. To this end, its portfolio is divided into two groups:

·    actively managed investments where the Company has majority ownership of the investment; and

·    passively managed investments where the Company has a minority investment, typically in a quoted company, and does not have management control.

Currently, the Company's key actively managed investment is the Mahenge Liandu Graphite Project in Tanzania.  At present, the Company is actively marketing the Project to potential industry partners and end users (offtakers) of graphite products.  The Company is also pursuing a range of potential options relating to development finance for the project


Mantengu Mining Limited (formerly Mine Restoration Investments Limited) South Africa

The Company's holding of shares in Mantengu Mining Limited ("MML") (formerly Mine Restoration Investments Limited), which were fully written off when MML entered administration, have been reinstated at their fair value of £105,000 following a reverse takeover by MML and a relisting of its shares on the Johannesburg Stock Exchange.

Quoted Portfolio

The Company has a portfolio of quoted investments, valued at £1,245,000 on 4 May 2023, principally in resource companies where the Directors believe there are opportunities for capital gain. The Company continues to keep its portfolio under review. The Company's strategy with its quoted portfolio is to gain exposure in projects that have the potential to create short to medium term returns for the Company as well as diversify the Company's exposure to a broader range of commodities while being able to enter and exit the position with minimal cost and time.


The Company is committed to sustainable development and conducting its business ethically. Given that the Company invests in the mining industry, one of its key focuses is on maintaining a high level of health and safety, environmental responsibility, and support for the communities close to its investments.


Principal Risks and Uncertainties

There are known risks associated with the mineral industry, especially in Africa. The Board regularly reviews the risks to which the Group is exposed and endeavours to minimise them as far as possible. The following summary, which is not exhaustive, outlines some of the risks and uncertainties currently facing the Group:

·    Although reducing throughout the year under review, COVID-19 continues to have risks for the Group in terms of its ability to travel to and from its projects and ability for key personnel to access its projects.  As previously reported, the impact of COVID-19 on the project is so far minimal as the Company's site activities were substantially completed in 2019.

·    Through the Mahenge Liandu Graphite Project the Group is very exposed to graphite. Graphite is a relatively new commodity whose market is being driven by demand in renewable energy. The Company believes it is thus vulnerable to changing global energy policies.

·    The impact of Brexit on companies operating in the UK is still being monitored. Thus far Brexit has not impacted the Group's ability to raise funds.

·    The exploration for and development of mineral resources involves technical risks, infrastructure risks and logistical challenges, which even a combination of careful evaluation and knowledge may not eliminate.

·    There can be no assurance that the Group's project will be fully developed in accordance with current plans.

·    Future development work and subsequent financial returns arising may be adversely affected by factors outside the control of the Group.

·    The availability and access to future funding within the global economic environment.

·    The Group operates in multiple national jurisdictions and is therefore vulnerable to changes in government policies which are outside its control. The mining regulation changes in Tanzania are still being evaluated, however they seem to have minimal impact on investment in graphite mining. The Group continues to monitor the implementation of the changes to evaluate and mitigate sovereign risks.

Principal Risks and Uncertainties

·    The Group is exposed to gold as the holder of a royalty on gold production from its previously held gold project. The Group's potential future royalty stream will be affected by fluctuations in the prevailing market price of gold and to variations of the US dollar in which gold sales will be denominated.

Some of the mitigation strategies the Group applies in its present stage of development include, among others:

·    Proactive management to reducing fixed costs.

·    Rationalisation of all capital expenditures.

·    Maintaining strong relationships with government (employing local staff and partial government ownership), which improves the Group's position as a preferred small mining partner.

·    Engagement with local communities to ensure our activities provide value to the communities where we operate.

·    Alternative and continued funding activities with a number of options to secure future funding to continue as a going concern.

The Directors regularly monitor such risks and will take actions as appropriate to mitigate them. The Group manages its risks by seeking to ensure that it complies with the terms of its agreements, and through the application of appropriate policies and procedures, and via the recruitment and retention of a team of skilled and experienced professionals.

Key Performance Indicators

The Group's current key performance indicators ('KPIs') are the performance of its underlying investments, measured in terms of the development of the specific projects they relate to, the increase in capital value since investment and the earnings generated for the Group from the investment. The Directors consider that it is still too early in the investment cycle of any of the investments held, for meaningful KPIs to be given.

Success is also measured through the identification and investment in suitable additional opportunities that fit the Group's investment objectives.

Section 172 Statement

Section 172(1): A director of a company must act in the way he considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to -

Section 172(1) (b) the interests of the company's employees,

Company's Comment: While the Company is largely staffed by contractor employees (rather than direct employees of the Company), the directors consider that continuing active work on the Mahenge Liandu Graphite Project to be in the best interest of such staff to utilise their skills and develop their local communities. The board seeks regular feedback from its key stakeholders (including staff and advisers) to ensure that the corporate culture of the Company remains highly ethical in terms of our Company's values and behaviours.

Section 172(1) (c) the need to foster the company's business relationships with suppliers, customers and others,

Company's Comment: The directors ensure that suppliers are available and meeting commitments and there is good communication with staff as a key requirement for high levels of engagement. This is done by periodic and ad-hoc briefings and discussions.

Reasons to engage shareholders are to meet regulatory requirements and understand shareholder sentiments on the business, its prospects and performance of management.

This is done by regulatory news releases, keeping the investor relations section of the website up to date, annual and half-year reports and presentations and AGM.

Section 172(1) (d) the impact of the company's operations on the community and the environment,

Company's Comment: The Company's activities impact communities in the places where we operate and elsewhere. The Company engages communities with employment / business development arrangements within guidelines. Through preparation and compliance with environmental and social management plans, which include the regulatory requirements for the Company on its Mahenge Liandu Graphite Project, the directors ensure that wherever possible its activities have a positive impact on the community and avoid adverse environmental impacts.

The Company has engaged the services of a local manager in Liandu who provides information to the community about our intended project activities and is responsible for managing local affairs and feedback to the Company.

Section 172(1) (e) the desirability of the company maintaining a reputation for high standards of business conduct, and

Company's Comment: The directors consider standards of business conduct in all dealings of the Company. The members of the board have a collective responsibility and obligation to promote the interests of the Company and are collectively responsible for defining standards of business conduct which includes corporate governance arrangements. The board provides strategic leadership for the Company and operates within the scope of our corporate governance framework and sets the strategic goals for the Company.

Section 172(1) (f) the need to act fairly as between members of the company.

Company's Comment: The board takes feedback from a wide range of shareholders (large and small) and endeavours at every opportunity to pro-actively engage with all shareholders (via regular news reporting-RNS) and engage with any specific shareholders in response to particular queries they may have from time to time. The board considers that its key decisions during the year have impacted equally on all members of the Company.


There were no changes in the Board during the year under review or post period end.  The Board continues to consider potential replacements for former Board members with a focus on a potential appointment of a UK based Board member.

Financial Results

For the year ended 31 December 2022 the Group did not earn any revenues as its business related solely to the making of investments in non-revenue producing resource projects and companies.

The Group made a loss after tax of £0.206 million (2021: £0.333 million) for the year ended 31 December 2022.  Expenditure on the Mahenge Liandu project during the year amounted to £0.468 million (2021: £0.272 million), which was capitalised as additional exploration and evaluation assets.

Funds raised during the year amounted to £1.3 million from the exercise of warrants and options.

At 31 December 2022, the Group had cash of £1,046,000 (2021: £886,000) and nil debt finance (2020: nil).  At 4 May 2023 the Group had cash of £737,000 and listed investments worth £1,245,000.


The year under review shows that Mahenge Liandu continues to represent an exciting opportunity for the Group. As identified in the going concern note to the Directors' Report, the Company's ability to achieve its strategy with respect to the project is dependent on the further fundraising.  The Directors continue to keep other investment opportunities, in line with the Group's investment objectives, under review, which the board believe could deliver significant value to shareholders.

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