Armadale Capital Mahenge Liandu Graphite Project

High Grade Coarse Flake Graphite Project in Tanzania

Armadale has signed a heads of terms agreement to acquire the Mahenge Liandu Graphite Project (‘Liandu’) in south-east Tanzania.  This acquisition will provide the Company with access to a highly prospective market, with strong demand fundamentals; global demand for commercial graphite is expected to double within the next eight years.  This growth rate is fuelled by developments in the energy storage industry as graphite is a raw material in lithium-ion batteries, making it a key material in smart phones, tablets, laptops and electric cars.

Liandu is located in a highly prospective region with proven coarse flake, high grade graphite resources – ASX listed Kibaran Resources Ltd (ASX:KNL) and Black Rock Mining Limited (ASX:BKT) have both identified and are developing significant proven and valuable graphite projects immediately adjacent to Liandu.  A mineralised trend about 1.6 km in strike length and up to 500m wide has been identified at the project, which remains open at depth, and exploration drilling completed in December 2015 has further confirmed the mineral potential of the licence area, with results including 10m at 6.54% Total Graphite Content (‘TGC’), 24m at 12.9% TGC and 5m at 21.5% TGC.  Armadale is targeting a Maiden Resource estimation in late 2016.

Location

The Liandu Project is located in the Ulanga District in south-east Tanzania approximately 300km south west of Morogoro, and 10km from the town Mahenge (Figure 1 Location Map).  The area is highly prospective for graphite with the Liandu project located immediately to the east of Kibaran Resources (ASX:KLN) (‘Kibaran’) Epanko Project, which has a Proven and Probable Ore Reserve of 10.9 Mt at 8.6% TGC.  Black Rock Mining (ASX:BKT) (‘Black Rock’) Mahenge Project is also situated just 1km north-west of the Liandu Project and has a global resource of 131Mt at 7.9% TGC (including 38Mt at 10.2% TGC or 16.6 Mt at 11.1% TGC).

Liandu is located close to infrastructure with only 72 km of unsealed road from Ifakara to Mahenge and 76 km from the railway line to Dar es Salaam Port, the major East African Port.

The Liandu Project comprises a 29.9 square km ground package, which includes a granted prospecting licence (PL10969/2016) and a prospecting licence in application (App02788) that is in the process of being approved.

Exploration History

To date approximately AUS$400,000 has been spent by Graphite Advancement Tanzania Pty Ltd (‘GAT’), the current holders of the licence, on exploring the Project since 2015.  Reconnaissance mapping by GAT in November 2015 defined a mineralised trend about 1.6 km in strike length and up to 500m wide. A total of 28 rock chip samples were collected from outcrops, with visual estimates of medium-coarse flake graphite ranging from 10-15%.  Structural measurements suggested steep dipping, N-S trending mineralisation in the south, and shallow dipping NE-SW trending mineralisation as you move to the north.  Seven of the rock chip samples collected were submitted to ALS Laboratory in Mwanza for assaying.  All were mineralised ranging from 12.8 – 24% TGC confirming mineralisation is present on the southern trend (N-S), and the northern trend (NE-SW).

A small drilling programme was completed in December 2015 to test mineralisation and three holes (LDRC001-003) for 138m were completed.  They were all drilled in the southern area with best results coming from section longitude -8o 44′ 06″.  10m@6.54% TGC was encountered in LDRC0002 & 24m@12.9% TGC plus 5m@21.5% TGC was encountered in LDRC0003.

Next Steps 

Armadale and GAT are currently completing mutual due diligence.  Once completed the parties anticipate entering in to a sale & purchase agreement that will lead to Armadale acquiring the entire issued share capital of GAT for an issue of 80 million Armadale Shares.

Armadale’s geologists are currently finalising a proposed work programme with the aim of delineating a JORC resource at the Liandu Project and demonstrating the quality of the graphite in late 2016.  The programme will include a combination of detailed mapping and drilling.

The Graphite Market

The global demand for commercial graphite is growing and is expected to double within the next eight years.  This growth profile is being driven by the increasing number of applications for graphite in technology and industry. The material has applications in electronics, nuclear reactors, manufacturing, aircraft and automotive production and, perhaps most significantly, in developing new energy markets.

Importantly, graphite is an essential component of the modern lithium-ion battery, making it a key material in smart phones, tablets, laptops and electric cars.  Benchmark Mineral Intelligence is forecasting that the market where graphite is used as the anode in lithuim-ion batteries is set to increase from 80,000 tpa in 2015 to at least 250,000 tpa by the end of 2020.

Graphite is a highly valuable commodity and its unique physical and chemical properties make it difficult to substitute.

A presentation providing further information of the Liandu Project and graphite market is available to view – please click below

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