LONDON (ShareCast) - 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.

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