LONDON (ShareCast) - (Sharecast News) - Natural resources investment company Armadale Capital updated the market on progress on the definitive feasibility study for the Mahenge Liandu Graphite Project on Wednesday, reporting that it was on track to complete in the fourth quarter in 2019.
The AIM-traded firm said it had appointed the Bureau Veritas international laboratory to conduct the metallurgical test work, and support previous work which it said demonstrated "excellent" flake size distribution and "exceptional" purity.

Metallurgical test work for product quality assessment was on schedule for completion in June, and downstream test work results confirming product quality should be completed in July.

Discussions with third parties regarding project financing were still progressing, the board said.

It said it was strengthening the market fundamentals for higher purity, higher quality graphite concentrates.

"I am pleased to confirm that further steps have been made towards the timely completion of the definitive feasibility study, including product quality assessment and metallurgical testing," said Armadale Capital director Nick Johansen.

"Previous test work in this regard demonstrated excellent flake size distribution and exceptional purity and we are optimistic that similar outcomes can be achieved from this latest round of test work.

"Notably, recent graphite market developments point to increasing values being placed on higher purity higher quality graphite concentrates."

As an example, Johansen noted that Black Rock Resources - which owns the neighbouring Mahenge Project - announced binding sales agreements at "materially higher than benchmark" prices for higher purity concentrates and significantly higher than the $1272 per tonne used in Armadale's March 2018 Mahenge Liandu scoping study.

"Should Mahenge Liandu secure higher average price binding sales agreements, based on enhanced product quality, this will positively impact the product fundamentals including net present value and internal rate of return calculations.

"In line with strong market fundamentals, the project is gathering considerable interest.

"Our discussions with third party organisations to date demonstrate a clear interest in providing project level financing, which we anticipate will fall into place in a timely manner, given the completion of our definitive feasibility study schedule for this year."

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