Armadale gold mine sees value jump to $55.3m

Caitlin Morrison
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INVESTMENT company Armadale Cap­ital has revealed that its Mpokoto Gold Project in the Democratic Republic of Congo has increased in post-tax value by 68 per cent to $55.3m (£38.4m).

The mine, which was purchased by Armadale in August 2013, was previously valued at $33m in a scoping study carried out in April.

The new value, calculated from an updated study, is based on a discount rate of eight per cent and a gold price of $1,250 per ounce.

The Aim-listed firm, which focuses on natural resource projects in Africa, also stated that the overall mine life had been extended by 80 per cent to nine years.

Armadale expects production to total 231,000 ounces, with an operating cost of less than $650 per ounce.

Justin Lewis, director of Armadale, said the updated study showed how far the Mpokoto Project had developed since it was bought in 2013. He commented: “In an uncertain gold price environment, the combination of being in the bottom quartile of producing African gold mines in terms of operating costs, and a relatively low capital requirement makes Mpokoto a very attractive project, which remains economic even at a gold price as low as $1,000/oz.

“We continue to focus on advancing Mpokoto to the next stage of its development before targeting commercial gold production.”