FYI-Posted on Graphite Board

For any of you out there who have been lucky enough to follow Asimwe Kabunga and his graphite plays over the past year or so – think VRC, STA, BKT – you should’ve done pretty well for yourselves.

Well, he now seemingly has a new vehicle for another graphite play in Tanzania – Armadale Capital Plc (ACP) on the AIM.

Kabunga currently owns 12.7% of the company and it seems as though some of his mates got set in the recent placement at 2p where they raised £800K.

The company has an issued cap of about 250m shares and at 2.2p has a cap of about AUD10m. Compare that to its immediate neighbour in Tanzania and ACP looks pretty damn cheap.

ACP was recently “cleaned up” and is now a nice, clean vehicle. Peter Marks of EMC fame is on the board as is Justin Lewis. Old shareholders hate these two as they were all hit pretty hard during the consolidation and claim that management hasn’t performed. This is very possible, but I don’t have to tell you what a tough few years it has been for resource companies – plenty have ceased to exist. A new non-exec chairman was appointed last week who seems to be pretty well credentialed and connected.

ACP has what seems to be a decent gold project in DRC – Mpokoto; with a 678K oz resource and an estimated capex of USD20m. IMHO, this in itself is worth the current market cap of ACP. However, the graphite is the future.

AIM is not like ASX. The market isn’t as transparent, but perhaps more importantly from an investor’s perspective, not every second stock is a lithium or graphite stock. This means that should management be able to promote properly, graphite investors should flock to ACP. Similarly, initial drill results from the Liandu graphite project look pretty damn exciting. If BKT is capped around AUD50m, there’s no reason ACP can’t be there pretty quick. That would equate to about 10p from the current 2.2p.

So, if you like the graphite space and you believe that Kabunga has the “graphite” touch, I reckon you could do worse than have a squiz at ACP.