Armadale Capital provided a project financing update on Monday and reported that they were making significant progress with financing discussions, post delivery of their DFS on their world class Mahenge Liandu high purity graphite project.
Given the incredibly low Capex of $39m the company have lots of options on the table and reading the RNS this could be as follows:

It looks like Armadale are looking to secure a project partner who would either take a project or equity-level stake or perhaps a mixture of both.
The company to date have certainly been keen to limit dilution so we could see a project-level deal materialise in return for a significant Capital investment.
Depending on the size of the stake this could be for all or a portion of the Capex. I’ve said in recent articles, I believe given the returns of the project a Capital investment by a partner would be very attractive.
The company have signalled a partner may take the form of a Private Equity mining specialist and/or an EPCM (Engineering Procurement and Construction) partner.
Due diligence is progressing well so investors may not have long to wait for a further announcement that would put Armadale well on track to commence construction 2021
The full Capex package however may ultimately be a mix of project-level, equity and debt financing. Given the Capex pay-back of less than 2 years, a reasonable chunk of debt would be in investors interests and any potential debt financiers also, given the high return and short payback period.
In fact in the same update, the company have said that they are advancing separate discussions with ‘a number’ of Asian parties with regard to development funding, this I’d infer means a possible debt component and have signalled investors can expect a further update on this in the near future.
This is very encouraging news from the company and clearly their low cost, low Capex, high grade and high purity graphite project has attracted a lot of attention. This is also further evidenced by neighbouring Blackrock Mining who also sit within the Mahenge province announcing last week that they’d agreed an alliance with POSCO for an initial $10m investment in their graphite project.
POSCO is one of the world’s largest producers of anode feedstock and a major participant in the global lithium-ion battery (LiB) industry. Those with an eye on graphite will see this as a major endorsement of the quality of Mahenge graphite and being very high purity, its suitability to the EV battery-sector.
Clearly the company are moving at pace now which is what I like to see and further news on any of the financing elements could drop anytime, along with news on other work streams including conversion of off-take MOU’s to binding agreements, final permitting and construction ramp up.
Remarkably, with all the progress to date the company still sits at a lower market cap than peers and at less than 5% of its project NPV. I dont expect this to be the case for long personally despite a recent up-lift in share price.
Read my full in-depth research note on Armadale here