The Company is pleased to provide an update on all progress to date since its acquisition of the Orom-Cross Graphite Project in April, and its return to trading on LSE immediately thereafter.
The Company’s Prospectus laid out its intention to fast-track value creation for the Project, by moving Orom-Cross up the development curve as quickly as possible through a combination of drilling and metallurgical studies. The key requirements to fulfil this were identified as follows;
- A substantial diamond drilling programme to deliver enough resource to support an initial mine life of over ten years.
- A maiden JORC Resource for the asset, to provide both the Company and industry participants sufficient confidence with respect to the development of a modest part of Orom-Cross.
- Completion of further metallurgical test work, using samples from this drilling programme to better understand end product from the area considered for initial mining.
- Complete land acquisition and social responsibility programmes to ensure on-the-ground support.
- Develop key relationships in-country to ensure ongoing support and activities moving forward.
- Deliver a first commercial model outlining an initial mining scenario, once all drilling and metallurgical test work has been successfully completed.
Blencowe is pleased to report that a number of these objectives have already been met this year, with the balance expected to be completed by year end. This has been achieved despite the various challenges faced via Covid-19 restrictions in both Uganda and UK.
A 69-hole (1,950m) diamond drill programme was planned, executed and completed, with initial results looking positive. These included the discovery of a new high grade lode of graphite, which was subsequently drilled within the original drilling budget and is expected to boost the overall JORC Resource estimate. The drilling programme also reconfirmed the Company’s belief that the majority of the Orom-Cross deposit contains larger flake size graphite, which commands a significant premium in terms of pricing per tonne.
Logging of core has been completed and samples are in transit to JORC-accredited labs in Tanzania ahead of the delivery of a maiden JORC Resource for Orom-Cross before the end of 2020. Due to the vast size and scale of the asset this initial JORC is expected to be on just 1% of the overall deposit, however, it will represent a key step forward and is expected to provide sufficient resources to deliver the Project into first production with a mine life in excess of ten years.
In parallel to those samples sent to Tanzania, samples will also be sent to Canada for metallurgical testing by the experienced and market leading graphite specialist SGS, who have done similar work for many other graphite projects worldwide. This work will not only reconfirm the data from Tanzania, but also identify what the exact end product (concentrate) at Orom-Cross will look like and the process flow to deliver that. Upon receipt of these findings, Blencowe will be able to look to enter into discussions with potential off-takers and industrial consumers to aid with the financing of the ultimate development.
The Company has continued to engage the local community, including making payments to those impacted, as set out within the terms of the mining license. This support is considered vital to the long term viability of Orom-Cross and Blencowe is pleased to report that these funds have already been utilised for tractors and other equipment necessary to assist local communities in the area to grow their crops. In terms of disruption, both Orom-Cross and surrounding area benefit from limited existing settlement and as a result the requirement for relocations of households is expected to be minimal. However, the Company remains keen to support the regional community and will continue in both its dialogue and direct investment efforts to help boost the development of the region.
Further positive meetings and discussions with senior Government officials have continued, with an underlying tone of support and goodwill. Blencowe is grateful of their ongoing support, which is crucial in terms of long term viability of the Project and its subsequent impact on the local economy.
Significant new cash was raised in London to provide the means to deliver this work programme and an experienced management team is now in place and working hard to continue to deliver on all programmes ahead.
Blencowe is a firm believer that demand for high quality flake graphite will surge in the next decade. This is to be driven by not only the demand in retardants, which require exclusively a larger flake size graphite product (as expected in Orom Cross), but also as the demand for lithium-ion (Li-ion) batteries exponentially increases, to store energy for electric vehicles and other renewable sources. Flake graphite is a key component of the anode within the Li-ion batteries and technical experts suggest that this battery will remain the primary product in this market over the medium and longer terms. Several larger graphite projects worldwide have either ceased or reduced production due to a wide variety of issues, whilst many of the existing deposits and proposed future developments are located in less stable regions across the globe. Accordingly, the Company believe that the graphite market may be in shorter supply in the future than the market is currently considering, whist the location of Orom-Cross in a stable African jurisdiction should make it more desirable to a potential off-takers looking for surety and continuity of supply.
Executive Chairman Cameron Pearce commented;
“This has been a very active and successful quarter since we brought in this excellent project, and recommenced trading on the LSE. This has been achieved against the backdrop of the COVID-19 pandemic and I thank all those working on the Project who have continued to progress Orom-Cross in these truly unprecedented times.”
“The Board have no doubt that Orom-Cross is a world class graphite deposit, given its size and expected grades and flake sizes. We have a clear strategy to move the asset forward as rapidly as possible towards production. The first step to achieving this will be the publication of the maiden JORC Resource later this year, followed by the results of the metallurgical studies. The Company is well-funded to achieve these objectives following this year’s capital raise and I look forward to updating shareholders in due course.”
For further information please contact:
Blencowe Resources Plc
Sam Quinn (London Director)
Tel: +44 (0)1624 681 250
Brandon Hill Capital Limited
Jonathan Evans (Corporate Finance)
Tel: +44 (0)20 3463 5000
Orom-Cross is a potential world class graphite project both by size and end-product quality, with a high component of larger flakes identified from previous work performed. A 21-year Mining Licence was issued by the Ugandan Government in 2019 following extensive historical work on the deposit.
Orom-Cross presents as a large, shallow open pitable deposit, with an estimated resource in excess of 3 billion tonnes of graphite. Development of the resource is expected to benefit from a low strip ratio and free dig operations, thereby ensuring lower operating and capital costs.