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#BRES Blencowe Resources PLC – Appointment of Leading Engineering Firm to DFS

Highlights

·    Blencowe continues to progress the Orom-Cross project with appointment of a notable engineering firm to manage the Definitive Feasibility Study (“DFS”).

·    Appointment of CPC Engineering (“CPC”) of Perth to lead and develop the DFS for Orom-Cross.

·    CPC have extensive experience in African graphite projects and Blencowe will leverage this knowledge to refine the delivery of the Orom-Cross DFS.

Blencowe Resources Plc (“Blencowe Resources” or the “Company”) (LSE: BRES) is pleased to announce it has engaged leading engineering firm CPC Engineering to lead, deliver and sign off on the DFS for the Orom-Cross Graphite Project.

CPC has extensive experience in other leading graphite projects in East Africa, having completed the DFS for the Maniry Graphite Project (Black Earth Minerals, ASX: BEM) in Madagascar, as well as both the Mahenge (Black Rock Mining Ltd, ASX: BKT) and Chilalo Graphite (Evolution Energy Minerals, ASX: EV1) Projects in Tanzania and the scoping study for the Ancuabe Graphite Project (Triton Minerals, ASX: TON) in Mozambique. CPC also completed the detailed engineering, procurement, construction support and commissioning services for the Syrah Resources (ASX: SYR) Balama Graphite Project in Mozambique.

Blencowe is pleased to have partnered with a firm with extensive experience in both graphite and flotation circuits. CPC will work with the Company and various other Ugandan service providers in the delivery of the DFS for Orom-Cross Graphite in 2023.

The CPC works will include:

·    Optimisation of the process plant design, incorporating results of the various testwork programs from SGS, IMO and the pilot plant works (Jilin/China) along with CPC’s expertise in design and construction of graphite process plants.

·    Provide updated and optimised CAPEX and OPEX for project cost and schedule certainty;

·    Provide updated project costs and schedule for the Project non-processing Infrastructure.

·    Sign off on full DFS once completed to provide the third party approval from a recognised leading technical firm as required to ensure project funding support.

Cameron Pearce, Executive Chairman commented;

We are pleased to add another high-quality partner to the Orom-Cross Project.  CPC has a very impressive track record within the graphite market and we are now able to leverage off their skills, experience and relationships to ensure we deliver a first class DFS.

 

He continued “The graphite market continues to shift in our favour and we expect the supply-demand imbalance to widen further, as demand for graphite accelerates, given its material role within lithium-ion batteries. Orom-Cross has continued to exceed our expectations and we remain focused on delivering a world class project. CPC are recognised as one of the top tier engineering firms within the graphite sector and their sign off on the DFS will not only help optimise the Project, but also provide the credibility required for project funding and market support.” 

 

For further information please contact:

 

 

Blencowe Resources Plc

Sam Quinn

 

www.blencoweresourcesplc.com

Tel: +44 (0)1624 681 250

info@blencoweresourcesplc.com

Investor Relations

Sasha Sethi

Tel: +44 (0) 7891 677 441

sasha@flowcomms.com

 

Tavira Financial 

Jonathan Evans

Tel: +44 (0)20 3192 1733

Jonathan.evans@tavira.group

 

First Equity Limited

Jason Robertson

Tel: +44(0)20 7330 1833

jasonrobertson@firstequitylimited.com

 

Twitter https://twitter.com/BlencoweRes

LinkedIn https://www.linkedin.com/company/72382491/admin/

About CPC Engineering

CPC Engineering is a privately owned, Perth-based engineering company with 50 years’ experience providing reliable and practical engineering solutions to the resources industry, both nationally and internationally. CPC employs over 350 personnel and specialises in engineering design, construction and maintenance.

CPC Project Design is located at CPC Engineering head office in West Perth and is a multidiscipline engineering design, procurement, construction and project management team which has developed a reputation for delivering practical and cost-effective services to the resource industry.

CPC has extensive resource engineering experience with clients that include Syrah Resources, BlackEarth Minerals, Black Rock Mining, Albemarle, First Quantum, AngloGold Ashanti, Tronox Limited OceanaGold, Newmont, Barrick Gold and Sandfire Resources.

Background

Orom-Cross Graphite Project

Orom-Cross is a potential world class graphite project both by size and end-product quality, with a high component of more valuable larger coarse flakes within the deposit.

A 21-year Mining Licence for the Project was issued by the Ugandan Government in 2019 following extensive historical work on the deposit and Blencowe completed a successful Pre-Feasibility Study in 2022.  The Company has now moved into the Definitive Feasibility Study phase as it drives towards first production.

Orom-Cross presents as a large, shallow open-pitable deposit, with a maiden JORC Indicated & Inferred Mineral Resource deposit of 24.5Mt @ 6.0% Total Graphite Content, with only a small percentage of the overall deposit drilled to date. Development of the resource is expected to benefit from a low strip ratio and free dig operations, thereby ensuring lower operating and capital costs.

#BRES Blencowe Resources PLC – Final Metallurgical Testing Programs

Commencement of Final Metallurgical Testing Programs for Orom-Cross Graphite Project as samples sent to both China and USA.

Highlights

·    20kgs of concentrate sent by air to technical experts Wuhan University of Technology (“WUT”) in China to begin final metallurgical test procedure.

·    This concentrate is the end product recently produced by IMO in Perth, which demonstrated high grade and low impurity chemical characteristics.

·    Preliminary testing on the 20kg sample to commence immediately in China ahead of 100-tonnes bulk sample studies, which will be sent to China in the near term.

·    Additional 5kgs of concentrate sent to leading US graphite technical firm American Energy Technologies Co. (“AET Co”) for SPG and expandables testing and to confirm Orom-Cross concentrate further upgrades efficiently to a >99.95% battery grade product.

Blencowe Resources Plc (“Blencowe Resources” or the “Company”) (LSE: BRES) is pleased to announce it has air-freighted 20kgs of concentrate from its Orom-Cross Graphite Project (“Orom-Cross”) to WUT in China, to commence final stage metallurgical testing.  Studies on this 20kgs concentrate, which was recently processed through the IMO test facility in Perth, will further define the characteristics of the Orom-Cross graphite product and is expected to ultimately lead to identifying offtake parties and thereafter signing binding offtake agreements for the sale of graphite concentrate.

WUT specialises in testing final concentrate products and defining their characteristics, in order to fine tune processing options and assess upgradability for use in batteries and other high value end applications. WUT works in close association with Jilin Huiyang New Material Technology Company (“Jilin”) who, as announced on 11 January 2023, are to receive 100 tonnes of raw material from Orom-Cross over the next few months to process through their existing processing facilities.  Blencowe will also send 150kgs of raw material to Jilin by air-freight as a precursor to the main bulk sample.

By sending this 20kgs prior to the 100 tonnes bulk sample Jilin will be able to better understand the properties and chemical characteristics of the Orom-Cross concentrate and will be able to adjust their pilot processing facility accordingly to take in the larger scale raw product when it arrives later. This testing by WUT/Jilin is expected to reconfirm historic results, which have demonstrated the concentrate from Orom-Cross is of a consistently high quality.

Once the 100 tonnes raw material is processed through Jilin’s facility it is anticipated that ~6 tonnes of high quality concentrate will be produced. This will represent a sample scale that is ~600 times larger than the 4Q 2022 IMO testing done in Perth and will confirm a high quality concentrate can be delivered in bulk from the Orom-Cross Project.  This is key to pre-qualification and securing future offtake agreements.

Jilin is also expected to use some of the ~6 tonnes concentrate to conduct spheronised purified graphite (SPG) testing, where the Orom-Cross concentrate is lifted from a 96-97% LOI to a >99.95% end product.  Once this is achieved and the OEM’s complete their own testing then Orom-Cross product may be deemed as pre-qualified and the Company will look to enter into binding offtake agreements for sale of products.

Blencowe is also now sending an additional 5kgs of concentrate to Chicago-based graphite specialist AET Co, which is a recognised industry expert in SPG and expandability testing.  AET Co has been directly involved in the upgrading of graphite concentrates for over a decade and is generally accepted as one of the leading technical specialists in graphite worldwide.  Blencowe will have a parallel test process occurring to ensure that it ultimately achieves the best possible outcome for upgrading concentrate to the >99.95% SPG product.  The AET Co testing is expected to take around 3 months to complete, after which Blencowe will know its end product has been tested all the way through to (lithium-ion) battery grade product.  Testing will also be done on the coarse flake products to ensure they are suitable for expandability, which will ultimately lead to offtake contracts for this higher-value product class also.

As lithium-ion batteries are expected to be the single most important demand pull for graphite ahead, completing QAQC to become certified as battery grade will be a significant milestone. Blencowe is confident its concentrate will successfully be highlighted as a low cost and pure SPG product once these tests have been completed, thereby commanding the best pricing.

 

Cameron Pearce, Executive Chairman commented;

We are now moving into the final stage of the Orom-Cross metallurgical work within the Definitive Feasibility Study, where our high quality 96-97% LOI concentrate will be upgraded to a more purified >99.95% product.  Beyond that there is only testing as required from the OEMs themselves to verify all data and if successful thereafter we can move to offtake agreements.  We are confident that our Orom-Cross concentrate will be verified ahead as a high-quality end-product and look forward to sharing the results of all of these tests once they are completed.

 

He added “Graphite demand is lifting fast and we believe it will continue to do so ahead.  The higher the quality of the end product the more likely we can lock in sales agreements and the better the prices we will achieve.  We expect graphite demand to continue to rise and shortages to unfold as there are only a limited number of new graphite projects with suitable, qualified end product moving into production over the medium term, and most resource analysts are forecasting a substantial deficit from 2025 which they predict will become even more pronounced by the end of the decade.”

 

For further information please contact:

 

 

Blencowe Resources Plc

Sam Quinn

 

www.blencoweresourcesplc.com

Tel: +44 (0)1624 681 250

info@blencoweresourcesplc.com

Investor Relations

Sasha Sethi

Tel: +44 (0) 7891 677 441

sasha@flowcomms.com

 

Tavira Financial 

Jonathan Evans

Tel: +44 (0)20 3192 1733

Jonathan.evans@tavira.group

 

First Equity Limited

Jason Robertson

Tel: +44(0)20 7330 1833

jasonrobertson@firstequitylimited.com

 

Twitter https://twitter.com/BlencoweRes

LinkedIn https://www.linkedin.com/company/72382491/admin/

Background

Orom-Cross Graphite Project

Orom-Cross is a potential world class graphite project both by size and end-product quality, with a high component of more valuable larger coarse flakes within the deposit.

A 21-year Mining Licence for the Project was issued by the Ugandan Government in 2019 following extensive historical work on the deposit and Blencowe completed a successful Pre-Feasibility Study in 2022.  The Company has now moved into the Definitive Feasibility Study phase as it drives towards first production.

Orom-Cross presents as a large, shallow open-pitable deposit, with a maiden JORC Indicated & Inferred Mineral Resource deposit of 24.5Mt @ 6.0% Total Graphite Content, with only a small percentage of the overall deposit drilled to date. Development of the resource is expected to benefit from a low strip ratio and free dig operations, thereby ensuring lower operating and capital costs.

#BRES Blencowe Resources Plc – Annual Results 30 September 2022 & Notice of AGM

Blencowe Resources Plc, (“Blencowe Resources” or the “Company”) (LSE: BRES) is pleased to announce its audited financial results for the year ended 30 September 2022 (the “Annual Report”) and it’s notice of Annual General Meeting (“Notice of AGM”).

The Annual Report, Notice of AGM and the associated Form of Proxy will be posted to shareholders and copies will also be available on the Company’s website at shortly.

The Annual General Meeting will be held at 55 Athol Street, Douglas, Isle of Man at 10.00a.m. on 15 February 2023.

For further information, please contact: 

Blencowe Resources

Sam Quinn

 

www.blencoweresourcesplc.com

Tel: +44 (0) 1624 681 250

info@blencoweresourcesplc.com

 

Investor Enquiries

Sasha Sethi

Tel: +44 (0) 7891 677 441

sasha@flowcomms.com

 

Tavira Securities Limited

Jonathan Evans

Tel: +44 (0)20 7100 5100

jonathan.evans@tavirasecurities.com

 

First Equity Limited

Jason Robertson

Tel: +44 (0)203 192 1733

jasonrobertson@firstequitylimited.com

Chief Executive Officer’s Statement for the period ended 30 September 2022 

Shareholders and Stakeholders,

Upon reflection these past 12 months have been one of the most challenging ever in terms of macro-market forces, particularly relating to our London listing, with Brexit fallout, Ukraine invasion, rising inflation and subsequent interest raises to counter these, and a choppy political landscape with no less than two UK Prime Ministers in Number 10 during the reporting period, all to deal with.  This is before we manage our own internal project.

Nevertheless, it has proven to me once again that the Board and Executive Management of Blencowe are a very resourceful team, together with our key supporters, and we jointly have considerable experience dealing with all manner of challenges relating to resources development over many years, so none of this was going to get in our way and prevent the continued advancement of Orom-Cross, which is fast turning into a world class graphite project.  I would like to thank the full team for everything they have contributed over this period to ensure that we remain on-track to deliver a unique and special mining operation ahead.

The Company completed a second diamond drill programme in 2021 which resulted in a JORC Mineral Resource upgrade in 1H 2022 up to 24.5Mt of graphite at a 6.0% in situ average grade.  It must be noted that this JORC Resource has resulted from exploration on circa 1-2% of the estimated overall Orom-Cross deposit which illustrates how much graphite there is at site, and the incredible upside potential that exists to extend both mine life and production volumes in the years ahead.

Further excellent metallurgical test work by SGS in Canada resulted in proving Orom-Cross can upgrade to a very pure concentrate around 96-97% LOI from the composite mix of the two deposits (Northern Syncline and Camp Lode) and equally importantly with high recoveries and low impurities.  These will assist greatly in taking the end product through final testing ahead to the 99.95% SPG (spherical purified graphite) product that is used in the production of lithium-ion batteries, which is by far the largest demand accelerator for graphite use ahead.  To prove Orom-Cross can deliver a high grade end product is key to getting pre-qualification for sales and ultimately delivering binding offtake agreements within the Definitive Feasibility Study (DFS) in 2023.  These test results also proved that our end product retains a high percentage of coarse (large) flakes that sell for significantly more than the smaller flakes, and which will help us deliver a higher weighted average selling price for the full basket of end products.  In the words of one of our key marketing consultants who has been closely involved in graphite for over 30 years, Orom-Cross displays one of the best concentrates he has ever seen, and thus should be well received by end users as we move to showcase our products in 2023.

The 24.5Mt JORC Resource underpinned a successful Pre-Feasibility Study (PFS) conducted over 1H 2022, which delivered exceptional results from an initial 14 year life of mine.  As noted above this LOM can and will be greatly extended in the future with additional drilling, when required.  Some of the highlights of this PFS included low overall operating costs (US$499/t FOB port), high weighted average selling price (US$1,307/t) and from these very healthy margins which delivered an NPV8 of US$482M and an IRR8 of 49%.  The initial capital requirement for all plant and infrastructure to deliver this was reduced (from PEA/2021: US$80M) to US$62M which makes the start-up proposition more feasible. Nothing was highlighted within the PFS that might derail this project and as such the Company moved into the next and final studies phase, the Definitive Feasibility Study.

The DFS was initially going to include a pilot plant at site, which could start-up graphite operations on a smaller scale and provide product for end user screening, to ultimately become pre-qualified for more substantial sales contracts later on.  However, Blencowe more recently uncovered sources who had successfully bulk sample tested other graphite projects in existing pilot plant facilities in China, with resultant binding contracts once fully completed.  As China currently represents around 95% of the end market for graphite sales it is believed that pre-qualification into China is sensible, and as such Blencowe has decided to trial a bulk sample of 100 tonnes Orom-Cross raw material through this same facility.  This will form a key part of the DFS program in 2023 and will be followed by SPG testing, and ultimately OEM (original equipment manufacturers) testing.  These are the necessary steps to provide the basis for full sales contracts and work is already underway to deliver these bulk samples to start the process.  It is also expected that Blencowe will lock in an EPC contractor within the DFS process, and all study work will be managed and ultimately peer reviewed using the leading graphite technical specialist engineering firm based in Perth, Australia

The other key aspect of the DFS is project funding, and Blencowe has been working through various options to secure an effective and efficient funding solution for both the DFS and the full project implementation.  The Company will provide further updates to the market on this as it eventuates.

Finally, the world is changing fast and within this moving landscape is an increased awareness in ESG (environmental, social and governance) aspects.  These are becoming very important as everyone from potential investors to funding partners to end users all require a life cycle sustainable project with an end product that can meet specific standards.  Blencowe has many advantages in this regard, including use of green (hydro) energy, solid community agreements and most importantly an awareness of the need to constantly evolve in this key area.  An initial ESG review has already been conducted in 2022 using a leading international firm and sustainability will play a big role in the future development of Orom-Cross.

All the work delivered over this year has transformed Orom-Cross from an early stage exploration project to an advanced pre-production powerhouse.  In the wider context this is important as the global shift away from fossil fuels towards renewable energy provides a huge opportunity ahead for Orom-Cross, and Blencowe wants to position this exceptional project at the forefront of its peers in all aspects.  As demand for lithium-ion batteries accelerates over the next decade and hundreds of gigafactories that will manufacture these batteries open their doors and begin demanding huge volumes of input materials, the forecast demand for flake graphite is anticipated to grow exponentially.

Blencowe is moving quickly to establish itself as the proud owner of one of the largest, highest quality, low cost flake graphite projects in the world.  The future is therefore very exciting.

Mike Ralston

Chief Executive office

Strategic Report

The Directors present the Strategic Report for the year ended 30 September 2022.

Results

The results are set out in the Consolidated Statements of Comprehensive Income. The total comprehensive loss attributable to the equity holders of the Group for the period was £1,089,679 (2021: £691,064).

The Group paid no distribution or dividends during the period.

Business model, review of the business and future developments

The Group’ principal activity is the exploration of Orom Cross Graphite Project in Northern Uganda, which it owns through its 100% subsidiary Blencowe Resources Uganda Limited.

On 22 February 2022 the Group entered into an agreement with SIPA Exploration Uganda Ltd to acquire a Nickel Sulphide Project in Uganda (Akelikongo). The company was to acquire a 100% of the project through an earn-in over four separate milestones. The earn in investment required the company to spend US$2.75million over a period of 3 years to acquire a 100% of the project.

On 6 September 2022 the Company announced that it had terminated the agreement with SIPA Exploration Uganda Ltd with respect to the Nickel project and it was no longer required to meet any of the spend obligations. A total amount of £404,533 had been spent and capitalised with respect to the Akelikongo project and this was fully impaired to the profit and loss during the year.

The Group’s aim is to create value for shareholders through the discovery and development of economic mineral deposits.  The Group’s strategy is to continue to progress the development of its existing project in Uganda and to evaluate its existing and new mineral resource opportunities.

The Group’s business is directed by the Board and is managed on a day-to-day basis by the Executive Chairman, Cameron Pearce.  The Board monitors compliance with objectives and policies of the Group through performance reporting, budget updates and periodic operational reviews.

Key performance indicators (KPIs)

Financial KPIs

Results for the year

With no income in the year the Group continues to monitor the loss before tax to ensure the continued viability of the Group and ability to continue to develop the Orom-Cross Graphite Project. The Group has made a loss before tax of £1,085,474 for the year ended 30 September 2022 (2021: loss before tax of £694,726).

Exploration expenditure – funding and development costs

At this stage in the Group’s development, the Group is focusing on financing and continued development of the Orom-Cross Graphite Project. Therefore, the funding and development costs of Orom-Cross Graphite project have been chosen as Key Performance Indicators.

The Group incurred £1,423,236 (2021: £976,084) of capitalised exploration costs, of which £1,018,703 related to Orom Cross Graphite Project which were required to carry out the initial drilling costs and testing of the mineral, and £404,533 relating to the Akelikongo project. The costs relating to Akelikongo were subsequently impaired and released to the statement of comprehensive income. These exploration costs are in line with the Board expectations.

In 2022 the Group raised funds of £2,628,748 (2021: £1,373,414) net of issue costs from the equity markets.  Please see note 20 for further details of the funds raised after the year end.

At 30 September 2022 the Group had a cash balance of £346,994 (2021: £93,288).

Employees

There were two employees during the year apart from the directors, the Chief Executive Officer (“CEO”) and the Chief Operating Officer (“COO”), who are the key management personnel. All current members of the Board and the key management personnel are males. For more information about the Group’s key management personnel see note 7.

Social, Community and Human Rights Issues

The Orom-Cross Graphite Project is still at an early stage of project development and further consideration will need to be given to social, community and human rights issues affecting the Project. Currently a key consideration is that under Ugandan law the Company is required to rehabilitate the area affected by the mining activities. Accordingly, there will be a potential cost associated with undertaking this obligation. At this time, although the Group continues to explore and test the minerals, the land has not been affected and therefore the Group has not accounted for any costs associated with the rehabilitation of the area.

On 10 September 2022 BRUL signed a revised agreement with the local communal land association of Locomo village for the land surface rights and has agreed to help provide local education and sensitization of the local communities in Akurumo parish on the opportunities and advantages of mining graphite. BRUL will give employment priorities to the local capable members of Akurumo parish

Since the acquisition of BRUL the Group has donated to local causes, such as a scholarship programme and to fight against COVID-19. The Group will continue to donate to the local communities around the region of Uganda in which the Project Licences are located.

Principal risks and uncertainties and risk management

The Group operates in an uncertain environment and is subject to a number of risk factors. The Directors have carried out a robust assessment on the principal risks facing the Group, including those that threaten its business model, future performance, solvency or liquidity. 

The Group continues to monitor the principal risks and uncertainties with the help of specialists to ensure that any emerging risk are identified, managed and mitigated. There has been no significant impact to the Group from Covid-19 or from the Russia-Ukraine conflict.

Geological risks

On 19 July 2022, the Group completed the pre- feasibility study for the Orom-Cross graphite project and a net present value (post tax) assessment of $482million has been estimated from the project. The pre-feasibility study indicates a robust, long-term, and profitable mining operation at Orom-Cross. The Pre-feasibility study was managed by leading graphite technical experts Battery Limits Pty Limited (Australia), who have delivered several other graphite project feasibility study in the past. The estimated production per annum will be 36,000tpa as 96-97% end products and increasing this to 147,000tpa in stages. It is estimated that 50% of the product is +100 to +50 mesh fractions.  The pre-feasibility study estimated a US$1,307/t weighted average selling price for a basket of end products and US$499/t operating costs, underlining one of the lowest cost graphite projects worldwide.  On 26 September 2022 the Group announced that it had commenced the definitive feasibility study with completion date 2H-2023.

The Group uses advisors with specialist knowledge in mining and related environmental management for reducing the impacts of environmental risk.

Government regulation and political risk

The Group’s operating activities are subject to laws and regulations governing expropriation of property, health and worker safety, employment standards, waste disposal, protection of the environment, mine development, land and water use, prospecting, mineral production, exports, taxes, labour standards, occupational health standards, toxic wastes, the protection of endangered and protected species and other matters.

While the Group believes that it is in substantial compliance with all material current laws and regulations affecting its activities, future changes in applicable laws, regulations, agreements or changes in their enforcement or regulatory interpretation could result in changes in legal requirements or in the terms of existing permits and agreements applicable to the Group or its properties, which could have a material adverse impact on the Group’s current operations or planned exploration and development projects. Where required, obtaining necessary permits and licences can be a complex, time consuming process and the Group cannot assure whether any necessary permits will be obtainable on acceptable terms, in a timely manner or at all. The costs and delays associated with obtaining necessary permits and complying with these permits and applicable laws and regulations could stop or materially delay or restrict the Group from proceeding with any future exploration or development of its properties. Any failure to comply with applicable laws and regulations or permits, even if inadvertent, could result in interruption or closure of exploration, development or mining operations or material fines, penalties or other liabilities.

The Orom-Cross Graphite Project is located in Uganda. The Group’s activities may be affected in varying degrees by political stability and governmental regulations. Any changes in regulations or shifts in political attitudes in the country or any other countries in which the Group may operate are beyond the control of the Group and may adversely affect its operations. To mitigate this risk, the Board continues to review any changes on the government regulations and the political stability in Uganda.

Pricing risk

The development and success of any project of the Group will be primarily dependent on the future prices of graphite. The graphite prices are subject to significant fluctuation and are affected by a number of factors which are beyond the control of the Company. Such factors include, but are not limited to exchange rates, fluctuations in the value of the United States dollar and foreign currencies, global and regional supply and demand, and political and economic conditions. The price of graphite and other commodities have fluctuated widely in recent years, and future price declines could cause any future development of and commercial production from the Group’s property to be impracticable. Although the Group will have sufficient working capital for the Working Capital Period, depending on the price of graphite, projected cash flow from planned mining operations may not be sufficient for future operations and the Group could be forced to discontinue any further development and may lose its interest in, or may be forced to sell, some or all of its properties. Future production from the Orom-Cross Graphite Project is dependent on the production of graphite that is adequate to make the project economically viable. The Board regularly monitors the prices of graphite and is prepared to raise further capital if it is required.

Commodity and currency risk

As the Company’s potential earnings will be largely derived from the sale of graphite, the Company’s future revenues and cash flows will be impacted by changes in the prices and available market of this commodity. Any substantial decline in the price of graphite or in transport or distribution costs may have a material adverse effect on the Company.

Commodity prices fluctuate and are affected by numerous factors beyond the control of the Company. These factors include current and expected future supply and demand, forward selling by producers, production cost levels in major mineral producing centers as well as macroeconomic conditions such as inflation and interest rates.

Furthermore, the international prices of most commodities are denominated in United States dollars while the Company cost base will be in Pounds Sterling and Ugandan Shilling. Consequently, changes in the Pound Sterling and Ugandan Shilling exchange rates will impact on the earnings of the Company. The exchange rates are affected by numerous factors beyond the control of the Company, including international markets, interest rates, inflation and the general economic outlook.  The Directors are confident that they have put in place a strong management team capable of dealing with the above issues as they arise.

Financing

As of October 2022, the Group has been able to raise £750,000, which will support the Group’s financial position in the short term. The Group is likely to remain cash flow negative for some time and, although the Directors have confidence in the future revenue earning potential of the Group from its interests in the Orom-Cross Graphite Project, there can be no certainty that the Group will achieve or sustain profitability or positive cash flow from its operating activities. With regards to future capital expenditure on the Orom-Cross Graphite Project, the Company may need to raise additional capital beyond the Working Capital Period to fund additional exploration work for the future development of the Orom-Cross Graphite Project.

The Group has been approached by potential strategic partners who may eventually provide an offtake, funding or development scenario for the Orom-Cross graphite project. If this is not successful, the Board may consider stopping the project until further cash can be generated.

Future mineral prices, revenues, taxes, capital expenditures and operating expenses and geological success will all be factors which will have an impact on the amount of additional capital required. Additionally, if the Group acquires further exploration assets or is granted additional permits and/or exploration licences, this may increase its financial commitments in respect of the Group’s exploration activities.

In common with many exploration entities, the Group will need to raise further funds in order to progress the Group from pre-construction phase of its business and eventually into production of revenues.

Environmental and safety

The Orom-Cross Graphite Project is still at an early stage of project development and further consideration will need to be given to environmental and social issues affecting the Orom-Cross Graphite Project. Environmental and safety legislation (e.g. in relation to reclamation, disposal of waste products, protection of wildlife and otherwise relating to environmental protection) may change in a manner that may require stricter or additional standards than those now in effect, a heightened degree of responsibility for companies and their directors and employees and more stringent enforcement of existing laws and regulations. There may also be unforeseen environmental liabilities resulting from both future and historic exploration or mining activities, which may be costly to remedy. Risks may include on-site sources of environmental contamination such as oil and fuel from the mining equipment and rehabilitation of the site upon expiry of the Project Licences. Under Ugandan law the Company is required to rehabilitate the area affected by the mining activities, accordingly there will be a potential cost associated with undertaking this obligation. It is currently unknown what this could be but the funding of this could have a material impact on the Group’s financial position in the future.

If the Group is unable to fully remedy an environmental problem, it may be required to stop or suspend operations or enter into interim compliance measures pending completion of the required remedy. The potential exposure may be significant and could have a material adverse effect on the Group.

The Group has not purchased insurance for environmental risks (including potential liability for pollution or other hazards as a result of the disposal of waste products occurring from exploration and production) as it is not generally available at a price which the Group regards as reasonable.

Environmental management systems are in place to mitigate environmental hazard risks. The Group uses advisors with specialist knowledge in mining and related environmental management for reducing the impacts of environmental risk.

 

Section 172 Statement

 

The Board believes they have acted in a way most likely to promote the success of the Group for the benefit of its members as a whole, as required by section 172.

The requirements of section 172 are or the Board to:

·      consider the likely consequences of any decision in the long term,

·      act fairly between the members of the Group,

·      maintain a reputation for high standards of business conduct,

·      consider the interest of the Group’s employees,

·      foster the Group’s relationship with suppliers, customers and others, and

·    consider the impact of the Group’s operations on the community and the environment.

The Group operates a mineral exploration business, which is inherently speculative in nature and, without regular income, is dependent upon fund-raising for its continued operation.  The pre-revenue nature of the business is important to the understanding of the Group by its members, employees and suppliers, and the Directors are as transparent about the cash position and funding requirements as is allowed under LES regulations.

The principal decisions taken by the Board during the year relate to the ongoing research and development of the Orom-Cross Graphite Project, which since its acquisition in 2020 is still at an early stage of project development. The Board has looked to build upon the information available and the exploration activities carried out by the Subsidiary prior to its acquisition. Through work such as Metallurgical testwork and preliminary economic assessment the board continues to gather information on the long-term viability of the project and the impact on the local community and the environment. The Board have outlined a work program for the future strategy of the Project. In order to carry out its strategy, the company has entered into a number of contracts with providers who are best placed to undertake the necessary research and review.

On 22 February 2022 the Group acquired project Akelikongo which is a Nickel project with SIPA this project was to be acquired in stages. The Board made a decision to terminate the agreement on 6 September 2022 so that they could focus on the Orom project, following the positive results from the pre-feasibility study. The Board believed it was a strategic decision to deliver better shareholder value by focusing its attention on bringing the Orom-graphite project to operation more quickly.

The Board is ultimately responsible for the direction, management, performance and long-term sustainable success of the Group. It sets the Group’s strategy and objective considering the interest of all its stakeholders. A good understanding of the Company’s stakeholders enables the Board to factor the potential impact of strategic decisions on each stakeholder group into a boardroom discussion. By considering the Company’s purpose, vision and values together with its strategic priorities the Board aims to make sure that its decisions are fair. The Board has always, both collectively and individually, taken decisions for the long term and consistently aims to uphold the highest standards of business conduct. Board resolutions are always determined with reference to the interests of the Company’s employees, its business relationships with suppliers and customers. Wherever possible, local communities are engaged in the geological operations and support functions required for field operations providing much needed employment and wider economic benefits to the local communities. In addition, the Group contributes annually towards a scholarship programme for the local community in Uganda. The Board takes seriously its ethical responsibilities to the communities and environment in which it works.  We abide by the local and relevant UK laws on anti-corruption and bribery.

The Group follows international best practice on environmental aspects of our work.

Cameron Pearce

Director
12 January 2023

Link here for the detailed financial statements

UKIM Podcast – CEO Alan Green discusses Sainsburys #SBRY, Barratt Developments #BDEV, Blencowe Resources #BRES and Deltic Energy #DELT

Alan Green joins the Podcast as we run through the numbers of FTSE 100 companies updating investors after the Christmas trading period.

  • Sainsbury’s (LON:SBRY)
  • Barratt Developments (LON:BDEV)
  • Blencowe Resources (LON:BRES)
  • Deltic Energy (LON:DELT)

Sainsbury’s has a record Christmas with like-for-like sales excluding fuel rising 5.9%. However, the pressure from discounter such as Lidl and Aldi continue to be a thorn in the side of their market.

Barratt Developments shares suffered dearly in 2022 as markets priced in lower UK housing prices. We run through their update and question whether a 6-9% reduction in average UK house prices is priced into the FTSE 100’s housebuilders.

We conclude with a look at Blencowe Resources and Deltic Energy.

Listen- https://ukinvestormagazine.co.uk/sainsburys-barratt-developments-and-deltic-energy-with-alan-green/ 

 

 

Blencowe Resources #BRES – Pre-Feasibility Study Results for Orom-Cross

Pre-Feasibility Study (PFS)

Highlights:

 Net Present Value (post-tax) of US$482M, a 52% increase on previously reported Preliminary Economic Assessment (PEA)

 IRR (post-tax) of 49%

 14-year mine life, which can be increased by additional drilling

 US$499/t operating cost (FOB Mombasa port), underlining one of the lowest cost graphite projects worldwide

 US$1,307/t weighted average sales price for basket of end-products

 Initial Capital requirement reduced by 23% from PEA 2021 to US$62M

 US$1.398 billion EBITDA delivered over life of mine, average US$100M EBITDA p.a.

 US$1.073 billion cumulative Net Cash delivered from project over life of mine

 36,000tpa end-products as 96-97% LOI concentrates in year 1, ramping up in stages thereafter to 147,000tpa

 ~50% of end-product in higher value +100 to +50 mesh fractions

 Blencowe to apply for Free Trade Zone License (FTZL) in 2H 2022, which in turn will bring considerable advantages, including a 10-year corporate tax exemption

· Pre-Feasibility Study (PFS) completed on time and under budget

· PFS indicates a robust, long-term, profitable graphite mining operation at Orom-Cross

· PFS managed by leading graphite technical experts Battery Limits Pty Limited (Australia), who have delivered several other leading graphite project feasibility studies in the past

· Scope to expand resource and ramp up production as global markets dictate

· Flake graphite forecast to move into significant supply deficit medium term as increased demand for electric vehicles (EVs) lifts demand for lithium-ion batteries.  Graphite is a non-replaceable input material into lithium-ion batteries

· Blencowe will now move towards Initial Stage production at Orom-Cross by 2H-2023

Blencowe Resources (“Blencowe” or the “Company”) (LSE: BRES) is pleased to announce results of the Pre-Feasibility Study it has been conducting at its flagship Orom-Cross Graphite Project in Uganda.  These results highlight an exceptional long-life project that delivers considerable returns over an initial life of mine period of fourteen years.  In addition, the PFS indicates an initial capital requirement that has been lowered by 23% since the Preliminary Economic Assessment (“PEA”) announced in 2021.

The PFS has been delivered in conjunction with leading graphite technical expert Battery Limits Pty Ltd (“Battery Limits”) who have managed several other leading graphite project feasibility studies worldwide.

 

Executive Chairman of Blencowe, Cameron Pearce commented:

“This PFS represents a major milestone for the Orom-Cross Project and the results are outstanding.  We have considerably outperformed the 2021 Preliminary Economic Assessment in all key areas, whilst also reducing the initial capital requirement by 23% to just US$62M.”

“The Orom-Cross NPV (Net Present Value) of US$482M is excellent, especially in relation to this lower capex, and proves that this is a standout graphite project.  The 14-year long mine life can be extended at any time with additional drilling at Orom-Cross, whilst the concentrate is of high quality with specific element content that is unique and which will elevate market demand for all of the end-products we sell.  Selling graphite is one of the key challenges for a successful operation so this is critical.

As a result of 50% of these end-products being larger flake size categories Orom-Cross has a substantial weighted average selling price for its basket of end-products, yet it also has one of the lowest total operating costs of any graphite project worldwide.  This ensures considerable operating margins over life of mine, which in turn will deliver over US$1 billion free cash to Blencowe as return on investment.

We have adopted a more conservative production profile for both start-up and the ramp-up thereafter to maintain the integrity and viability of delivering new graphite product into the market. We could have chosen to boost the NPV further by expanding production and sales of graphite but we don’t see that as a credible base case. Also, this modest production profile helps delivers a lower initial capital requirement for Blencowe to commission the mine which is another big advantage.

These are tremendous results for our Project and once again highlight the disconnect between the value of Orom-Cross and our current public market valuation. With a current market cap of circa £4M, excluding our nickel project and existing cash, we are trading at approximately 1% of our NPV and at 5% of our expected average annual EBITDA figure. With the PFS now finalised we would expect interest to grow and the inherent value in the Company to be recognised.”

Orom-Cross Graphite Project: Pre-Feasibility Study

The following areas highlight the quality of the project, and provide the basis for Blencowe to move towards Initial Stage production within the next 12-18 months.  Main production is targeted for 2025.

 

Key Performance Indicator

 

 

Comment

Life of Mine

14 years

Can extend at any stage with further drilling

Average tonnes mined pa

1.6Mtpa

Start-up 600ktpa, moving to 2.4Mtpa at year 7

Average tonnes (concentrate) produced pa over life of mine

101,000tpa

Start-up 36ktpa; moving to 147ktpa by year 7

1.41M tonnes over life of mine

Initial Capital Requirement

US$62M

Plant, infrastructure and contingency

Net Present Value ( NPV )

US$482M

8X return on initial capital invested

Internal Rate of Return ( IRR )

50%

Highlights strong rate of return on investment

Weighted Average Selling Price/t – starting position

US$1,307/t

5 different end-products produced, with ~50% in the higher value +100 to +50 mesh fraction sizes

Operating Cost (FOB Mombasa port) – average life of mine

US$499/t

C2 costs, including mining, processing, admin, manpower, logistics, sales and marketing costs

Average EBITDA per annum – life of mine

US$100M

US$1.398Bn total EBITDA earned over life of mine

Free Cash Generated

US$1.073Bn

Net Cash (after tax and royalties) delivered to Company over life of mine

 

1.  Mining and Processing

 

Orom-Cross has an existing JORC Standard Resource of 24.5Mt at 6.0% presenting from surface, which provides for a shallow, low cost, open pit mining operation.  All mining within this first 14 years will be done from 0-25m depth.  Approximately 600,000 tonnes of ore will be mined per annum from commissioning date and this will increase to 2.4Mtpa by the time the project is fully ramped up in year 10.  The existing JORC Resource provides an initial mine life of 14 years and further resources, higher production volumes and an extended mine life can all be obtained at any stage via drilling additional ready-targets. This is however not considered a priority at the moment.

 

Mining will be free-dig with no drill and blast requirement.  Initial ore will come from saprolite (clay) but is expected to move into fresh around 15-20m depth on average.  Both of the deposits identified in the drilling programmes (Northern Syncline and Camp Lode) will be mined and a composite blend of both will be input into the processing plant that will be constructed on-site.

 

An initial 36,000tpa of end-product as concentrates will be delivered from the plant which increments in two additional stages to 147,000tpa once the mine is fully ramped up.  Considerable metallurgical test work has been done on the end-products to determine their chemistry and characteristics and this shows that Orom-Cross can deliver a high quality >96% LOI concentrate that is unique in several key aspects, as highlighted in the June 2022 announcement on final met test results.  Circa 35% of these end-products will be coarse flakes and ~50% will be in the +100 to +50 mesh higher value categories.  The remaining smaller flake products can be sold into the fast-emerging battery market, which is forecast to grow considerably over the long term thus providing a channel for incremental growth and sales.

 

2.  Capital Requirement

 

Blencowe will commence main operations from 2025 at an initial output of 36,000tpa end-product, which is considerably lower than the initial start-up volume as per the PEA (2021). 

 

This is due to guidance from Blencowe’s experienced graphite sales and marketing advisors targeting a more conservative ramp up profile to ensure all products are able to be sold on start-up into various markets as identified.  It is likely that various different products will be sold into all of the key graphite markets, including engineered products, thermal management and energy storage. 

 

Pre-qualification of all end-products will commence from initial stage smaller scale production facility at Orom-Cross from 2023, which will deliver bulk samples over a period of 12-24 months prior to the main plant being commissioned, in order to build relationships with end-users over that period.  This will ensure that all end-products are qualified and can be locked into binding sales agreements once main stage production commences in 2025.

 

This lower volume start-up position has resulted in a reduced initial capital requirement of US$62M (down by 23% from the US$80M capex as per the PEA in 2021).

 

Capital Item

US$ M

%

Processing Plant

27.3

44.1

EPCM

5.3

8.5

Other Indirect Costs

3.1

5.0

Plant Infrastructure, including Tailings Storage Facility (TSF)

8.1

13.1

Camp and Facilities

8.4

13.5

Mining Capital

2.6

4.2

Owners Costs

2.4

3.8

Contingency

4.8

7.8

TOTAL

62.0

100%

 

This requirement is expected to be funded post-DFS by a combination of both debt and equity via strategic investors and funding partners.  The full capital requirement by stages is indicated in the table below, with subsequent future requirements to be funded internally from free cash generated by the mining operation itself.

 

Stage

Year

Capital Requirement

US$ M

Use of Funds

1

2024/5

62

Initial 800,000tpa plant

All infrastructure, including power, roads, TSF, communications and mine camp.

Includes mining capital and contingencies

2

2027/8

52

Additional 800,000tpa plant capacity, plus all associated infrastructure

3

2029/30

45

Additional 800,000tpa plant capacity, plus all associated infrastructure

 

 

3.  Infrastructure

 

Orom-Cross benefits by considerable key infrastructure already in place, which in turn lowers the capital required to commission the mine.  There are existing tarred roads from the regional centre Kitgum (90kms from site) all the way through to Mombasa port in neighbouring Kenya, and the road from Kitgum to nearby Orom (10kms from site) will be tarred by 2025; work on that is already underway.  Blencowe will establish local roads required around the mine site.

 

Power will be connected to the national grid which is currently nearby at Orom and will provide lower cost, energy-efficient hydro-power.  Wireless communications will be connected on site giving all range of phone and internet options.  There is plentiful water on and around the site and bores will be sunk for clean water.

 

A smaller processing facility and mine camp will be set up for initial stage production from 2023 to deliver bulk samples for pre-qualification, and a larger camp will be constructed together with additional plant, storage, admin offices and a larger tailings facility, prior to 2025 main start-up.

 

4.  Operating Costs

 

Orom-Cross benefits from several key attributes that combine to deliver one of the lowest operating cost graphite projects worldwide. 

 

Specifically these include:

· Low strip ratio for open pit mining (graphite presents from 0-25m below surface)

· No drill and blast required and minimal crushing (no hard rock)

· Lower energy costs (low cost hydro power off the national grid)

· Lower labour costs; and

· A simple process flow through a standard floatation plant.

 

Cost Centre

 

Average Cost per tonne (USD/t)

% Total

Mining

90

18.1

Processing

180

36.1

Fuel

3

0.6

Project Personnel

48

9.6

Project Services

35

7.0

Depreciation

17

3.4

Transport & Logistics

110

22.0

Sales & Marketing

16

3.2

 

TOTAL

 

499/t FOB port

 

100%

 

Mining will be owner-operated using equipment assumed as leased.  Training will be given to locals to fill positions wherever possible and Blencowe intends to build a strong base of experienced in-country personnel for all positions over life of mine.

 

Ore will be mined from both the Northern Syncline and Camp Lode deposits and stockpiled for processing through the plant, which will be located on-site and near to the mining operations.  An initial 500,000tpa of ore will be throughput but this will expand to 2.4mtpa over a series of ramp ups during the first ten years’ life of mine.  This will result in 36,000tpa of end-products delivered as concentrates from year 1 that will expand to 147,000tpa by year 10.  Operating costs per tonne will reduce over the life of mine as the production tonnage ramps up.

 

The processing flowsheet consists of a flash and rougher flotation stage followed by a primary cleaning circuit with a polishing mill, followed by three stages of cleaner flotation. The intermediate concentrate is classified and then further upgraded in secondary cleaning circuits with stirred media mills (SMM) followed by cleaner flotation.

Orom-Cross will deliver at least five different end-products, characterised by different mesh size fractions; namely +50 mesh, + 80 mesh, +100 mesh, +150 mesh and -100 mesh.  These products will all have different markets and will be branded and packaged at site.  Blencowe intends to apply for a Ugandan Free Trade Zone License (FTZL) in 2H 2022 which will allow for all goods for export to be custom-cleared at the mine site before being transported to Mombasa port by truck for shipment to end-users.

Initially the transport to port will be done via road but it is expected that by 2025 main plant start-up there may be a rail option available nearby which would lower logistics costs further.  Orom-Cross will be able to utilise cheaper backfill options for road transport as both Uganda and South Sudan are land-locked countries and therefore require substantial volumes of imported goods delivered by trucks, which often return to Mombasa port empty.  This is a key advantage.

 

5.  Weighted Average Selling Price

 

The basket of end-products that Orom-Cross produces will deliver a strong weighted average sales price of ~US$1,307/t.  Prices have been determined using updated Lone Star Tech Minerals (leading graphite sales and marketing expert) graphite pricing data, with forecast increments through to proposed 2025 start for the main production facility.  Thereafter a price increment of 2.5% p.a. is included for small flake products only taking into consideration higher demand as forecast for these products ahead.

 

The weighted average selling price is made up as follows:

 

Flake Size

Mesh Size

96-97% LOI

2025

%

End Product

Weighted Average US$/t

Jumbo

+32

3,510

1.5

53

Jumbo

+50

2,830

12.2

345

Large

+80

1,474

22.5

332

Large

+100

1,091

10.6

116

Medium

+150

990

15.1

149

Small

-100 / -200

982 / 752

11.9/26.0

117/196

 

 

 

 

1,307

 

The table shows a wide range of price differentiation between coarse and fine flake sizes for 96-97% LOI (loss on ignition) concentrates, and both current prices as well as forecast prices for 2025 expected start-up date.  Orom-Cross benefits from having ~35% of its end-products as jumbo or large flake sizes (+80 mesh) as these products sell into markets at a considerable premium to the smaller flake/mesh sizes.  The concentrates also benefit from having very low impurities.

 

Strong anticipated future demand for smaller flake product that can be upgraded to 99.9% SPG and used within batteries for EVs presents growth potential for further demand ahead, with this forecast to positively impact prices considerably over the next decade and beyond.  The market has already seen an upward shift in the price of these mesh sizes during 2022.

 

6.  Sales and Marketing

 

Blencowe has been working closely with experienced graphite marketing consultant Lone Star Tech Minerals LLC (USA) during the PFS period to identify products and markets to sell its graphite products into ahead.  Lone Star have over 30 years’ direct experience in graphite sales and their expertise has been valuable in all facets, including metallurgical test work, identifying product specifications, branding, packaging, customer identification, interaction and liaison.  Blencowe will continue to work with Lone Star as Orom-Cross moves towards first production.

 

Blencowe’s marketing strategy will be to construct a smaller scale plant initially at Orom-Cross from 2023 that will deliver 1,500tpa of end-products as concentrates for bulk sample sales into end-users.  This process of pre-qualifying will continue in parallel to the main plant being constructed in 2024 for target 2025 start-up, with all products thereby having had 12-24 months’ history of sales into customers before more extensive production commences. 

 

Blencowe intends to seek key ISO certifications for its plant and products through this pre-qualification period to ensure highest possible standards which will then be reflected in higher demand for its products, and potentially higher prices.

 

7.  Cash Flow

 

The high net operating margin generates substantial cash flow from Orom-Cross, particularly from when the mine has fully ramped up to 147,000tpa capacity by year 10.  This in turn generates free cash net of all taxes of US$1.073 billion from the Project over the initial 14 years’ life of mine.  As only a small percentage of the full Orom-Cross graphite deposit will have been mined out by then it is likely that further drilling will result in a considerable extension to the life of mine well beyond the initial 14 years, and with that significant additional net cash flow.

 

Royalties of 5% have been added and a 10-year exemption from corporate tax is also included in the model.  Thereafter a standard rate of 30% corporate tax is used.  Whilst Blencowe will not apply for any tax exemption until the Definitive Feasibility Study is completed the Company has been made aware the investment quantum for Orom-Cross and the nature of the exported end-products, plus certain other features, will allow for such an exemption to likely be granted; as such it has been included within the modelling.

 

Provision has been made for payments to the local community as dictated by the existing Local Community Agreement already in place, and for other means for Blencowe to assist such as water bores, health and educational support and various minor infrastructure.

 

8.  Management and staffing

 

Blencowe will ensure operational delivery of end-product via experienced management at Orom-Cross, specifically in key areas such as the processing plant.  However the Company will focus on training local staff wherever possible to transfer skills and to ensure participation. Ultimately the full operation will have >400 persons employed, operating in shifts to ensure constant mining and processing all year round.  Mining is will be owner-operated using dry hire equipment, as opposed to contract mining.

 

9.  ESG (Environmental, Social & Governance)

 

Blencowe is taking a firm stance from the outset on life cycle sustainability at Orom-Cross with every effort made to ensure the project operates using renewable energy sources wherever possible, and any non-renewable options are only considered as emergency or backup where no other alternative is possible. 

 

Orom-Cross benefits from the ability to utilise hydro-electric power sourced from the Ugandan national grid and various solar options are under consideration and will be examined further within the Definitive Feasibility Study stage.

 

Social programmes are already in place to ensure the local community benefits from a successful mining operation, and Blencowe will continue to work closely with the local community ahead to ensure its continued support.  Strong governance and risk management are critical to the success of the Project and Blencowe will monitor these aspects at all times to international standards.

 

10.  Strategy Forward and Timing

 

Blencowe is committed to bringing Orom-Cross into first production as soon as practically possible.  Subject to further revisions due to prevailing circumstances the following strategy and associated timings reflect the Company’s plan to advance Orom-Cross over the medium term:

 

Milestones

 

Dates

Comments

Stage 1 (pilot plant) feasibility study

3Q 2022

Specific study for 1,500tpa plant for bulk sample sales to end-users from 2023 onwards

Stage 1 plant implementation

1H 2023

Processing plant and associated infrastructure for initial stage production

Stage 1 plant commissioning

2H 2023

Commencement of operations at Orom-Cross

 

Definitive Feasibility Study

End-2023

DFS on main plant in parallel with development of Stage 1 main plant and infrastructure

Decision to Mine (main plant)

 

End-2023

Completion of DFS and decision to raise necessary funds for main plant implementation

Funding & implementation (main plant)

2024

Construction of main plant on-site

Main plant commissioning

 

2025

Commencement of operations (main plant)

 

As highlighted above, Blencowe anticipates moving into initial stage production at Orom-Cross during 2023 and building relationships with end-users via delivery of bulk samples sold over a period thereafter whilst the Company completes the DFS and builds the main production facility.

 

11.  Graphite demand within World Markets

 

Graphite is used in many different applications and there will be a different demand profile ahead for each based on prevailing circumstances, and as these products are in different sectors of the market they do not necessarily impact one another.  Blencowe will be looking to sell end-products into each of these market segments below:

 

· Engineered Products

Electronics, agriculture, automotive, lubricants, ceramics, government defence, carbon brush and foils products that use natural flake graphite products.  Other example applications that use graphite powder additives include friction, powder metallurgy, ceramics, foils, fire retardants, pencil, lubricants, dispersions, and carbon brush.

 

· Thermal Management

Applications that require graphite powder in various mesh or micron sizes as a thermal insulator or conductor in a wide range of applications including traditional and advanced graphite products for high end refractories, standard refractories, HMF (Hot Metal Forging), HMT (Hot Metal Toppings), crucibles, foundry and geothermal.

 

· Energy Storage

The energy sector continues to require new producers of consistent and high quality advanced carbon and graphite products to meet the needs of the global population for consumer goods, grid stabilisation, transportation, communications, aerospace and medical device advances. Applications and markets within the energy storage group will experience increased demand for innovative high tech graphite solutions.

The applications that are receiving the least attention requiring significant volumes of high purity micronised carbon powders are secondary battery (cathode) and primary battery (alkaline); both of which use high purity (99.9% LOI MIN) micronised carbon or graphite powder as a conductive additive without the need for any additional morphology modification.

There is significant discussion on the current and future needs of advanced battery technologies for critical raw material supply; specifically lithium, carbon and graphite products. Advances in battery and raw material technologies require increasing higher quality in advanced carbon or graphite products. These advances need to meet not only energy density requirements, but power density and energy requirements as industrial and consumer electronics become more sophisticated. Blencowe is making strategic steps to meet those future challenges. Electrochemistry applications that use carbon or graphite powders as a conductive additive include batteries, fuel cells, & super-capacitors.

 

Price points for each market group are not the same for every application and can vary significantly from one to another.  A traditional or advanced graphite powder production facility must possess the capability to produce multiple products created from a single source or feedstock with processes and packaging to meet specific customer requirements. This will encompass serving multiple product families with various combinations resulting in large number of unique permutations. Specific target applications have the potential to deliver significant incremental revenue and profits creating long term sustainability and future growth for the Company.

An advanced carbon powder manufacturing program will include certifications to include ISO: 9001 (QA/QC) and ISO: 14001 (EMS) in line with industry, application and customer requirements.  Blencowe Resource’s Orom-Cross graphite project is set to be part of the next generation of traditional and innovative advanced carbon powder products for the global market. It is prudent in any graphite business strategy to diversify product offerings and target market focus to provide for progressive revenue streams to weather a variety of market dynamics that could potentially affect one market or another.

 

Due to graphite’s metallurgical rarity, its unique physical and chemical properties, and its growing importance in high technology applications and green energy initiatives, natural graphite has been declared a strategic mineral by both the USA and European Union (EU).  Natural Graphite is positioned as one of 24 critical raw materials out of 54 candidate materials.

The critical success factor for Blencowe Resources will be the Company’s manufacturing focus on delivering higher quality, consistent flake graphite products and not focusing solely on selling bulk tonnes of lower quality flake graphite at lower prices; a strategic position of quality over quantity.

 

#BRES Blencowe Resources – Annual Financial Report

Blencowe Resources Plc, the natural resources company focused on the development of the Orom-Cross Graphite Project in Uganda, is pleased to announce its audited financial results for the year ended 30 September 2021 (the “Annual Report”).

The Annual Report which includes an unqualified audit report and audited Financial Statement for the year ended 30 September 2021 will be made available on the Company’s website at www.blencoweresourcesplc.com.  Hard copies will be posted to the Company’s shareholders.

For further information, please contact:

 

Blencowe Resources

Sam Quinn

 

www.blencoweresourcesplc.com

Tel: +44 (0) 1624 681 250

info@blencoweresourcesplc.com

 

Investor Enquiries

Sasha Sethi

Tel: +44 (0) 7891 677 441

sasha@flowcomms.com

 

Tavira Securities Limited

Jonathan Evans

Tel: +44 (0)20 7100 5100

jonathan.evans@tavirasecurities.com

 

First Equity Limited

Jason Robertson

Tel: +44 (0)203 192 1733

jasonrobertson@firstequitylimited.com

Alan Green talks about #DEST Destiny Pharma, #BIDS Bidstack & #BRES Blencowe Resources

 

Alan Green talks about #DEST Destiny Pharma, #BIDS Bidstack & #BRES Blencowe Resources

Listen to the Podcast – https://www.voxmarkets.co.uk/articles/alan-green-talks-about-destiny-pharma-bidstack-blencowe-resources-8eb524a/

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