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Blencowe Resources #BRES – Strategic Investment by AIM-Listed Jangada Mines plc and Two Existing Major Shareholders

Blencowe Resources Plc (“Blencowe Resources” or the “Company”) (LSE: BRES) is pleased to announce a placing of 18,750,000 new ordinary shares (“Placing Shares”) at 4 pence per share to raise a total of £750,000 (“Placing”) from three existing shareholders. The placees will receive 1 warrant per 2 Placing Shares, exercisable at 8p for 3 years from admission (“Investor Warrants”).

Highlights

  • £750,000 raised at 4p per share with 3 existing investors
  • Jangada Mines plc to increase holding from 2% to 9.5% of enlarged share capital
  • Existing major shareholders RAB Capital and JUB Capital continue to invest pro rata to their existing 10.0% and 8.2% shareholdings respectively
  • Asset-level transactions now targeted for DFS and ultimate development of Orom-Cross

The Placing was cornerstoned by Jangada Mines plc whom invested £610,000, which has increased their holding from 2% to 9.5%. Also, the Company’s two other largest institutional investors RAB Capital and JUB Capital have subscribed for the remaining £140,000 in the Placing, on a pro rata basis, to maintain their respective 10.0% and 8.2% holdings in the enlarged share capital of the Company following the Placing.

Use of Proceeds

The funds will be dedicated to fund the delivery of a 100 tonne bulk sample from Orom-Cross to China and general working capital.

On 3 October 2022, the Company reported an approach from a potential strategic party looking to undertake further off-site testing ahead of potentially providing an offtake and funding solution for the development of Orom-Cross. This successful capital raise will enable the Company to accelerate the bulk sampling plans and build on the highly encouraging PFS results.

Admission of Shares to Trading

The Company has made an application for 18,750,000 ordinary shares to be admitted to trading on the official list and the London Stock Exchange with effect from 8.00 a.m. on 31 October 2022 (“Admission”).

In accordance with the FCA’s Disclosure Guidance and Transparency Rules, the Company confirms that following Admission, the Company’s enlarged issued ordinary share capital will comprise 196,679,950 Ordinary Shares. The Company does not hold any Ordinary Shares in Treasury.

Therefore, following Admission, the above figure may be used by shareholders in the Company as the denominator for the calculations to determine if they are required to notify their interest in, or a change to their interest in the Company, under the FCA’s Disclosure Guidance and Transparency Rules.

Executive Chairman of Blencowe Cameron Pearce commented:

“I am delighted to welcome Jangada Mines as a new significant shareholder in the Company. They share our view of the inherent value of Orom-Cross, which has already returned a NPV of US$482M from a fraction of our broader resource. I would also like to thank our two major shareholders for their continued support and maintaining their holdings through participation in the Placing. At a time when raising capital for junior resource companies remains difficult, we are delighted to have secured funding sufficient to provide working capital for a year at the plc level and also enable us to commence the process to deliver a 100 tonne bulk sample to our potential strategic partner in China.

As we have previously stated, given the substantial disconnect between our market capitalisation and asset value, the focus of the Company is to enter strategic transactions at the asset level for material development, thereby minimising shareholder dilution and capturing a fairer reflection of value. The Company has previously advised it hopes to execute its first asset level transaction in the current quarter, which is expected to provide sufficient funds to complete the DFS. This is running in parallel with the ongoing discussions with our potential strategic partner in China.

I look forward to updating shareholders as appropriate.”

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 Securities 

Jonathan Evans

Tel: +44 (0)20 3192 1733

jonathan.evans@tavirasecurities.com

 

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/

Blencowe Resources #BRES – Approach from Potential Strategic Party in China

Blencowe Resources Plc (“Blencowe Resources” or the “Company”) (LSE: BRES) is pleased to announce it has received an approach from a group in China that has the potential to ultimately provide an offtake, funding and development scenario for its 100% owned Orom-Cross graphite project in Uganda.

Highlights:

  • Approach received from a strategic party in China with extensive experience in graphite.
  • Potential to provide offtake contracts and project funding solution for Orom-Cross.
  • Additional bulk samples to be delivered to China for further off-site testing.
  • Pilot plant strategy in Uganda suspended, removing material near-term capital requirement.
  • End-product samples as 96% LOI concentrate to be shipped to Chinese and European firms for trials to lift to 99.9995% LOI product for batteries.
  • Technical Data Sheets sent to prospective end users to confirm interest and support for Orom-Cross concentrates. Feedback, interest and discussions already underway.

Based on these discussions, the Company has agreed to send a bulk sample of ~100 tonnes from Orom-Cross to China as soon as possible to enable further metallurgical test work to be undertaken by the potential strategic party.  This is subject to the Company receiving necessary permits to move this raw material from Uganda, which are being sought immediately.

Blencowe has already been able to share significant data with the potential strategic party having previouslycompleted two stages of bench scale metallurgical testing with SGS in Canada (30kgs) and more recently a further round of testing via a small pilot plant (130kgs) in Perth, Australia.  This next-level proposed test in China, using their existing infrastructure and experience, would be done on a considerably larger scale which will give all parties more knowledge of the end product that can be produced in an enlarged scenario from Orom-Cross.  It is hoped that this program will initially lead to non-binding MOUs for offtake, and ultimately to binding sale agreements for a substantial portion of the initial 50,000tpa product to be produced from stage one within Orom-Cross. There may also be potential for EPC and funding contracts emanating from this relationship, potentially providing a solution to the CAPEX requirement to production.

Given this interest out of China and the relatively short period to complete this test work over the next 6-9 months the Company has taken the decision to postpone its plans to build an on-site pilot plant facility of 2,000tpa at Orom-Cross. Binding offtake contracts to purchase Orom-Cross graphite would likely remove the need for a pilot plant, as the principal rationale for its implementation was to provide product to would-be offtakers to enable them to assess its viability for their own uses. A direct impact of this decision is that there is no longer a requirement to raise substantial cash (circa US$10M) in the near term via the equity markets to fund the on-site pilot plant.

The Company will continue to keep the market informed of progress on these discussions, as well as further key milestones achieved from the ongoing DFS (please see RNS of 26 September 2022 for further information).

Cameron Pearce, Executive Chairman commented;

“China is currently the most mature graphite market worldwide and entering into an offtake relationship there would be very valuable to us given the highly attractive economics at Orom-Cross, which already has an NPV8 of US$482M based on a 14-year mine life from just 2% of our broader graphite resource as currently drilled out. 

We believe this bulk sample trial will prove highly significant and is potentially a precursor to a full offtake agreement and subsequent project funding, which in turn would enable us to kick start production with a critical mass of product sold to drive profitability and cash flow”.

The graphite market is evolving very quickly and we will see a lot of change ahead as the world drives towards 100 million expected electric vehicles by 2030. The Chinese market remains the largest by far, and will remain so for some time. Establishing a strong and commercial relationship with Chinese partners is therefore decisive and is a natural progression for the Company. Given this positive development we have elected to postpone any decision on a pilot plant on-site until these trials and discussions have reached a conclusion as it is expected a positive result will remove the need for a pilot plant, with the project instead moving straight into full development.  This decision will not only save us considerable cash outlay right now, but potentially expedite the development of Orom-Cross.”

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 Securities 

Jonathan Evans

Tel: +44 (0)20 3192 1733

jonathan.evans@tavirasecurities.com

 

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 is now moving 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. Development of the resource is expected to benefit from a low strip ratio and free dig operations, thereby ensuring lower operating and capital costs.

Blencowe Resources #BRES – Definitive Feasibility Study Commences on Orom-Cross Graphite Project

Blencowe Resources Plc (“Blencowe Resources” or the “Company”) (LSE: BRES) is pleased to announce that it has commenced the Definitive Feasibility Study for its flagship Orom-Cross graphite project located in Uganda, East Africa.

Highlights

·    Definitive Feasibility Study (DFS) commences with target completion date 2H-2023.

·    Engagement with specialist graphite engineering firm to manage the DFS.

·    Blencowe currently reviewing various options for strategic alliances in key areas within the Orom-Cross project, including;

Offtake

Funding

EPC (Engineering, procurement and construction of plant)

This follows outstanding Pre-Feasibility Study results (NPV8 US$482M: IRR8 49%) as presented to the market in July 2022, which have prompted the Company to move quickly on to this next stage of project development.  The DFS is the last step in terms of major studies prior to the board making a decision to mine.

Blencowe is currently in the final stages of a process to select an experienced independent engineering firm to manage and ultimately sign off on the DFS. The Company anticipates announcing the engineering partner in the near term.

The Company is also assembling a strong management advisory team to assist with all key aspects of the study, including plant design, engineering, infrastructure, mining, operations, sales and marketing (offtake), environmental and social aspects, and all project funding.  This team will comprise of resource executives who have considerable experience delivering projects through to production in Africa, as well as specific graphite experience.  They will assist the existing Blencowe management team at all levels to deliver a successful DFS.

Metallurgical test work already completed in both Canada and Australia indicates that Orom-Cross can produce several high-quality end products as a 96-97% LOI concentrate. Additional metallurgical test work is anticipated in 2023, as part of the DFS, to test the expandability, spheroidisation and spherical graphite purification (SPG) properties, as the ability to cost-effectively further upgrade Orom-Cross concentrates is expected to add significant additional value to the project.

The Company will continue to keep the market informed of progress as key milestones within the DFS process are completed.

Cameron Pearce, Executive Chairman commented;

“We continue to make substantial progress at Orom-Cross, having moved from project acquisition through JORC Resource drilling and Pre-Feasibility Studies and now into the Definitive Feasibility Study stage, all within just 2.5 years.  The quality and value of Orom-Cross graphite continues to inspire us to move as quickly as possible towards a decision to mine but at the same time we are ensuring all key areas are thoroughly analysed including third party reviews by industry experts.  Quality and consistency of end product remain critical to building strong buyer relationships and we will continue to test the properties of our graphite as necessary to ensure our product is considered at the highest levels compared to other graphite products available worldwide.  This is an ongoing exercise but more end product value is being added at each stage.”

He added “Graphite demand is growing fast as forecast and as the market becomes increasingly more aware that there are very few new graphite mines scheduled to commence production in the near term this demand-pull will potentially drive further price rises ahead, particularly for the products found at Orom-Cross.  Blencowe owns 100% of one of the largest, high-quality graphite projects in the world and is therefore uniquely placed and significantly leveraged to take advantage of this emerging market moving forward.”

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@tavirasecurities.com

 

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 is now moving 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. Development of the resource is expected to benefit from a low strip ratio and free dig operations, thereby ensuring lower operating and capital costs.

Blencowe Resources #BRES relinquishes Akelikongo Nickel Project to focus on Orom-Cross

Blencowe Resources Plc (“Blencowe Resources” or the “Company”) (LSE: BRES) announces that is has terminated its agreement with SIPA Resources (“SIPA”) with respect to the Akelikongo nickel project.

The decision by Blencowe to terminate the agreement means it is no longer required to issue US$350,000 of shares  to SIPA as part of the consideration following the completion of Stage 1.  It also means that the US$500,000 spend obligation by February 2023, for Stage 2, is no longer required.

The decision to relinquish its exposure to the Akelikongo project has been driven primarily by the truly exceptional results from the Pre-Feasibility Study (PFS) on the Company’s flagship Orom-Cross graphite project, which yielded a post-tax NPV8 of US$482M and an IRR 49% (for more information please see 19 July 2022 RNS). Accordingly, the Company believes it is in the best interests of its shareholders to focus all of its attention and resources on unlocking the inherent value at Orom-Cross.

Blencowe has targeted bringing Orom-Cross into initial production before the end of 2023, in order to commence the pre-qualification process of selling end product as concentrate into offtake parties.  Given the disconnect between plc market valuation (US$5M market cap) and the value of the Orom-Cross Project (NPV US$482M) the Company is focused on completing an asset-level transaction to fund the project through development and into production. Further updates will be provided as and when appropriate.

Cameron Pearce, Executive Chairman commented;

“We have considered the merits of running two projects in parallel and at this particular point we believe that concentrating solely on our priority graphite project makes most sense.  The excellent PFS results for Orom-Cross reaffirmed its value. Whilst this has yet to be reflected in our public markets valuation, we are now seeing heightened interest from industry and private equity. Accordingly we believe now is the appropriate time to focus solely on Orom-Cross, whilst removing any unnecessary plc dilution at this depressed level. 

We do still see the synergistic benefits of another battery metal project near to Orom-Cross and we may revisit a nickel strategy in the future. However, we are seeing a fundamental shift in the graphite market right now with the price of small fines rising substantially over recent months as projected demand-supply issues finally begin to impact. The resource used in our US$482M NPV represents less than 2% of the total Orom-Cross resource base. We believe the scalability of Orom-Cross will hold significant appeal for prospective partners, particularly given a mining licence is already in place. We are focused on reaching this milestone and unlocking the value for all our stakeholders and look forward to updating shareholders in due course.”

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 Securities 

Jonathan Evans

Tel: +44 (0)20 3192 1733

jonathan.evans@tavirasecurities.com

 

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 is moving into the studies phase shortly 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. Development of the resource is expected to benefit from a low strip ratio and free dig operations, thereby ensuring lower operating and capital costs.

Blencowe Resources #BRES – Major Milestone as Blencowe Delivers Substantial Pre-Feasibility Study for Orom-Cross Graphite Project

Highlights

  • Pre-Feasibility Study (PFS) completed on time and under budget.
  • PFS indicates a robust, long-term, profitable graphite mining operation at Orom-Cross.
  • Highlights include:
    • Initial life of mine 14 years which can be further incremented by additional drilling.
    • Net Present Value (post-tax) of US$496M / IRR (post-tax) of 50%.
    • Operating cost (FOB Mombasa port) of US$499/t, underlining Orom-Cross as one of the lowest cost graphite projects worldwide.
    • Valuable basket of end-products delivering a significant weighted average selling price of US$1,307/t, thereby ensuring a considerable operating margin per tonne.
    • US$1.398 billion EBITDA delivered from project over life of mine, with an average US$100M EBITDA per annum for 14 years.
    • US$1.10 billion cumulative Net Cash delivered from project over life of mine.
    • Initial Capital requirement of US$62M, inclusive of contingency, which is lower than previously reported capex (PEA 2021) by 23%.
    • Production to commence at rate to deliver ~36,000tpa end-products as 96-97% LOI concentrates in year 1, ramping up in stages thereafter to ~150,000tpa by year 10.
    • ~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 10-year corporate tax exemption.
  • PFS signed off by leading graphite technical experts Battery Limits Pty Limited (Australia), who have delivered several other leading graphite project feasibility studies in the past.
  • 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 mid-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 signed off on several other leading graphite project feasibility studies worldwide. 

Executive Chairman of Blencowe, Cameron Pearce commented:

“This PFS represents our first major milestone for Orom-Cross and the results are outstanding.  We have considerably outperformed the Preliminary Economic Assessment that we delivered in 2021 in all key areas and yet we have done this with an initial capital requirement that is now significantly lower than that shown within the PEA.” 

He added “The Orom-Cross NPV (Net Present Value) of US$496M is excellent, especially in relation to this lower capex, and proves that this graphite project is a standout.  It already has a long mine life that can be extended at any time with additional drilling and it delivers a high quality concentrate with specific element content that is unique and which will elevate 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. 

Various other graphite projects have indicated much larger start-up production tonnages than we have, which in some cases fabricate higher numbers for their project NPVs, but we do not believe that over-inflated early sales volumes are deliverable; as such we have adopted a more conservative profile for both start-up and the ramp-up thereafter.  Credibility is very important to us.  This helps delivers a lower initial capital requirement for Blencowe to commission the mine which is another big advantage.

Together all of these above are tremendous results for our Project and we will now begin focussing on bringing Orom-Cross to an initial stage production during 2H 2023 as our next significant milestone.”

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 400ktpa, moving to 2.4Mtpa at year 7
Average tonnes (concentrate) produced pa over life of mine 101,000tpa Start-up 36ktpa; moving to 150ktpa by year 7

1.42M tonnes over life of mine

Initial Capital Requirement US$62M Plant, camp, equipment, all infrastructure, plus working capital & contingency
Net Present Value (NPV) US$496M 10X return on capital invested
Internal Rate of Return (IRR) 50% Highlights strong rate of return on investment
Weighted Average Selling Price/t – life of mine 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$1.10Bn 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 500,000 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 35,000tpa of end-product as concentrates will be delivered from the plant which increments in two additional stages to 150,000tpa 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.

  1. Capital Requirement

Blencowe will commence main operations from 2025 at an initial output of 35,000tpa 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 30% from the USD80M capex as per the PEA in 2021).

Capital Item US$ M %
Processing Plant 27.3 44.0
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 8.3 13.4
Mining Capital, Workshops, Vehicles 2.6 4.2
Owners Costs 2.4 3.9
Contingency 4.9 8.0
 

TOTAL

 

62.0

 

100%

This requirement is expected to be funded by a combination of both debt and equity via strategic investors and funding partners.  The full capital requirement for each of the three stages is indicated in the table below.

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 start-up costs and working capital

2 2027/8 48 Additional 800,000tpa plant capacity, plus all associated infrastructure
3 2029/30 47 Additional 800,000tpa plant capacity, plus all associated infrastructure
  1. 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, and either solar or diesel generators will be used as backup.  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.

  1. 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 18.0
Processing 180 36.1
Fuel 3 0.6
Project Personnel 48 9.6
Project Services 35 7.0
Depreciation 18 3.6
Transport & Logistics 110 22.0
Sales & Marketing 15 3.1
 

TOTAL

 

499/t FOB port

 

100%

Mining will be owner-operated using equipment either purchased outright or 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 35,000tpa of end-products delivered as concentrates from year 1 that will expand to 150,000tpa 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.

  1. 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.

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.

  1. 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 initial plant 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.

  1. Cash Flow

The high net operating margin generates substantial cash flow from Orom-Cross, particularly from when the mine has fully ramped up to 150,000tpa capacity by year 10.  This in turn generates free cash net of all taxes of US$1.10 billion from the Project over the initial 14 years’ life of mine.  As only ~1% of the full Orom-Cross graphite deposit will have been mined out by then it is very likely that further drilling will result in an 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.

  1. 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.

  1. 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.

  1. 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 2H 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 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.

  1. 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.

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 Securities

Jonathan Evans

Tel: +44 (0)20 7100 5100

jonathan.evans@tavirasecurities.com

 

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 is now in the Feasibility Study phase as it drives towards first production targeted for 2023.

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. Development of the resource is expected to benefit from a low strip ratio and free dig operations, thereby ensuring lower operating and capital costs.

Akelikongo Nickel Project

Akelikongo is a highly prospective nickel sulphide exploration project that has previously had considerable work completed by Rio Tinto and Sipa to establish three mineralised lenses to date.  It represents an opportunity for Blencowe to add further value through a targeted work programme that will seek to delineate higher grade and thicker intercepts of nickel.

Nickel sulphide deposits are rare and valuable and the prospect of further exploration success gives Blencowe suitable incentive to develop this asset under a structured earn-in agreement, whereby 100% of the asset can ultimately be acquired for US$1.5m, 100% payable in shares.

Blencowe Resources #BRES Engages Leading Global Sustainability Consulting Firm ERM to Build Strong ESG Platform

Blencowe Resources (“Blencowe” or the “Company”) is pleased to announce that is has engaged with one of the leading worldwide consultancy firms specifically relating to life cycle sustainability and ESG (environmental, social and governance) credentials.  ERM has led the way in this field globally for some time and their involvement with Blencowe will greatly assist both the Company and its two resource projects deliver a more sustainable pathway into the future.

ERM have been engaged to consider all aspects in this regard and to map out a series of initiatives that will put Blencowe at the front end of the market in terms of delivering green graphite products.  As the world moves towards decarbonisation, electric vehicles (EVs) and clean energy technologies offer a path towards a more sustainable future, however these technologies are mineral intensive and the efficient production of these minerals will play a key role in the clean energy transition.  Graphite is the primary anode material and the single largest component of lithium-ion batteries and as such it has an important role within this drive towards sustainability, both in terms of what the end product is used for as well as how it is produced.  Green graphite may be described as graphite that is delivered with a low environmental footprint, including energy efficient production.

It is not enough that one of the principal uses of graphite moving forward will be within the lithium-ion battery that power EVs, and which ultimately will greatly reduce the number of fossil fuel-driven vehicles; it is also important to produce that graphite within a mining and processing environment that is life cycle sustainable and delivers as low emissions as possible.

Blencowe believes that delivery of green graphite will increase the demand for its products as end users are all coming under increasing pressure to audit their supply chains more closely to ensure the products they use are delivered by companies with strong ESG credentials.  Furthermore, Blencowe believes its Orom-Cross graphite project will be more likely to attract investors to finance production if it has these properties.  As a result the Company has engaged ERM to work with it to deliver a range of policies, targets and initiatives to ultimately deliver green graphite.

Some of the key messages Blencowe will underline within this programme include:

·    Publicly acknowledge global ESG initiatives and develop policies to ensure the Company is managing its projects (and ultimately operations) to the required standards.

·    Put policies in place within Blencowe to consider key areas such as climate control, supply chain responsibility, human rights, indigenous engagement, risk management and cultural awareness.

·    Actively supporting social responsibility within the local and regional communities.

·    Ensure governance is managed to highest possible standards

·    Continue to place environmental impact at the forefront of strategic development initiatives.

All of these focal points will be considered in day to day activities as well as the various feasibility studies that Blencowe is preparing in order to take Orom-Cross graphite project into production next year.  As practical examples the Company is already considering options to replace diesel generated power at the mining operation with solar farms, with use of hydro-electric power off the national grid as backup.  Electric drying of product through the processing facility will also be considered, plus dry tailings to improve the environmental footprint as well as the most energy efficient logistics solution to move end-product to market.

Legal Agreements are already in place providing the local community with compensation payments for use of their land, and this is already making a huge difference to their farming operations.  An ongoing Educational Trust is in place which is giving local community students the opportunity for further education opportunities that would not have been available prior, and this will continue and grow moving forward.

Blencowe will ensure that all of this is done within the delivery of a commercially viable operation as that remains the ultimate goal, but the Company believes both profitability and sustainability can and should be delivered together.

Executive Chairman Cameron Pearce commented:

“We acknowledge that the world is changing fast and ESG awareness is more prominent that ever before.  We believe we should do more than lip service in this regard, to play our role within this climate change revolution by constantly improving our environmental efficiency as well as building our social and governance credentials.  By bringing in one of the leading sustainability consultancy firms in the world to advise us we are underlining our commitment within this key area.  Green graphite is the way forward and we will target delivery of some of the cleanest end-products when we commence our graphite operation at Orom-Cross from 2023.”

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 Securities

Jonathan Evans

Tel: +44 (0)20 7100 5100

jonathan.evans@tavirasecurities.com

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 is moving through the Feasibility Study phase as it drives towards first production targeted for 2023.

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. Development of the resource is expected to benefit from a low strip ratio and free dig operations, thereby ensuring lower operating and capital costs.

Akelikongo Nickel Project

Akelikongo is a highly prospective nickel sulphide exploration project that has previously had considerable work completed by Rio Tinto and Sipa to establish three mineralised lenses to date.  It represents an opportunity for Blencowe to add further value through a targeted work programme that will seek to delineate higher grade and thicker intercepts of nickel.

Nickel sulphide deposits are rare and valuable and the prospect of further exploration success gives Blencowe suitable incentive to develop this asset under a structured earn-in agreement, whereby 100% of the asset can ultimately be acquired for US$1.5m, 100% payable in shares.

Blencowe Resources #BRES Provides PFS Update for Orom-Cross Graphite Project in Uganda

Blencowe moving to complete PFS on Priority Project by mid-year as precursor to implementing First Graphite Production from 2023

Highlights

·    Blencowe acquired world class Orom-Cross graphite project less than 2 years ago; has been on fast-track development towards production ever since.

·    Extensive infill drilling programme was completed in 2021 to provide updated JORC Resource estimate for use within Pre-Feasibility Study (“PFS”)

·    Phase Three Metallurgical test work near completion to provide fact sheets to users on end products and process flows to achieve them

·    Work underway in all facets to deliver high quality PFS by mid-year target date

Blencowe Resources (“Blencowe” or the “Company”) is pleased to provide an update on its ongoing Pre-Feasibility Study at its priority Orom-Cross graphite project.  Orom-Cross is a substantial graphite deposit with an estimated 2-3 billion tonnes, of which the first 20 years life of mine has already been drilled out.  However the deposit is so vast that this represents less than 1% of the estimated graphite within the tenements.  Furthermore, the graphite is shallow and Blencowe will be mining to just 25 meters which means low cost mining from a free dig open cut operation.

The Preliminary Economic Assessment (“PEA”) for Orom-Cross (completed September 2021) provided the basis for a large scale 75,000tpa graphite operation, however Blencowe has indicated that it will scale this down in the early years to allow for a lower risk, lower capex start-up, around 25,000tpa of high grade concentrate.  There will be provision for ramping this plant size and production rate up quickly over the first ten years to accommodate what is expected to be a surge in demand for flake graphite, predominantly for use within lithium-ion batteries for electric vehicles (EVs).

The Company is working closely with its specialist technical partner Battery Limits to deliver a low cost mining operation that will put Orom-Cross in the lowest percentile of worldwide graphite producers, which not only provides more margin and earnings but also de-risks the operation significantly.  Low capital costs to implement and low operating costs once in production are massive advantages to any mining operation.

Currently Blencowe is awaiting the revised JORC Resource estimate for Orom-Cross, based on the extensive infill drilling programme from 2021, and its geological partner Minrom will provide this update shortly.  This JORC Resource is expected to increment the 16Mt at 6.0% TGC that was announced to market in 2021 and provide additional tonnes that can be utilised for a much longer mine life than previously indicated in the PEA.  In parallel work is being completed on Phase Three metallurgical test work to refine the end products that will be delivered as concentrate from Orom-Cross, and these results are also expected shortly.  Phase Two met test work indicated a high quality array of end products that should be sought after in the market, and Phase Three is expected to underline this further by confirming the marketable characteristics of the different mesh size products and producing concentrates for consumer testing prior to pilot plant production .

One of the key additions within the PFS (from the 2021 PEA) is the expectation that Blencowe will deliver a pilot plant by 2023 in order to product small quantities of these same end products to pre-qualify sales into end users.  This is seen as a necessary and integral step in order to sell higher quantities of graphite concentrate from 2025 onwards when the main plant is expected to be commissioned.

Furthermore, Blencowe is also looking at all options to deliver green graphite products via a project that leans heavily on renewable energy and other sustainable components.  This is seen as a very important objective within the PFS and the strategy moving beyond.

All other areas within the PFS are going to plan, with work underway on all key areas including infrastructure, energy, roads, water, tailings, logistics, sales and marketing, plus plant and camp design.

Cameron Pearce, Blencowe’s Executive Chairman commented;

“Blencowe is moving quickly to establish itself as a producer of premier grade green graphite products, delivered at a low operating cost to both de-risk and to ensure highest possible margins.  The PFS is exploring all options, including a pilot plant from 2023 as a precursor to the main plant commissioned by 2025.  Graphite demand is forecast to expand considerably from 2025 onwards and Blencowe wants to be positioned by then not only as a producer but also ready and able to expand quickly and cost-effectively to take advantage of growing worldwide demand.  Events in Eastern Europe over the past month have underlined the importance of supply chain diversification and we aim to provide a high quality alternative supply route for a key battery metal, within a low risk location.

We have also recently added a highly prospective nickel sulphide project into our portfolio as well, to further expand our upside.”

We have come a long way in the 2 years since we acquired Orom-Cross, and the upswing in demand that we are seeing for the products we will produce has fully justified our strategy.  The next important step will be to provide the market with a clear picture of what our production plans ahead look like, including pre-qualification of sales into end users over a longer period so they can all fully understand the characteristics of the products we will deliver prior to expansion into full production mode.”

 

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 Securities

Jonathan Evans

Tel: +44 (0)20 7100 5100

jonathan.evans@tavirasecurities.com

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 is moving through the Feasibility Study phase as it drives towards first production targeted for 2023.

Orom-Cross presents as a large, shallow open-pitable deposit, with a maiden JORC Indicated & Inferred Mineral Resource deposit of 16.3Mt @ 6.0% Total Graphite Content. Development of the resource is expected to benefit from a low strip ratio and free dig operations, thereby ensuring lower operating and capital costs.

Akelikongo Nickel Project

Akelikongo is a highly prospective nickel sulphide exploration project that has previously had considerable work completed by Rio Tinto and Sipa to establish three mineralised lenses to date.  It represents an opportunity for Blencowe to add further value through a targeted work programme that will seek to delineate higher grade and thicker intercepts of nickel.

Nickel sulphide deposits are rare and valuable and the prospect of further exploration success gives Blencowe suitable incentive to develop this asset under a structured earn-in agreement, whereby 100% of the asset can ultimately be acquired for US$1.5m, all payable in shares.

Blencowe Resources #BRES confirms Successful Infill Drilling on Northern Syncline Lode at Orom-Cross Graphite Project

Blencowe is pleased to provide a further update to the comprehensive JORC Resource diamond drilling program that was completed in 2H 2021 on its Orom-Cross Graphite Project in Uganda

Highlights

·    Drilling at the Northern Syncline Lode delivers some outstanding high grade graphite results in the oxide zone including:

ORNS-L902, 11 metres at 9.01%TGC from 4 metres

ORNS-L1502, 10 metres at 11.00% TGC from surface and 12m @10.91%TGC from 13 metres

ORNS-L1602, 17 metres at 8.97% TGC from surface

ORNS-L1206, 3 metres at 12.43%TGC from surface

ORNS-L1204, 6 metres at 10.12% TGC from 3 metres

ORNS-L1202, 20 metres at 9.24% TGC from 4 metres

·    These results will strengthen the updated JORC Standard Mineral Resource Estimate and

Reserve determination for the Northern Syncline Lode scheduled for release in late February

Blencowe Resources Plc (“Blencowe Resources”) (LSE: BRES) is pleased to announce exceptional high-grade drilling results which will help to strengthen the updated JORC Mineral Resource and Reserve Estimate update at its Orom-Cross graphite project in Uganda, scheduled for release by end February 2022.

The results highlight the quality of the Project’s mineralisation and ultimately its ability to be one of the lowest cost producers of graphite concentrate internationally.

The drilling targeted mainly infill zones the weathered zone of the Northern Syncline deposit, and was planned so as to provide a basis for upgrades in Resource classification as well as extensions to existing high-grade oxide mineralisation. The spectacular near-surface intercepts confirm existing geological interpretations as well as grade continuity over the strike length of the Northern Syncline in a similar way to the recent Camp Lode results as recently announced.

The Northern Syncline deposit has been subjected to a diamond drill hole program on a 25 metre by 12.5 metre grid. The drilling was specifically designed to provide sufficient information to enable the classification upgrade of resources at the Northern Syncline deposit into the Measured and Indicated categories and enable an updated JORC Resource Estimate on the Northern Syncline.

All the holes to date have returned visible grade graphite over the majority of 30m of intersection, with weathering extending to within 5m of the base of the holes in most cases. This may present Blencowe with further high-grade ore for initial mining which could have significant advantages to both mining costs and product quality.  Subsequent logging by the Company’s geologists has identified zones of large to jumbo flakes in the core.

The core has been assayed at SGS in Perth, Western Australia using the method C-IR18. The method is appropriate for understanding graphite deposits and is a total method.

Blencowe Resources continues to review the sample assays and QA/QC checks are expected to be completed shortly enabling the company to proceed to finalising the revised and upgraded Mineral Resource Estimate.

Executive Chairman Cameron Pearce commented; “Our drilling campaign for 2021 has returned very positive high grade results for both the Northern Syncline and Camp Lode deposits, which will assist Blencowe to complete a revised JORC Resource Estimate in the next few weeks.  We are also pleased to see options emerging for higher grade early stage mining which will positively impact operational costs.”

He added “We are largely completed in terms of drilling at Orom-Cross and we do not require any further major campaigns in order to commence mining ahead.”

 

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 Securities

Jonathan Evans

Tel: +44 (0)20 7100 5100

Jonathan.evans@tavirasecurities.com

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 is moving into the studies phase shortly 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 16.3Mt @ 6.0% Total Graphite Content. Development of the resource is expected to benefit from a low strip ratio and free dig operations, thereby ensuring lower operating and capital costs.

Blencowe Resources #BRES – Update on Work Programme for 2022 and Appointment of Country General Manager

Blencowe Resources Plc (“Blencowe Resources” or the “Company”) (LSE: BRES) is pleased to announce and update on all activities for 2022 as it seeks to drive its flagship Orom-Cross Graphite Project towards first production in 2023.

Highlights

  • Revised, upgraded JORC Standard Resource imminent
  • Further metallurgical test work underway with SGS in Canada
  • Initial Sales and Marketing Strategy being finalised
  • Commencement of Pre-Feasibility Study
  • Blencowe appoints experienced Project Manager to lead development of Orom-Cross Project in Uganda

JORC Standard Resource

A successful diamond drilling programme was completed in 2H 2021 and all assays have been completed; the Company’s technical partner Minrom is now working through a revised JORC Standard Resource which is expected for completion in the next month.

This programme was designed to infill the initial 2020 drilling programme and provide information for initial mine designs.  It is also expected to provide additional tonnes to the 16Mt already contained within the JORC Resource (Phase One) as well as deliver a higher overall in situ grade, as the high grade Camp Lode will be included for the first time.

This JORC Resource will provide enough tonnes for the first 15 years life of mine at expected mining levels, and no further drilling is therefore required prior to first production.

Blencowe notes that less than half of one percent of the overall deposit has been drilled to date, therefore the opportunity exists to substantially increase both production tonnes and life of mine via further drilling ahead once the market starts the exponential growth as forecast, to deliver considerably more tonnes of graphite for lithium-ion batteries than is currently demanded worldwide.

Stage Three Metallurgical Test Work

Samples from the 2H 2021 drill program were sent to SGS Lakeside in Toronto, Canada in 4Q 2021 and work has commenced on Stage Three metallurgical test work.  This work is expected to take around 60 days to provide final results, with the expectation that Blencowe will obtain final fact sheets for all its products as expected to be sold ahead.

This work will cover all additional properties not completed in the Stage Two (2021) metallurgical test programme, which was very successful and delivered an overall composite product of 97.3% TGC (Total Graphite Content) which is considerably higher than the entry level 94% required for battery grade graphite concentrate.  It also provided a +90% recovery rate which is high.

It will also provide critical information on impurities and other key indicators for sales and marketing.  Once completed the Company expects to work closely with its experienced Sales and Marketing advisor to identify potential offtake partners, and provide these parties with samples so the pre-qualification of end product process can start.

Sales and Marketing Strategy

The Company has been working closely with its experienced Sales and Marketing advisor, Lone Star (USA) to deliver a sales and Marketing strategy for 2022, to ultimately provide a channel for sales of graphite ahead.

Graphite is typically sold directly to end users and it is therefore important to understand the full properties of the end products prior to releasing samples to potential offtake partners for testing.  Thereafter it is expected those partners will require longer term delivery of some graphite products over a longer period to pre-qualify Orom-Cross products for consistency, and thus the Company expects to deliver a pilot plant in 2023 that will provide smaller quantities of graphite into these sales channels over a period of 18-24 months prior to the main production plant being commission in 2025.

Appointment of Country General Manager

Blencowe is pleased to note the appointment of an experienced Project Manager, Mr Nabil Alam, as its Country General Manager (Uganda) from January 2022.  Mr Alam is a Civil Engineer with considerable experience in delivering major projects into production and he has worked on major projects through EPC phase all over the world, including Europe, Africa and the Middle East, from his base in the UK.  He has now returned to live in Uganda.  His most recent project was leading the construction of a sugar co-generation plant as part of a large-scale steel project.

Mr Nabil will lead all Blencowe operations on the ground and will work closely with the Company’s senior executives to bring Orom-Cross towards first production, expected in 2023.  He has lived and worked in Uganda and therefore has deep understanding of the country and his contribution will be important to bringing the project towards delivery of first graphite ahead.

Cameron Pearce, Blencowe’s Executive Chairman commented;

“There is an enormous quantum of work underway in all areas related to the Orom-Cross Project and our team is progressing well in every aspect, continuing to value-add to this exceptional graphite project as we drive towards first production next year. 

We expect considerable news flow from all these areas as noted above during the first quarter of 2022 and all indications suggest we will continue to show that this is robust graphite project in amongst global peers.

We are especially delighted to welcome Nabil Alam into Blencowe and his experience and expertise will be vital to our success moving forward, driving operations in country as we prepare infrastructure and other areas within Orom-Cross towards first production over the medium term.” 

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 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

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 is moving into the studies phase shortly 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 16.3Mt @ 6.0% Total Graphite Content. Development of the resource is expected to benefit from a low strip ratio and free dig operations, thereby ensuring lower operating and capital costs.

Blencowe Resources #BRES – Mike Ralston discusses the fundraise and how the funds raised will be used to develop the Orom Cross graphite project

Blencowe CEO Mike Ralston discusses the oversubscribed £2m fundraise and how the funds raised will be used to develop the Orom Cross graphite project

Link here to listen 

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