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#BRES Blencowe Resources PLC – Half-year Report

The Company is pleased to announce its Interim Results for the six-month period to 31 March 2024.

Electronic copies of the report will be available at the Company’s website www.blencoweresourcesplc.com

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)203 192 1733

jonathan.evans@tavirasecurities.com

 

Interim Management Report

This report covers the period 30 September 2023 to 31 March 2024, and subsequent events to 30 April 2024.

Work has been progressing on many fronts, on four continents, as the Orom-Cross Definitive Feasibility Study “(DFS”) gathers momentum.

In September the long-awaited Technical Assistance Grant Agreement (“TAG”) was signed with the US Government’s private sector investment arm, the Development Finance Corporation (“DFC”).  This is a US$5 million grant awarded to Blencowe to assist with DFS costs and it is with pleasure I note that Blencowe is the first pre-production graphite company to receive such a grant from the US Government.  Aside from the obvious advantages of having approximately 40% of our overall DFS costs being funded for free the credibility of both our Company and our Orom-Cross project are both significantly raised by having a partner of this calibre.  Blencowe wishes to state once again our appreciation to DFC for this grant and all efforts will be made to deliver a first class DFS as a result.

To date US$3 million of this grant funding has been received as tranches are delivered on DFS milestones being achieved.  It is our expectation that the final US$2 million will be received over the next six months for further work and ultimately completion of DFS.  In addition, DFC is mandated to play a role as lead partner in a funding solution for Orom-Cross implementation ahead, and management are working closely with DFC to ensure that this will happen as substantial funding solutions remain the largest challenge for any new graphite project, so to have DFC involved adds significant weight and prestige, and a potential funding party with US$5 million skin in the game.

During this period several key milestones have been met with regards to actual DFS work.  In 2H 2023 a 100-tonne bulk sample was mined and delivered to a technical facility in northern China which is a leading expert on graphite processing, and this ore was then beneficiated into 96% LOI concentrate.  This in turn provides offtakers with the knowledge that commercial scale processing of Orom-Cross ore can deliver same high quality results as all lab-scale testing has shown to date, and secondly to provide a substantial quantum of 96% concentrate for Blencowe to send to various parties as samples, for testing and review.  Following the success of this action, and the request of several tier one potential offtake partners, Blencowe has more recently mined a further 600-tonne bulk sample and sent it to the same facility, for the same reasons.  This latest sample will also be beneficiated beyond 96% concentrate to a 99.95% uncoated SPG (spheronised, purified graphite) which is very near to what is used in the lithium-ion battery as graphite content.

Ultimately Blencowe is seeking offtake contracts and this commercial scale test work is designed to provide the samples and the results to qualify Orom-Cross product for these contracts, which themselves form an integral part of the DFS.

Other work continues within Uganda on infrastructure, community relations, environmental updates and all other key aspects of the DFS, and Blencowe remains working towards end-2024 as the delivery date for the DFS – subject to all necessary funding received to deliver as such.

Specialist technical work has also been underway in this period in the USA, considering the beneficiation of Orom-Cross concentrates to various high end products, up to 99.99% which is military grade.  To date all work has been successful and provided evidence Orom-Cross has one of the most pure concentrates and upgraded products and this will bode well in future offtake discussions.

Despite all of this progress the Company is facing macro-challenges and the UK market remains flat, which has a direct impact on both the share price and market value.  Blencowe will continue to market its achievements and remains positive on the medium and longer term outlook for graphite.  We will continue to build our project and add value as this will ultimately be significant as demand continues to rise, while supply of graphite (particularly high quality) remains static.

We thank our shareholders and other stakeholders for their continued support and we look forward to continuing to kick goals ahead to deliver the DFS and success for the Company.

Mike Ralston

Chief Executive Officer

Responsibility Statement of the Directors in respect of the Interim Report

The Directors are responsible for preparing the Interim Financial Statements in accordance with applicable law and regulations. In addition, the Directors have elected to prepare the Interim Financial Statements in accordance with International Financial Reporting Standards (“IFRSs”), as adopted by the United Kingdom (“UK”).

The Interim Financial Statements are required to give a true and fair view of the state of affairs of the Group and of the profit or loss of the Group for that period.

In preparing these Interim Financial Statements, the Directors are required to:

·    select suitable accounting policies and then apply them consistently;

·    present information and make judgements that are reasonable, prudent and provides relevant, comparable and understandable information;

·    provide additional disclosures when compliance with the specific requirements in IFRS is insufficient to enable users to understand the impact of particulars transactions, other events and conditions on the entity’s financial position and financial performance; and

·    make an assessment of the Group’s ability to continue as a going concern.

The Directors are responsible for keeping proper accounting records that are sufficient to show and explain the Group’s transactions and disclose with reasonable accuracy at any time its financial position of the Group to enable them ensure that the financial statements comply with the requirements of the Companies Act 2006. They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.

The Directors are responsible for the maintenance and integrity of the corporate and Interim Financial Statements.  Legislation governing the preparation and dissemination of Interim Financial Statements may differ from one jurisdiction to another.

We confirm that to the best of our knowledge:

·      the Interim Financial Statements, prepared in accordance with International Financial Reporting Standards as adopted by the UK, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group for the period;

·      the Director’s report includes a fair review of the development and performance of the business and the position of the group, together with a description of the principal risks and uncertainties that they face; and

·    the interim report and financial statements, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the group’s performance, business model and strategy.

Consolidated Statement of Comprehensive Income for the six month period ended 31 March 2024

6 months ended

31 Mar 2024

6 months ended

31 Mar 2023

12 months ended

30 Sep 2023

(Unaudited)

(Unaudited)

(Audited)

Exploration costs

(23,669)

(16,642)

(53,347)

Administrative fees and other expenses

5

(682,486)

(446,424)

(1,298,872)

Operating loss

(706,155)

(463,066)

(1,352,219)

Finance costs

(19,685)

(23,010)

(45,748)

Loss before tax

(725,840)

(486,076)

(1,397,967)

Income tax

Loss after tax

(725,840)

(486,076)

(1,397,967)

Other comprehensive income

Exchange differences on translation of foreign operation

64,153

7,807

31,282

Other comprehensive income, net of tax

64,153

7,807

31,282

Total comprehensive loss

(661,687)

(478,269)

(1,366,685)

Basic and diluted loss per share (pence)

10

(0.31)

(0.28)

(0.70)

There was no other comprehensive income for the period ended on 31 March 2024.

The accompanying notes on form an integral part of the Interim Financial Statements.

Consolidated Statement of Financial Position as at 31 March 2024

As at

31 Mar 2024

As at

31 Mar 2023

As at

30 Sept 2023

(Unaudited)

(Unaudited)

(Audited)

Notes

GBP

GBP

GBP

Non-Current Assets

6

7,061,967

7,065,820

7,604,564

Current assets

Trade and other receivables

7

113,470

135,901

31,863

Cash and cash equivalents

444,991

130,740

129,853

Total current assets

558,461

266,641

161,716

Total assets

7,620,428

7,332,461

7,766,280

Current liabilities

Creditors: Amounts falling due within one year

8

(1,238,944)

(414,843)

(1,076,169)

Total current liabilities

(1,238,944)

(414,843)

(1,076,169)

Non-current liabilities

Surface liabilities

9

(783,549)

(785,520)

(818,915)

Total liabilities

(2,022,493)

(1,200,363)

(1,895,084)

Net assets

5,597,935

6,132,098

5,871,196

Equity

Share capital

12

1,377,801

1,275,066

1,338,566

Share premium

12

8,986,590

8,099,579

8,637,399

Warrants reserves

428,342

402,148

428,342

Translation reserve

94,892

7,264

30,739

Retained earnings

(5,289,690)

(3,651,959)

(4,563,850)

Total equity

5,597,935

6,132,098

5,871,196

 

The accompanying form an integral part of the Interim Financial Statements.

Share capital

Share premium

Share option reserves

Retained earnings

Translation reserve

Total equity

GBP

GBP

GBP

GBP

GBP

GBP

Balance as at 30 Sep 2022

1,181,316

7,480,829

402,148

(3,165,883)

(543)

5,897,867

Total comprehensive loss for 6 months

Loss for the period

(486,076)

(486,076)

Total comprehensive loss

(486,076)

(486,076)

Contributions from equity holders

New shares issued

93,750

656,250

750,000

Share issue costs

(37,500)

(37,500)

Exchange differences on translation

7,807

7,807

Total contributions from equity holders

93,750

618,750

7,807

720,307

Balance as at 31 Mar 2023

1,275,066

8,099,579

402,148

(3,651,959)

7,264

6,132,098

Total comprehensive loss for 6 months

Loss for the period

(911,891)

(911,891)

Total comprehensive loss

(911,891)

(911,891)

Contributions from equity holders

New shares issued

63,500

571,500

635,000

Share issue costs

(33,680)

(33,680)

Warrants reserve

Exchange differences on translation of foreign operations

26,194

23,475

49,669

Total contributions from equity holders

63,500

537,820

26,194

23,475

650,989

Balance as at 30 Sep 2023

1,338,566

8,637,399

428,342

(4,563,850)

30,739

5,871,196

Consolidated Statement of Changes in Equity for the six month period ended 31 March 2024 

Total comprehensive loss for 6 months

Loss for the period

(725,840)

(725,840)

Total comprehensive loss

(725,840)

(725,840)

Contributions from equity holders

New shares issued

39,235

353,115

392,350

Share issued costs

(3,924)

(3,924)

Exchange differences on translation of foreign operations

64,153

64,153

Total contributions from equity holders

39,235

349,191

64,153

452,579

Balance as at 31 Mar 2024

1,377,801

8,986,590

428,342

(5,289,690)

94,892

5,597,935

The accompanying notes on form an integral part of the Interim Financial Statements.

Consolidated Statement of Cash Flows for the six month period ended 31 March 2024

As at

31 Mar 2024

As at

31 Mar 2023

As at

30 Sept 2023

(Unaudited)

(Unaudited)

(Audited)

Notes

GBP

GBP

GBP

Operating activities

Loss after tax

(725,839)

(486,076)

(1,397,967)

Depreciation

104

Finance costs

19,685

23,010

45,748

Adjustment to Surface Liability

Share issue/warrant cost

26,194

Unrealised currency translation

126,864

261,566

182,264

Changes in working capital

Decrease/(increase) in trade and other receivables

7

(81,607)

(50,054)

53,984

Increase/(decrease) in trade and other payables

8

162,775

(39,568)

272,664

Net cash flows from operating activities

(498,122)

(291,018)

(817,113)

Investment activities

Purchase of fixed assets

(748)

Investment in exploration assets

(1,175,345)

(621,988)

(713,848)

Net cash flows from investment activities

(1,175,345)

(622,736)

(713,848)

Financing activities

DFC Government grant

6

1,600,178

Shares issued (net of issue cost)

388,427

697,500

1,313,820

Net cash flows from financing activities

1,988,605

697,500

1,313,820

Increase in cash and short-term deposits

315,138

(216,254)

(217,141)

Cash and short-term deposits brought forward

129,853

346,994

346,994

Cash and cash equivalents at end of period

444,991

130,740

129,853

The accompanying notes form an integral part of the Interim Financial Statements.

Notes to the Financial Statements for the six month period ended 31 March 2024

1.   General

Blencowe Resources Plc (the “Company”) is a public limited company incorporated and registered in England and Wales on 18 September 2017 with registered company number 10966847 and its registered office situated in England and Wales at 167-169 Great Portland Street, Fifth Floor, London, England W1W 5PF.

The Group did not earn any trading income during the period under review but incurred expenditure in developing its principal assets.

The Consolidated Interim Financial Statements of the Company for the six month period ended 31 March 2024 comprise the financial statements of the Company and its subsidiaries (together referred to as the “Group”).

2.   Accounting Policies

Basis of preparation

The Interim Financial Statements of the Group are unaudited condensed financial statements for the six month period ended 31 March 2024.

The accounting policies applied by the Group in these Interim Financial Statements, are the same as those applied by the Group in its consolidated financial statements and have been prepared on the basis of the accounting policies applied for the financial year to 30 September 2023 which have been prepared in accordance with IFRS as adopted by UK. The Group Financial Statements have been prepared using the measurement bases specified by IFRS each type of asset, liability, income and expense.

The Group Financial Statements are presented in GBP, which is the Group’s functional currency. All amounts have been rounded to the nearest pound, unless otherwise stated.

Government grants

This is the first reporting period the Group is recognising government grants. Government grants are recognized once the entity has complied with conditions attaching to them and they have been received. Governments grants are accounted for using the capital approach under which a grant is recognized outside the profit and loss. Government grants related to assets, are presented in the statement of financial position by deducting the grant in arriving at the carrying amount of the asset. The grant is recognized in profit or loss over the life of a depreciable asset as a reduced depreciation expense.

Comparative figures

The comparative figures have been presented as the Group Financial Statements cover the 6 month period ended 31 March 2023 and the 12 month period ended 30 September 2023. During 2024, the Group discovered that share premium had been erroneously classified as share capital and administration expenses captured as share issue costs for interim accounts as at 31 March 2023. Refer to Note 12.

3.   Critical accounting estimates and judgments

In preparing the Group’s Interim Financial Statements, the Directors have to make judgments on how to apply the Group’s accounting policies and make estimates about the future. The Directors do not consider there to be any critical judgments that have been made in arriving at the amounts recognised in the Group Financial Statements.

4.   Significant accounting policies

The accounting policies adopted are consistent with those followed in the preparation of the annual financial statements of Blencowe Resources Plc for the year ended 30 September 2023.  A copy of these financial statements is available on the Group website at https://blencoweresourcesplc.com.

5.   Administrative fee and other expenses

6 months ended

 31 Mar 2024

6 months ended

31 Mar 2023

12 Months ended

30 Sep 2023

(Unaudited)

(Unaudited)

(Audited)

GBP

GBP

GBP

Directors’ remuneration

69,857

70,023

140,051

Professional fees

80,001

121,692

226,471

Salaries

75,000

75,000

150,000

Listing fees

20,933

18,218

41,123

Audit fees

33,498

21,644

35,000

Share issue/warrant cost

26,194

Administration fees

23,500

23,500

47,000

Sponsorship

5,690

Broker fees

18,434

20,500

41,000

Travelling expenses

11,034

7,959

16,852

Ugandan taxes

342,751

392,425

Miscellaneous fees

4,445

87,888

72,625

Royalties

1,244

Foreign currency (gain)/loss

(3,901)

110,131

Total

682,486

446,424

1,298,872

The Group had two employees who are key management personnel and three Directors. The Directors and the key management personnel’s remuneration related solely to short term employee benefits.

6.   Non-Current assets

For the period ended 31 March 2024 intangible assets represents capitalised costs associated with the Group’s exploration, evaluation and development of mineral resources net of any Government grants received.

6 months ended

31 Mar 2024

(Unaudited)

GBP

6 months ended

31 Mar 2023

(Unaudited)

GBP

12 months ended

30 Sept 2023

(Audited)

GBP

Exploration assets

8,662,145

7,065,176

7,604,564

Property, Plant and Equipment

644

Grant from US Government (Refer below)

(1,600,178)

Total

7,061,967

7,065,820

7,604,564

The company signed a US$5 million agreement with the U.S. International Development Finance Corporation (“DFC”) in order to provide substantial funding for the Orom Cross Definitive Feasibility Study programme, via a Technical Assistance Grant (“TAG”).  The DFC is a proxy for the US Government which funds the organisation and ultimately sets its vision, parameters and funding distribution. DFC payments will be made as agreed feasibility study milestones are achieved. As part of the US$5 million Technical Assistance Grant (“TAG”) the DFC has a right of first refusal on commercial terms to arrange project financing for the Orom-Cross project, which may deliver Blencowe with a full funded solution to bring Orom-Cross into production with support from a major financial institution. The agreement is subject to various events of default.

7.   Trade and other receivables

6 months ended

 31 Mar 2024

6 months ended

31 Mar 2023

12 Months ended

30 Sep 2023

(Unaudited)

(Unaudited)

(Audited)

GBP

GBP

GBP

Other receivables

35,166

21,526

9,421

Prepayments

78,304

114,375

22,442

Total

113,470

135,901

31,863

8.   Creditors: Amounts falling due within one year

6 months ended

 31 Mar 2024

6 months ended

31 Mar 2023

12 Months ended

30 Sep 2023

(Unaudited)

(Unaudited)

(Audited)

GBP

GBP

GBP

Payables

707,912

103,980

644,585

Surface liabilities (Note 9)

143,036

Accruals and provision

194,352

167,827

39,159

Ugandan taxes

336,680

392,425

Total

1,238,944

414,843

1,076,169

9.   Surface liabilities

Blencowe Resources Uganda Limited, the Company’s subsidiary entered into an agreement for surface rights over the land in the mineral area of the licence. The land owners granted Blencowe Resources Uganda Limited a 49 year lease over an area. The liability to the land owners is to be paid in 8 instalments at defined dates with the final payment due in 2035.

6 months ended

 31 Mar 2024

6 months ended

31 Mar 2023

12 Months ended

30 Sep 2023

(Unaudited)

(Unaudited)

(Audited)

GBP

GBP

GBP

Total payable at the beginning of the period

818,915

978,255

978,255

Utilisation

(148,468)

Interest charged during the period

19,685

23,010

45,748

Exchange loss on valuation

(55,051)

(72,709)

(56,620)

Total payable as at period end

783,549

928,556

818,915

Analysis between current and non-current liability

Payable within 12 months

143,036

Payable after 12 months

783,549

785,520

818,915

783,549

928,556

818,915

The value of the lease is measured at the present value of the contractual payments due to the lessor

over the lease term, with the discount rate of 5%.

10. Loss per share

The calculation of the basic and diluted loss per share is based on the following data:

6 months ended

 31 Mar 2024

6 months ended

31 Mar 2023

12 Months ended

30 Sep 2023

(Unaudited)

(Unaudited)

(Audited)

Earnings

GBP

GBP

GBP

Loss from continuing operations for the period attributable to the equity holders of the Group

(661,687)

(478,269)

(1,397,967)

Number of shares

Weighted average number of Ordinary Shares for the purpose of basic and diluted earnings per share

210,540,876

168,803,923

200,041,594

Basic and diluted loss per share (pence)

(0.31)

(0.28)

(0.70)

There are no potentially dilutive shares in issue.

11. Related party transactions

The are no related party transactions during the period except for the Directors’ remuneration, which have been disclosed in note 5.

Sam Quinn is a director and shareholder of the Company and a Director of Lionshead Consultants Limited.  During the period, Lionshead Consultants Limited charged fees for consultancy fees of £18,000 (31 March 2023: £18,000 and 30 Sep 2023: £36,000).

12. Reclassification

During 2024, the Group discovered that share premium had been erroneously classified as share capital and administration expenses captured as share issue costs for interim accounts as at 31 March 2023. These errors has been corrected by restating each of the affected financial statement line items for prior periods. The following table summarises the impact on the Group’s consolidated accounts.

Impact of reclassification

As previously reported

Restatement

As restated

GBP

GBP

GBP

Total assets

7,332,461

7,332,461

Total liabilities

(1,215,363)

15,000

(1,200,363)

Net assets

6,117,098

15,000

6,132,098

Share capital

1,931,316

(656,250)

1,275,066

Share premium

7,428,329

671,250

8,099,579

Warrants reserve

402,148

402,148

Translation reserve

7,264

7,264

Retained earnings

(3,651,959)

(3,651,959)

Total Equity

6,117,098

15,000

6,132,098

There is no material impact on the Group’s basis or diluted earnings per share and no impact on the total operating, investing or financing cashflows for the half year ended 31 March 2023.

13. Events after the reporting date

On 10 April 2024, the Company announced the receipt of its third tranche US$1 million funding from the United States International Development Finance Corporation (“DFC”).  This payment, representing a further 20% of the full US$5 million DFC grant further supports the ongoing Orom-Cross Definitive Feasibility Study (“DFS”) costs, bringing the total received to US$3 million since the agreement was signed in Sept 2023. The DFC is the primary US Government finance institution set up to provide financially sound solutions for private sector initiatives pertaining to critical challenges facing the world.

Blencowe Resources #BRES – Alan Green talks to MD Mike Ralston

Alan Green talks to Blencowe Resources #BRES MD Mike Ralston. We cover progress with the DFS and the recent Orom Cross graphite testing in China before covering today’s maiden offtake agreement with Chinese graphite giant Jilin for the large flake product. Mike then discusses the plans for pilot plant production could commence at Orom Cross in 2026, plus other potential deals offtake partners and graphite producers and comparisons to peer group. We then discuss funding from an investor network in Africa, and the $5m package from the US Government’s International Development Finance Corporation, before Mike gives a heads up on likely events in the coming months.

#BRES Blencowe Resources PLC – CEO Video Interview

Blencowe Resources (BRES:LON), is pleased to share two recent interviews with CEO Mike Ralston on the Focus Communications IR and Mining News platforms:

Interview with Focus IR:

“Mike Ralston, CEO of Blencowe, outlines plans to become one of the world’s largest graphite producers”

https://www.youtube.com/watch?v=JnnCkdCPfT0

Interview with Mining News:

“Blencowe building on mining-to-battery plan at the Orom-Cross graphite project”

https://www.miningnews.net/resourcestocks/resourcestocks/4213348/blencowe-building-mining-battery-plan-graphite-project

Executive Chairman Cameron Pearce commented:

Blencowe recently recorded video interviews on the media platforms linked above to provide investors with further detail following a successful management trip to Asia. In China we visited Jilin Huiyang New Material Technology Company which is currently undertaking processing of a 600 tonne bulk sample of small flake graphite from Orom-Cross. This effort aims to produce commercial scale processed samples for a range of tier-1 offtakers in both China and South Korea, who have shown significant interest in high-quality processed product from Orom-Cross, especially smaller sized flakes suitable for SPG processing for the battery industry, including Electric Vehicles. Investors should note that prequalification of product with industry buyers is a crucial step for any serious graphite miner, and Blencowe is well advanced on this route.

In addition to the small flake graphite, we have received positive feedback on large flake graphite samples from Orom-Cross from other potential offtake parties, with larger flake graphite typically commanding premium prices.

During our trip, we also met with various EPC groups and Chinese strategics to advance our in-country downstream SPG processing strategy. We believe that adding local Ugandan downstream SPG processing facilities will enable us to capture more of the downstream value chain and significantly enhance Orom-Cross’s already compelling economics. This will also substantially differentiate Blencowe from its graphite peers.  So far, test work in China has been progressing positively, as have discussions regarding potential offtake MOUs and strategic partnerships for downstream SPG processing.

We anticipate further updating the market on the progress of our test work and the interest from potential offtakers in the coming weeks.

For further information please contact:

Blencowe Resources Plc

Sam Quinn (London Director) 

www.blencoweresourcesplc.com

info@blencoweresourcesplc.com

+44 (0)1624 681 250

Investor Enquiries

Sasha Sethi

Tel: +44 (0) 7891 677 441

sasha@flowcomms.com 

Tavira Financial

Jonathan Evans

Tel: +44 (0)20 7100 5100 

jonathan.evans@tavira.group

Twitter https://twitter.com/BlencoweRes
LinkedIn https://www.linkedin.com/company/blencowe-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.  Blencowe completed a successful Pre-Feasibility Study on the Project in July 2022 and is now within the Definitive Feasibility Study phase as it drives towards first production.

Orom-Cross presents as a large, shallow open-pitable deposit, with an initial JORC Indicated & Inferred Mineral Resource of 24.5Mt @ 6.0% TGC (Total Graphite Content). This Resource has been defined from only ~2% of the total tenement area which presents considerable upside potential ahead.  Development of the resource is expected to benefit from a low strip ratio and free dig operations together with abundant inexpensive hydro-electric power off the national grid, thereby ensuring low operating costs.  With all major infrastructure available at or near to site the capital costs will also be relatively low in comparison to most graphite peers.

Blencowe Resources #BRES – Third tranche US$1 million Grant Funding received from US International Development Finance Corporation

Blencowe Resources Plc (LSE: BRES) is pleased to announce the receipt of its third tranche US$1 million funding from the United States International Development Finance Corporation (“DFC”).  This payment, representing a further 20% of the full US$5 million DFC grant further supports the ongoing Orom-Cross Definitive Feasibility Study (“DFS”) costs, bringing the total received to US$3 million since the agreement was signed in Sept 2023.

Key Milestones Achieved Driving DFS Progress:

·    Completion of SPG (spheronised, purified graphite) coating test work and waste composite flake test work studies.

·    Initiation of a commercial study into a downstream processing facility to deliver 99.95% uncoated SPG, located in Uganda.

·    Completion of expandability test work by leading US graphite technical expert.

Blencowe successfully completed all of the above milestones to achieve this latest disbursement of DFC funds, with results continuing to highlight Orom-Cross as a standout graphite project with unique characteristics.

The successful coating of SPG product marks a crucial step towards product qualification, positioning Orom-Cross favourably with tier-1 offtakers. Additionally, achieving success in expandability testing enhances the potential for high value niche sales for large flake products which could drive the bulk of Orom-Cross revenues in the future.

Blencowe is exploring the potential establishment of a downstream processing facility in Uganda to further upgrade the purity of the Company’s graphite from a 96% concentrate to 99.95% uncoated SPG.  This transformation would elevate the value of the lowest value small flake concentrate from approximately $600/tonne to around $2,500/tonne, setting Orom-Cross apart from its peers and meeting significant demand for a 99.95% graphite product range sourced from outside China.  Although still in its early stages, this strategy promises significant value addition with commercial studies underway assessing its integration into the core Orom-Cross production strategy.

Blencowe remains actively engaged with potential offtake partners worldwide, fostering relationships with tier-1 offtakers who are evaluating product samples constantly.  Blencowe’s CEO and COO will travel to China and South Korea over the next few weeks to further these discussions and to establish key offtake relationships.

Cameron Pearce, Executive Chairman commented;

“I would like to thank DFC for their ongoing support, they are an outstanding project partner and we are able to accelerate the pace of our studies with their assistance.  Our DFS results underscore what an exceptional graphite project Orom-Cross is, including its size and scale, low operating costs, low capital start-up costs and high quality purified end products which are building interest with key offtakers and end users.  We are committed to adding value wherever possible to ensure that our DFS delivers a standout result ahead.”

Mr Pearce added “Blencowe is making significant strides with the feasibility study as evidenced in this latest disbursement from DFC.  We are confident in the continued expansion of the natural flake graphite market and we aim to be one of the few projects that successfully navigates both the qualification and funding processes to achieve production status 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 Financial 

Jonathan Evans

Tel: +44 (0)20 3192 1733

jonathan.evans@tavira.group

 

 

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.  Blencowe completed a successful Pre-Feasibility Study on the Project in July 2022 and is now within the Definitive Feasibility Study phase as it drives towards first production.

Orom-Cross presents as a large, shallow open-pitable deposit, with an initial JORC Indicated & Inferred Mineral Resource of 24.5Mt @ 6.0% TGC (Total Graphite Content). This Resource has been defined from only ~2% of the total tenement area which presents considerable upside potential ahead.  Development of the resource is expected to benefit from a low strip ratio and free dig operations together with abundant inexpensive hydro-electric power off the national grid, thereby ensuring low operating costs.  With all major infrastructure available at or near to site the capital costs will also be relatively low in comparison to most graphite peers.

Buy Blencowe Resources #BRES with a 73p price target says First Equity

Buy Blencowe Resources #BRES says First Equity Ltd
The securing of a $5m grant from the DFC is a commendable achievement for Blencowe and significantly reduces financing risks at Orom Cross. We have re-calibrated the PFS published last year from a NPV8 to NPV10 to reflect a higher cost of borrowing world (from $482m to $402m) and applied certain development/resource (30%), finance (12%) and country (25%) risk factors. The impact of the DFC grant and potential for it to lead to securing project construction funds has resulted in our finance risk being slashed from 40% to 12%. By applying all these risk factors to our NPV10, we calculate a valuation of $185.7m, an increase of 46% on our previous $126.5m estimate.
Using the current no of shares in issue and 100% project interest this would imply a price per share of 73p (prev. 59p). If we factor in the impact of possible share dilution over the next 24-months, we arrive at a 46p valuation

#BRES Blencowe Resources PLC – DFC Grant Completed

Orom-Cross is the first pre-production graphite project to achieve support from the Development Finance Corporation (“DFC”), a USA government backed finance provider

DFC to co-fund the Definitive Feasibility Study (“DFS”) and also be lead partner for the project financing of the Orom-Cross into production

Highlights:

  • Ground-breaking technical assistance agreement signed with tier one financial institution to provide Blencowe with significant funding for DFS programme.
  • US$5 million to be input by the DFC as a grant, with a 20% upfront contribution (US$1 million) to be paid immediately.
  • Further DFC payments will be made upon as-agreed feasibility study milestones being achieved.
  • DFC is the United States of America’s (“US”) leading development finance institution that partners with the private sector to provide finance solutions for project development in markets deemed as critical to US interests.
  • DFC is geared to provide funding assistance for Orom-Cross as part of the US Government’s strategic drive to secure a reliable supply chain of critical minerals and metals, within its wider US$1 trillion Biden-renewables strategy.
  • As part of the US$5 million Technical Assistance Grant (“TAG”) the DFC has a right of first refusal on commercial terms to arrange project financing for the Orom-Cross project, which may deliver Blencowe with a potential full funded solution to bring Orom-Cross into production with support from the tier 1 major financial institution.
  • The DFC partnership opens up the potential for Blencowe to consider a larger scale project with potentially far greater returns within the DFS. This will have material ramifications on overall Orom-Cross project value ahead.

 

Blencowe Resources Plc (“Blencowe” or the “Company”) (LSE: BRES) is pleased to announce it has signed a US$5 million agreement with the DFC in order to provide substantial funding for the Orom Cross DFS programme, via a Technical Assistance Grant.  The DFC is a proxy for the US Government which funds the organisation and ultimately sets its vision, parameters and funding distribution.

Cameron Pearce, Executive Chairman commented;

“This funding relationship with the DFC is a unique and game-changing event for Blencowe. To the best of our knowledge there has been no other graphite project worldwide that has received a similar type grant to date from the DFC.  We appreciate and we value this support and we will do everything we can to build their trust within this relationship, to ensure we deliver a high quality project together.

 

We believe that that having DFC as our strategic project partner substantially de-risks Orom-Cross and provides us with the means to deliver a world class project from here.  Blencowe presented an excellent US$482 million NPV for Orom-Cross within the Pre-Feasibility Study last year but we are now optimistic that we can deliver an even greater value NPV within the Definitive Feasibility Study as we can expand the project horizons. 

 

With the support of the DFC, we can address one of the major challenges and risks to any mining being the clear pathway to fund the project into production. We now have the opportunity to build the Orom-Cross project into a world class project with the comfort of a world class strategic partner.

 

Graphite demand is rising fast and will continue to do so.  It is one of the under-rated but key components of the lithium-ion battery and it is irreplaceable in this regard.  As such any future anticipated surge in demand for these batteries, not just for electric vehicles but for energy storage in all other renewable capacities, will continue to accelerate demand for graphite.  We now have the means to deliver one of the leading graphite projects in the world and a highly incentivised tier one strategic partner with whom we will work with to do that.”

 

DFC Technical Assistance Grant (TAG)

This is an innovative funding mechanism for the DFC to become involved at an early stage with key projects that they consider to be within their direct scope and strategy.  As Orom-Cross contains an estimated 2-3 billion tonnes of graphite and is one of the largest, high quality deposits worldwide it has considerable long term appeal to the DFC.  Graphite remains high on the US Government critical metals and minerals list, hence this relationship with Blencowe opens a potential supply chain for high value end-product over a very long life of mine.

DFC has been working closely with Blencowe through this TAG process and both the Company and the Orom-Cross project have been subjected to all necessary due diligence in order to progress DFC interest into this monetised initial funding solution.  Both parties see considerable long term value in their association with one another and Blencowe is confident this relationship will assist to provide a larger project funding solution ahead.  One of the key terms within the TAG Agreement is for DFC to be mandated to provide financing for the full Orom-Cross project on commercial terms.

Prospective new graphite producers need to think outside the box to find innovative funding solutions in order to deliver their projects and the DFC relationship provides this for Orom-Cross.  Not only does the US$5 million grant cover a significant portion of the DFS costs, which materially reduces the dilutionary impact to Blencowe of funding the full DFS itself, but it also provides a highly motivated full mine implementation funding partner ahead.  Furthermore, the credibility associated with partnering one of the leading tier one financial institutions worldwide will open a variety of other relationships ahead as key players in the graphite market (including end user OEMs) can see a new high quality graphite project emerging that now has a more certain pathway to production.

Blencowe will immediately request the upfront payment of the initial 20% of the TAG (US$1 million), which together with the Company’s existing funds provides the means to continue DFS work underway and deliver the next as-agreed milestone payment with DFC.  Once this next milestone is achieved further DFC funds are unlocked and so on, until the full grant is utilised and ultimately the DFS is completed.

One substantial advantage that now comes into play with the DFC relationship is that Blencowe is able to consider a larger-scale production strategy than it could do under the base-case scenario that the Company was considering whilst funding solo.  The implications of this are enormous and the Company will provide a further update on this once the revised strategy is finalised.  The expectation would be for a larger project from day one with a downstream processing facility built in-country to produce an uncoated battery-ready 99.95% SPG product.  These factors above will ultimately deliver a considerably higher Net Present Value than the US$482 million NPV achieved within the 2022 Pre-Feasibility Study.

About International Development Finance Corporation

The DFC is the primary US Government finance institution set up to provide financially sound funding solutions for private-sector initiatives pertaining to critical challenges facing the world, in this case the drive towards increased sustainability across the planet.  It is an agency of the United States federal government and represents US interests.

DFC’s lending capacity is used to provide loans, guarantees, equity investments and political-risk insurance for private-sector led development projects, feasibility studies and technical assistance.  DFC invests across several sectors with stated goals of empowerment, innovation, investment into Africa, green energy and climate change.

Orom-Cross is directly linked with several of these goals.  This project may ultimately become one of the largest graphite producing operations in the world over a very long mine life, delivering an end-product in a sustainable manner which is a non-replaceable input component to lithium-ion batteries.  Demand for graphite is accelerating at a rate where it is doubling every few years, and is expected to continue growing exponentially into the future.  Graphite is therefore high on the US Government critical metals and minerals list and assisting to open up long term supply chain of graphite is a key strategy.

Orom-Cross will also deliver a ‘green’ graphite product through a variety of production initiatives, including the use of hydro-electric power for all mining and processing energy requirements.  Orom-Cross aims to become one of the leading sustainable mining projects worldwide and this is a very important component of the DFC charter and critical within a rapidly changing landscape where every participant along the EV supply chain will be audited on their sustainability credentials by OEMs.

Orom-Cross’s potential ability to aid in the further development of the Ugandan economy, empowering its population and driving investment and future development has also proved attractive to the DFC.

 

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.  Blencowe completed a successful Pre-Feasibility Study on the Project in July 2022 and is now within the Definitive Feasibility Study phase as it drives towards first production.

Orom-Cross presents as a large, shallow open-pitable deposit, with an initial JORC Indicated & Inferred Mineral Resource of 24.5Mt @ 6.0% TGC (Total Graphite Content). This Resource has been defined from only ~2% of the total tenement area which presents considerable upside potential ahead.  Development of the resource is expected to benefit from a low strip ratio and free dig operations together with abundant inexpensive hydro-electric power off the national grid, thereby ensuring low operating costs.  With all major infrastructure available at or near to site the capital costs will also be relatively low in comparison to most graphite peers.

#BRES Blencowe Resources PLC – Bulk Sampling Update & China Visit

Highlights:

·    Blencowe has successfully completed a critical component of the Definitive Feasibility Study (“DFS”), with the successful scaled commercialisation of the flowsheet within the bulk sample processing at Chinese pilot plant graphite production facility.

·    Results continue to highlight a high-grade, low impurity concentrate can be delivered in bulk from Orom-Cross.

·    Several meetings held with leading Chinese graphite offtake firms seeking both large flake and fines concentrates.

·    Ugandan mining officials visited China with Blencowe and were shown the process facility in support of the project.

·    Blencowe now approached for downstream processing opportunities.

Blencowe Resources Plc (“Blencowe” or the “Company”), is pleased to provide an update on the 100 tonne bulk sample processing program currently underway. The work is being completed by a leading graphite technical specialist firm, Jilin New Technology, based in Yanji Province in northern China.  This experienced graphite facility has been conducting similar test work on several other leading East African graphite projects over the past few years.

The Company is expecting the bulk sample test program to be completed by the end of August.

Senior Company personnel travelled to China recently to review the progress on the bulk sample processing and broaden relationships in this key market.  Accompanying the COO was the Company’s Ugandan Country Manager and a representative of the Ugandan Directorate of Geological Survey and Mines (DGSM), with the express purpose of evaluating the progress of the processing and to demonstrate the full process for the Ugandan Government.

Following a refinement of the Pre-Feasibility Study processing methodology by Wuhan University specialists, Blencowe wished to confirm directly with the pilot plant operators the expected improvements in both overall recovery and concentrate grades and secure early samples for delivery to potential offtake partners, following a marked increase in interest for the projects’ concentrate within China. The 100 tonne pilot plant process is currently nearing completion and to date it is confirming the commercial processing viability of the Orom-Cross ores. The Company also visited operating graphite plants and graphite processing equipment suppliers.

Following the distribution of concentrate samples to potential end users from the IMO test work and Wuhan University 150kg test work, several large downstream offtake processors requested meetings to discuss timing and availability of the high-grade, low impurity concentrates from the Orom-Cross project. The offtake meetings involved firms seeking substantial quantities of both larger flake concentrates and fines feedstock for the SPG processors. Several downstream processing firms have expressed interest in opportunities to explore in-country downstream processing of the Orom-Cross concentrates and Blencowe will consider this within the DFS that is underway.

Blencowe was pleased to be able to escort a representative of the Ugandan Directorate of Geological Survey and Mines to view the final processing of the bulk sample. Blencowe invited the DGSM representative to view the process in order to continue to develop a better understanding of the processing technology involved, to foster a deeper overall understanding of the project within Uganda, and to continue to work in partnership with the Government in order to develop the project.

 

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

 

#BRES Blencowe Resources PLC – Webinar Today

Blencowe Resources (LSE:BRES), is pleased to announce that it will host a shareholder webinar and Q&A Today Tuesday 9 May 2023 at 12:00pm UK time (19:00pm WST time).

The call will be hosted by Blencowe’s CEO, Mike Ralston who will discuss the Company’s recently announced news relating to funding assistance for the further development of Blencowe’s Orom-Cross graphite project from the United States Government’s Development Finance Corporation.

Registration Details:

 

A recording of the webinar will also be made available on the Company’s website following the event. Investors are invited to register using the following link:

 

https://us02web.zoom.us/webinar/register/WN_AuIvebCoTJ-neLmgOWOaYQ

 

Shareholders who wish to do so are invited to submit questions via email to: info@blencoweresourcesplc.com

 

Latest Corporate Presentation:

 

An updated copy of the Company’s corporate presentation can be found on the Company’s website at:

https://blencoweresourcesplc.com/presentation/

 

Video Interview:

 

A link to a recent video interview Mike Ralston on the Proactive Investors platform is below:

 

https://www.proactiveinvestors.co.uk/companies/news/1013613/blencowe-resources-passes-key-milestone-with-dfc-1013613.html

 

Company Newsletter

 

Interested investors can also sign up for the Company Newsletter here:

https://blencoweresourcesplc.com/contact/

 

 

**ENDS**

Contacts

Blencowe Resources Plc

Sam Quinn (London Director)

www.blencoweresourcesplc.com

info@blencoweresourcesplc.com

+44 (0)1624 681 250

Investor Enquiries

Sasha Sethi

Tel: +44 (0) 7891 677 441

sasha@flowcomms.com

Tavira Financial

Jonathan Evans

Tel: +44 (0)20 7100 5100 jonathan.evans@tavira.group

First Equity Limited

Jason Robertson

Tel: +44 (0)20 7330 1883

jasonrobertson@firstequitylimited.com

 

#BRES Blencowe Resources PLC – Investor Webinar & Updated Presentation

Blencowe Resources (LSE:BRES), is pleased to announce that it will host a shareholder webinar and Q&A on Tuesday 9 May 2023 at 12:00pm UK time (19:00pm WST time).

The call will be hosted by Blencowe’s CEO, Mike Ralston who will discuss the Company’s recently announced news relating funding assistance for the further development of Blencowe’s Orom-Cross graphite project from the United States Government’s Development Finance Corporation.

Registration Details:

 

A recording of the webinar will also be made available on the Company’s website following the event. Investors are invited to register using the following link:

 

https://us02web.zoom.us/webinar/register/WN_AuIvebCoTJ-neLmgOWOaYQ

 

Shareholders who wish to do so are invited to submit questions via email to: info@blencoweresourcesplc.com

 

Latest Corporate Presentation:

 

An updated copy of the Company’s corporate presentation can be found on the Company’s website at:

https://blencoweresourcesplc.com/presentation/

 

Video Interview:

 

A link to a recent video interview Mike Ralston on the Proactive Investors platform is below:

 

https://www.proactiveinvestors.co.uk/companies/news/1013613/blencowe-resources-passes-key-milestone-with-dfc-1013613.html

 

Company Newsletter

 

Interested investors can also sign up for the Company Newsletter here:

https://blencoweresourcesplc.com/contact/

 

Contacts

Blencowe Resources Plc

Sam Quinn (London Director)

www.blencoweresourcesplc.com

info@blencoweresourcesplc.com

+44 (0)1624 681 250

Investor Enquiries

Sasha Sethi

Tel: +44 (0) 7891 677 441

sasha@flowcomms.com

Tavira Financial

Jonathan Evans

Tel: +44 (0)20 7100 5100 jonathan.evans@tavira.group

First Equity Limited

Jason Robertson

Tel: +44 (0)20 7330 1883

jasonrobertson@firstequitylimited.com

#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.

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