Tag Archives: Blencowe Resources

Blencowe Resources Plc (“Blencowe Resources” or the “Company”) (LSE: BRES), the natural resources company focussed on the development of the Orom-Cross Graphite Project in Uganda, is pleased to announce that it has raised £635,000 at 5 pence per share (“Placing”) through the issue of 12,700,000  new ordinary shares of 0.5p (“Placing Shares”). The Company will issue investors in the Placing with 1 warrant per 2 Placing Shares (Investor Warrants”) which are exercisable at 8p for a period of 3 years from Admission of the Placing Shares.   

Use of Funds

The net proceeds of the Placing will be used to maintain momentum on the Definitive Feasibility Study (“DFS”) work, which has been underway since start of 2023, and is managed by leading firm CPC Engineering.

The Company recently announced it had passed the key screening hurdles by the Development Finance Corporation (“DFC”) regarding a US$4.5M Technical Assistance Grant (“TAG”) to fund 50% of the DFS. The Company expects to complete the process of obtaining the TAG with DFC over the coming weeks and then be able to draw down funds for the DFS work. The net proceeds allows the Company to avoid any immediate delay to the DFS programme whilst the DFC grant is being finalised.

In parallel, the Company awaits results from its metallurgical testing programs in both China and the United States of America. In January 2023 the Company delivered 20kgs of concentrate to technical experts in Wuhan University of Technology in China and 5kgs to American Energy Technologies Co. for SPG and expandables testing. A further 100 tonnes bulk sample has been extracted and is in transit to Jilin Huiyang New Material Technology Company, with results expected to reconfirm historic results of IMO testing in Perth, which demonstrated concentrates from Orom-Cross is of consistently high quality. The net proceeds will enable the Company to accelerate these discussions.

Related Party Transaction

RAB Capital, Jangada Mines plc and JUB Capital are considered related parties on the basis their respective holdings are greater than 5%. The major shareholders participated in the Placing which is deemed a related party transaction as defined under DTR 7.3. The Board considers their participation in the Placing are fair and reasonable insofar as the Company’s shareholders are concerned having taken financial advice from its financial adviser Tavira Financial Ltd given the Board does not have an independent director.

Admission

An application has been made for 12,700,000 Ordinary Shares to be admitted to trading on the official list and the London Stock Exchange from 8.00 a.m. on 23 May 2023 (“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 209,379,950 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.

Cameron Pearce Executive Chairman commented:

 “We are very pleased to secure additional funding to continue the DFS work programmes without delay. The DFC grant should be completed in the near future and the Company is focused on maintaining the momentum to optimise the benefits of this.

Securing the support of a tier one financial institution such as the DFC provides the Project and our Company with a high degree of credibility and we are working through the process with the DFC so that they may formally join as our partner on the balance of the DFC work.

At the same time we are making progress on our metallurgical studies in China and the US, with initial results expected in the near term. A favourable outcome in the test work has the potential to ultimately provide a funding solution for Orom-Cross to first production.

I look forward to providing further updates in the coming weeks.”

For further information please contact:

Twitter https://twitter.com/BlencoweRes

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

Background

Orom-Cross Graphite Project

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

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

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

Blencowe Resources Plc (“Blencowe” or the “Company”) (LSE: BRES) is pleased to announce it has passed the key Screening hurdle within the DFC in order to move forward to secure a substantial Technical Assistance Grant.

The process now moves to a Grant Agreement and other final requirements to complete this funding solution.  The TAG under consideration for Orom-Cross is up to US$4.5M for costs associated with the Definitive Feasibility Study and the terms are considered advantageous to Blencowe as any repayment would only occur if and when the project goes into production at a future date.  The TAG provides for DFC to pay 50% of agreed costs within the Orom-Cross DFS, with Blencowe to provide the remainder.

Once consummated this relationship could also provide Orom-Cross with a potential project funding solution as the TAG will require a ROFR for debt on commercial terms for full project implementation.  Debt funding to build a mining operation remains one of the principal challenges for all graphite projects hence this ROFR would further de-risk Orom-Cross by adding an internationally respected tier one financial institution as a key project supporter for this funding ahead.

Highlights:

· Blencowe passes key hurdle for engagement with US project development financial institution, the DFC.

· US International Development Finance Corporation is America’s leading development finance institution that partners with the private sector to provide finance solutions for project development in markets deemed as critical.

· DFC geared to provide funding assistance for Orom-Cross as part of the US Government’s strategic drive for further access to critical minerals and metals, within its wider renewables strategy.

· Orom-Cross has successfully passed through the key Project Screening test within DFC, with both Parties now moving to a binding Grant Agreement.

· Blencowe is seeking up to US$4.5 million as a Technical Assistance Grant (“TAG”) for Definitive Feasibility Study costs for the Orom-Cross Graphite Project (“Project”).

· As part of the Grant Agreement DFC will require a right of first refusal (“ROFR”) on debt finance for the full project implementation, which would give Blencowe a potential funding solution ahead with a major financial institution.

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 and climate change.

Orom-Cross is directly linked with several of these goals.  It may ultimately become one of the largest graphite producing operations in the world, over a very long mine life, delivering a concentrate as end-product which is a non-replaceable input component to batteries.  These batteries provide the means to store energy across many different renewable energy applications as well as to replace vehicles powered by fossil fuels with electric vehicles (“EVs”).  Electric vehicles are powered by lithium-ion batteries which have more graphite within them than any other metal (up to 70kgs graphite per battery) and EV demand is accelerating at a rate where it is doubling every few years, and expected to continue exponentially into the future.  Graphite is therefore high on the US Government critical metals and minerals list and securing long term supply of graphite is a key strategy.

Orom-Cross will also deliver a greener graphite product than many other producers through a variety of production initiatives, including the use of hydro-power for all mining and processing energy requirements.  Orom-Cross aims to become one of the leading sustainable mining projects worldwide and this is considered very important in a rapidly changing landscape where every participant along the EV supply chain will be audited on their sustainability credentials by OEMs.

Cameron Pearce, Executive Chairman commented;

“This milestone represents a significant step forward in the development of Orom-Cross. We have now further de-risked the Project by introducing a high quality funding partner that will ultimately cover a substantial portion of the costs to complete the DFS.

This same partner is a highly respected international financial institution that may also deliver a debt funding solution for the construction of the plant and associated infrastructure once we move into the implementation stage, which adds another dimension altogether.  We are therefore covering several important bases here to provide an all-encompassing funding solution to ensure that we can successfully bring Orom-Cross into production over the medium term once we have completed our final feasibility studies. By doing this as a Technical Assistance Grant Blencowe is importantly retaining 100% ownership in the Orom-Cross Project as we believe the completion of the DFS will add significant additional value ahead, which we want to retain in full for our shareholders. 

DFC is a tremendous partner for Blencowe given its considerable experience assisting private-sector companies through project development stage and into production.  DFC has experience of both the continent and the country we are operating within, as well as expertise dealing with Governments and other stakeholders. All parties understand the tremendous value that Orom-Cross presents going forward within a rapidly accelerating renewable energy market, and more specifically a rampant lithium-ion battery EV market.”

For further information please contact:

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 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 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, thereby ensuring lower operating and capital costs.