Home » Posts tagged 'graphite'

Tag Archives: graphite

#SVML Sovereign Metals LTD – Outstanding Graphite Purification Results

OUTSTANDING GRAPHITE PURIFICATION RESULTS

 

Testwork Demonstrates Potential Benefits of Using Kasiya Coarse Flake Graphite for Future Downstream Customers

 

·    Testwork confirms Kasiya coarse flake graphite can be purified to:

 

99.95% using acid purification

 

99.98% using alkaline purification

 

·    Suitable for use in high margin applications including powder metallurgy, isostatically pressed refractory products, and high-grade expanded graphite products such as foils or sheets

 

·    Successful purification of Kasiya’s coarse flake graphite via two methods showcases potential for future downstream customers to reduce reagent consumption and waste generation

 

Sovereign Metals Limited (ASX:SVM; AIM:SVML; OTCQX: SVMLF) (Sovereign or the Company) is pleased to announce the results of purification testing of coarse flake graphite concentrate from the Company’s Kasiya Rutile-Graphite Project (Kasiya or the Project) for applications requiring a higher-grade product, such as powder metallurgy, isostatically-pressed refractory products and high-grade expandables (e.g. flame retardants). These applications typically require less than one percent ash in coarse flake graphite, i.e. a loss of ignition (LOI) purity of more than 99%.

 

Sovereign engaged ProGraphite GmbH (ProGraphite) to conduct the testwork using coarse (>180-micron) flake graphite from Kasiya and to investigate acid and alkaline purification alternatives under conditions typically used to achieve the +99% LOI target. Purification of Kasiya coarse flake achieved 99.95% LOI purity using acid purification and 99.98% LOI purity using alkaline purification, which is significantly higher than the >99.0% target.

 

Managing Director and CEO Frank Eagar commented: “These are truly outstanding results – effectively achieving battery grade purities of +99% and less than 0.05% ash under conditions that typically result in under 1% ash. For our future customers, this has the potential to significantly reduce reagent consumption and waste generation in the production of high-purity flake or targeted high-end applications.

 

This is yet further confirmation that Kasiya graphite concentrate is a premium graphite suitable for the anode, refractory, expandables and now also the high-purity powder metallurgy markets. We are delighted with the significant commercial optionality it brings to the Kasiya Rutile and Graphite Project.”

 

High-Purity Coarse Flake Graphite

 

High-quality coarse flake graphite can achieve grades of 97%-98% in minerals processing. However, specific coarse flake applications require less than 1% ash content in the flake, i.e. a LOI purity of more than 99%.

 

To achieve this target, the coarse flake is typically purified using either:

 

·    acid purification, using hydrofluoric (HF) acid as the primary acid to remove silicates and other impurities; or

 

·    alkaline purification, where HF is replaced with sodium hydroxide (NaOH), i.e. caustic soda, to remove silicates before being washed and then acid leached to remove residual metals.

 

The conditions required to achieve a >99% purity are less aggressive than those needed to achieve battery grades (>99.95%). ProGraphite targeted the purification of coarse (>180 microns) Kasiya flake under conditions typically used to meet the >99% target. The LOI purity and residual impurities are summarised in Table 1, with all other elements below 1ppm or below the detection limit.

 

Table 1: LOI and Residual Impurities Analysis of Purified Kasiya >180-micron flake

 

 

Acid Purification

Alkaline Purification

LOI Purity

%

99.95%

99.98%

Ash

%

0.05%

0.02%

Si

ppm

65

<2.8

Fe

ppm

23.6

10.1

Al

ppm

55.6

3.88

Ba

ppm

21

6.45

Ca

ppm

18.6

0.98

K

Ppm

<2.2

<2.1

Mg

ppm

10.7

1.63

Mn

ppm

1.26

6.15

P

ppm

1.85

0.97

Na

ppm

<1.5

40.8

Ti

ppm

15.8

0.56

Zr

ppm

6.54

0.74

 

Testing on Kasiya coarse flake effectively achieved battery-grade purities (≥99.95%) using a single-stage HF purification and an exceptional 99.98% purity with alkaline purification under standard conditions that typically reach a >99% target. HF (a high-cost toxic reagent that requires careful management) is normally required to remove residual silicates in natural graphite. However, these results indicate that the saprolite-hosted Kasiya graphite is amenable to alkaline purification. This will provide downstream customers with process flexibility.

The results indicate potential for customers to reduce reagents consumption to produce standard products (>99%) purity, or, subject to market demand, produce very high-purity coarse flake. Typical uses for high-purity coarse flake include powder metallurgy, isostatically pressed refractory products, and high-purity expandables.

Enquires

Frank Eagar, Managing Director & CEO

South Africa / Malawi

+27 21 140 3190

 

Sapan Ghai, CCO

London

+44 207 478 3900

 

Nominated Adviser on AIM and Joint Broker

 

SP Angel Corporate Finance LLP

+44 20 3470 0470

Ewan Leggat

Charlie Bouverat

 

 

Joint Brokers

 

Stifel

+44 20 7710 7600

Varun Talwar

 

Ashton Clanfield

 

 

 

Berenberg

+44 20 3207 7800

Matthew Armitt

 

Jennifer Lee

 

 

 

Buchanan

+ 44 20 7466 5000

 

Competent Person Statement 

 

The information in this report that relates to Metallurgical Testwork is based on information compiled by Dr Surinder Ghag, PhD., B. Eng, MBA, M.Sc., who is a Member of the Australasian Institute of Mining and Metallurgy (MAusIMM). Dr Ghag is engaged as a consultant by Sovereign Metals Limited. Dr Ghag has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking, to qualify as a Competent Person (and a Qualified Person under the AIM Rules)as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Dr Ghag consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

 

The information in this report that relates to Exploration Results is based on information compiled by Mr Malcolm Titley, a Competent Person who is a member of The Australasian Institute of Mining and Metallurgy (AusIMM). Mr Titley consults to Sovereign Metals Limited and is a holder of ordinary shares and unlisted performance rights in Sovereign Metals Limited. Mr Titley has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken, to qualify as a Competent Person (and a Qualified Person under the AIM Rules)as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Titley consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

 

The information in this announcement that relates to operating costs and graphite marketing is extracted from an announcement dated 22 January 2025, which is available to view at www.sovereignmetals.com.au. Sovereign confirms that: a) it is not aware of any new information or data that materially affects the information included in the original announcement; b) all material assumptions and technical parameters underpinning the Production Target, and related forecast financial information derived from the Production Target included in the original announcement continue to apply and have not materially changed; and c) the form and context in which the relevant Competent Persons’ findings are presented in this presentation have not been materially modified from the original announcement.

 

Forward Looking Statement 

 

This release may include forward-looking statements, which may be identified by words such as “expects”, “anticipates”, “believes”, “projects”, “plans”, and similar expressions. These forward-looking statements are based on Sovereign’s expectations and beliefs concerning future events. Forward looking statements are necessarily subject to risks, uncertainties and other factors, many of which are outside the control of Sovereign, which could cause actual results to differ materially from such statements. There can be no assurance that forward-looking statements will prove to be correct. Sovereign makes no undertaking to subsequently update or revise the forward-looking statements made in this release, to reflect the circumstances or events after the date of that release.

 

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 (‘MAR’). Upon the publication of this announcement via Regulatory Information Service (‘RIS’), this inside information is now considered to be in the public domain.

 

Appendix 1: JORC CODE, 2012 EDITION – TABLE 1

 

SECTION 1 – SAMPLING TECHNIQUES AND DATA

 

Criteria 

 JORC Code explanation 

Commentary 

Sampling Techniques 

Nature and quality of sampling (e.g. cut channels, random chips, or specific specialised industry standard measurement tools appropriate to the minerals under investigation, such as down hole gamma sondes, or handheld XRF instruments, etc). These examples should not be taken as limiting the broad meaning of sampling. 

 

Metallurgical Composite Sample: 

The sample was a composite of multiple hand anger drill samples drilled in 2022 and 2023. Dilling of these samples was within the Kingfisher pit. Clusters of holes were drilled in eight locations. 

Block 15 Site 1 – PT15BLK00143 – PT15BLK00152 (Hole ID: NSPT0017 – refer ASX Announcement dated 15/03/2022) 

Block 15 Site 2 – PT15BLK00125 – PT15BLK00142 (Hole ID: KYAC0149 – refer ASX Announcement dated 30/01/2023) 

Block 15 Site 3 – PT15BLK00103 – PT15BLK00124 (Hole ID: KYAC0142 – refer ASX Announcement dated 30/01/2023) 

Block 15 Site 4 – PT15BLK00075 – PT15BLK00094, PT15BLK00124, PT15BLK00134 (Hole ID: KYAC0025 – refer ASX Announcement dated 8/09/2022) 

Block 15 Site 5 – PT15BLK00061 – PT15BLK00074, PT15BLK00099 – PT15BLK00102, PT15BLK00106 – PT15BLK00108 (Hole ID: KYAC0088 – refer ASX Announcement dated 26/10/2022) 

Block 15 Site 6 – PT15BLK00035 – PT15BLK00060, PT15BLK00076 – PT15BLK00077, PT15BLK00095 – PT15BLK00098, PT15BLK00114 – PT15BLK00117 (Hole ID: KYAC0090 – refer ASX Announcement dated 26/10/2022) 

Block 15 Site 7 – PT15BLK00013 – PT15BLK00014, PT15BLK00022 – PT15BLK00034 (Hole ID: KYAC0091 – refer ASX Announcement dated 26/10/2022) 

Block 14 Site 8 – PT15BLK00003 – PT15BLK00012, PT15BLK00015 – PT15BLK00021, PT15BLK00036 – PT15BLK00039 (Hole ID: KYAC0079 – refer ASX Announcement dated 26/10/2022) 

All samples within the pit shell were added to the composite resulting in a sample of 15,766kg. 

Samples were processed separately for the eight locations through Sovereign’s Malawi metallurgical laboratory. 

The following workflow was used to generate a pre-concentrate graphite feed: 

·      Wet screen at 2mm to remove oversize 

·      Dry screen at 1mm to remove oversize  

·      Wet screen at 600µm  

·      Wet screen at 45µm to remove -45µm material 

·      Pass +45µm -600µm (fine sand) fraction over laboratory wet shaking table to produce a heavy mineral concentrate, light middling and wet table tailings which is the graphite concentrate.  

·      The +45µm -600µm (fine sand) graphite concentrate and <1000µm >600µm screen fraction were combined to provide flotation feed. The >1000µm fraction was not included. 

·      Flotation was performed at Maelgwyn in Johannesburg. 

·      Fine and coarse gravity tailing samples contain approximately 75%-80% of the graphite present in the feed sample. The majority of the graphite lost is contained in the -45µm fines. 

Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used. 

 

Placer Consulting (Placer) Resource Geologists have reviewed Standard Operating Procedures (SOPs) for the collection of HA and Push Tube (PT) drill samples and found them to be fit for purpose. 

Drilling and sampling activities are supervised by a suitably qualified Company geologist who is present at all times. All bulk 1-metre drill samples are geologically logged by the geologist at the drill site. 

The primary metallurgical composite sample is considered representative for this style of mineralisation. 

Aspects of the determination of mineralisation that are Material to the Public Report. In cases where ‘industry standard’ work has been done this would be relatively simple (e.g. ‘reverse circulation drilling was used to obtain 1 m samples from which 3 kg was pulverised to produce a 30 g charge for fire assay’). In other cases more explanation may be required, such as where there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (e.g. submarine nodules) may warrant disclosure of detailed information. 

 

 

HA drilling was used to obtain samples. The bulk metallurgical sample was a composite of selected samples from routine resource drilling. 

Existing rutile and graphite exploration results were used to determine the 1-metre intervals suitable to contribute to the two bulk sample composites. 

Drilling Techniques 

Drill type (e.g. core, reverse circulation, openhole hammer, rotary air blast, auger, Bangka, sonic, etc) and details (e.g. core diameter, triple or standard tube, depth of diamond tails, facesampling bit or other type, whether core is oriented and if so, by what method, etc). 

 

Hand-auger drilling is completed with 75mm diameter enclosed spiral bits with 1-metrelong steel rods.  Each 1m of drill sample is collected into separate sample bags and set aside.  The auger bits and flights are cleaned between each metre of sampling to avoid contamination.    

Placer has reviewed SOPs for hand-auger drilling and found them to be fit for purpose and support the resource classifications as applied to the MRE. 

Drill Sample Recovery 

Method of recording and assessing core and chip sample recoveries and results assessed. 

 

The configuration of drilling and nature of materials encountered results in negligible sample loss or contamination.   

Samples are assessed visually for recoveries. Overall, recovery is good. Drilling is ceased when recoveries become poor generally once the water table has been encountered.  

Auger drilling samples are actively assessed by the geologist onsite for recoveries and contamination. 

Measures taken to maximise sample recovery and ensure representative nature of the samples. 

 

The Company’s trained geologists supervise auger drilling on a 1 team 1 geologist basis and are responsible for monitoring all aspects of the drilling and sampling process. 

 

 

Whether a relationship exists between sample recovery and grade and whether sample bias may have occurred due to preferential loss/gain of fine/coarse material. 

 

No bias related to preferential loss or gain of different materials has occurred. 

Logging 

Whether core and chip samples have been geologically and geotechnically logged to a level of detail to support appropriate Mineral Resource estimation mining studies and metallurgical studies. 

 

All individual 1-metre auger intervals are geologically logged, recording relevant 

data to a set template using company codes. 

 

Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc.) photography. 

 

All logging includes lithological features and estimates of basic mineralogy. Logging is generally qualitative. 

The total length and percentage of the relevant intersection logged 

 

100% of samples are geologically logged. 

Sub-sampling techniques and sample preparation 

If core, whether cut or sawn and whether quarter, half or all core taken. 

 

Not applicable – no core drilling conducted.  

 

 

 

If non-core, whether riffled, tube sampled, rotary split, etc. and whether sampled wet or dry. 

Primary individual 1-metre samples from all HA and PT holes drilled are sun dried, homogenised and riffle split.  

 

 

For all sample types, the nature, quality and appropriateness of the sample preparation technique. 

 

Metallurgical Composite Sample: 

Full length of the Hand Auger (HA) Holes were processed in total 15,767kg.  

Graphite concentrate sent to Maelgwyn was ~4800kg 

Quality control procedures adopted for all sub-sampling stages to maximise representivity of samples. 

 

The sample preparation techniques and QA/QC protocols are considered appropriate for the nature of this test-work.  

 

Measures taken to ensure that the sampling is representative of the in situ material collected, including for instance results for field duplicate/second-half sampling. 

 

The sampling best represents the material in situ.  

Whether sample sizes are appropriate to the grain size of the material being sampled. 

 

The sample size is considered appropriate for the nature of the test-work.  

Quality of assay data and laboratory tests 

The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total. 

Metallurgical Composite Sample: 

The following workflow was used to generate a graphite product;  

·      Rougher graphite flotation  

·      Polishing grind of rougher graphite concentrate 

·      Primary cleaner flotation milled rougher concentrate 

·      Attrition milling of primary cleaner concentrate 

·      Secondary cleaning of attritioned primary cleaner concentrate 

·      Attrition milling of secondary cleaner concentrate 

·      Tertiary cleaner flotation of attritioned secondary cleaner concentrate 

·      Final concentrate dewatering, drying and sizing 

For geophysical tools, spectrometers, handheld XRF instruments, etc., the parameters used in determining the analysis including instrument make and model, reading times, calibrations factors applied and their derivation, etc. 

 

Acceptable levels of accuracy and precision have been established. No handheld methods are used for quantitative determination. 

 

 

 

 

Nature of quality control procedures adopted (e.g. standards, blanks, duplicate, external laboratory checks) and whether acceptable levels of accuracy (i.e. lack of bias) and precision have been established. 

 

Acceptable levels of accuracy and precision have been established in the preparation of the bulk sample composites.  

Verification of sampling & assaying 

The verification of significant intersections by either independent or alternative company personnel. 

 

No drilling intersections are being reported.  

The use of twinned holes. 

 

No twin holes completed in this program.  

 

Documentation of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols. 

All data was collected initially on paper logging sheets and codified to the Company’s templates. This data was hand entered to spreadsheets and validated by Company geologists.  

 

Discuss any adjustment to assay data.  

 

No adjustment to assay data has been made. 

 

Location of data points 

Accuracy and quality of surveys used to locate drill holes (collar and down-hole surveys), trenches, mine workings and other locations used in Mineral Resource estimation. 

 

A Trimble R2 Differential GPS is used to pick up the collars. Daily capture at a registered reference marker ensures equipment remains in calibration.  

No downhole surveying is completed. Given the vertical nature and shallow depths of the holes, drill hole deviation is not considered to significantly affect the downhole location of samples. 

Specification of the grid system used. 

WGS84 UTM Zone 36 South. 

Quality and adequacy of topographic control. 

DGPS pickups are considered to be high quality topographic control measures.  

Data spacing & distribution 

Data spacing for reporting of Exploration Results. 

Metallurgical Composite Sample: The hand-auger holes contributing to this metallurgical were selected from pit area Kingfisher and broadly represent early years of mining as contemplated in the OPFS (Approximately the first three years).  

 

It is deemed that these holes should be broadly representative of the mineralisation style in the general area.  

 

Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied. 

Not applicable, no Mineral Resource or Ore Reserve estimations are covered by new data in this report.   

Whether sample compositing has been applied. 

Metallurgical Composite Sample:  

The sample was composited as described under Sampling Techniques in this Table 1. 

 

Orientation of data in relation to geological structure 

Whether the orientation of sampling achieves unbiased sampling of possible structures and the extent to which this is known considering the deposit type 

 

No bias attributable to orientation of sampling has been identified.  

If the relationship between the drilling orientation and the orientation of key mineralised structures is considered to have introduced a sampling bias, this should be assessed and reported if material. 

 

All holes were drilled vertically as the nature of the mineralisation is horizontal. No bias attributable to orientation of drilling has been identified. 

Sample security 

The measures taken to ensure sample security 

Samples are stored in secure storage from the time of drilling, through gathering, compositing and analysis.  The samples are sealed as soon as site preparation is complete.    

 

A reputable international transport company with shipment tracking enables a chain of custody to be maintained while the samples move from Malawi to Johannesburg. Samples are again securely stored once they arrive and are processed at Maelgwyn.   

 

Graphite concentrate samples were shipped to German laboratories using a reputable international transport company with shipment tracking to enable a chain of custody to be maintained while the samples moved from Johannesburg to Germany. Concentrate samples are securely stored once they arrive and are processed in Germany. 

 

At each point of the sample workflow the samples are inspected by a company representative to monitor sample condition. Each laboratory confirms the integrity of the samples upon receipt.    

Audits or reviews 

The results of any audits or reviews of sampling techniques and data 

 

It is considered by the Company that industry best practice methods have been employed at all stages of the exploration. 

 

Malawi Field and Laboratory visits have been completed by Richard Stockwell in May 2022. A high standard of operation, procedure and personnel was observed and reported. 

 

 

SECTION 2 – REPORTING OF EXPLORATION RESULTS

 

Criteria 

Explanation 

Commentary 

Mineral tenement & land tenure status 

Type, reference name/number, location and ownership including agreements or material issues with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environment settings. 

The Company owns 100% of the following Exploration Licences (ELs) under the Mines and Minerals Act 2019 (Malawi), held in the Company’s wholly-owned, Malawi-registered subsidiaries: EL0609, EL0582, EL0492, EL0528, EL0545, EL0561, EL0657 and EL0710.  

 

A 5% royalty is payable to the government upon mining and a 2% of net profit royalty is payable to the original project vendor. 

 

No significant native vegetation or reserves exist in the area. The region is intensively cultivated for agricultural crops. 

The security of the tenure held at the time of reporting along with any known impediments to obtaining a licence to operate in the area. 

The tenements are in good standing and no known impediments to exploration or mining exist. 

Exploration done by other parties 

 

Acknowledgement and appraisal of exploration by other parties.  

Sovereign Metals Ltd is a first-mover in the discovery and definition of residual rutile and graphite deposits in Malawi.  

Geology  

Deposit type, geological setting and style of mineralisation 

The rutile deposit type is considered a residual placer formed by the intense weathering of rutile-rich basement paragneisses and variable enrichment by eluvial processes.  

 

Rutile occurs in a mostly topographically flat area west of Malawi’s capital, known as the Lilongwe Plain, where a deep tropical weathering profile is preserved. A typical profile from top to base is generally soil (“SOIL” 0-1m) ferruginous pedolith (“FERP”, 1-4m), mottled zone (“MOTT”, 4-7m), pallid saprolite (“PSAP”, 7-9m), saprolite (“SAPL”, 9-25m), saprock (“SAPR”, 25-35m) and fresh rock (“FRESH” >35m).  

 

The low-grade graphite mineralisation occurs as multiple bands of graphite gneisses, hosted within a broader Proterozoic paragneiss package. In the Kasiya areas specifically, the preserved weathering profile hosts significant vertical thicknesses from near surface of graphite mineralisation. 

Drill hole information 

A summary of all information material to the understanding of the exploration results including a tabulation of the following information for all Material drill holes: easting and northings of the drill hole collar; elevation or RL (Reduced Level-elevation above sea level in metres of the drill hole collar); dip and azimuth of the hole; down hole length and interception depth; and hole length 

All intercepts relating to the Kasiya Deposit have been included in public releases during each phase of exploration and in this report. Releases included all collar and composite data and these can be viewed on the Company website. 

There are no further drill hole results that are considered material to the understanding of the exploration results. Identification of the broad zone of mineralisation is made via multiple intersections of drill holes and to list them all would not give the reader any further clarification of the distribution of mineralisation throughout the deposit.  

If the exclusion of this information is justified on the basis that the information is not Material and this exclusion does not detract from the understanding of the report, the Competent Person should clearly explain why this is the case 

No information has been excluded. 

Data aggregation methods 

In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (e.g. cutting of high-grades) and cut-off grades are usually Material and should be stated. 

No data aggregation was required. 

Where aggregate intercepts incorporate short lengths of high-grade results and longer lengths of low grade results, the procedure used for such aggregation should be stated and some typical examples of such aggregations should be shown in detail. 

No data aggregation was required.  

The assumptions used for any reporting of metal equivalent values should be clearly stated. 

Not applicable  

Relationship between mineralisation widths & intercept lengths 

These relationships are particularly important in the reporting of Exploration Results. 

The mineralisation has been released by weathering of the underlying, layered gneissic bedrock that broadly trends NE-SW at Kasiya North and N-S at Kasiya South. It lies in a laterally extensive superficial blanket with high-grade zones reflecting the broad bedrock strike orientation of ~045° in the North of Kasiya and 360° in the South of Kasiya. 

No drilling intercepts are being reported in this announcement. 

If the geometry of the mineralisation with respect to the drill hole angle is known, its nature should be reported. 

The mineralisation is laterally extensive where the entire weathering profile is preserved and not significantly eroded. Minor removal of the mineralised profile has occurred where alluvial channels cut the surface of the deposit. These areas are adequately defined by the drilling pattern and topographical control for the resource estimate. 

If it is not known and only the down hole lengths are reported, there should be a clear statement to this effect (e.g. ‘down hole length, true width not known’. 

No drilling intercepts are being reported.  

Diagrams 

Appropriate maps and sections (with scales) and tabulations of intercepts should be included for any significant discovery being reported. These should include, but not be limited to a plan view of the drill collar locations and appropriate sectional views.  

The original exploration results and plan view of the drill holes for the samples used in relation to the metallurgical composite test work conducted in this announcement, are included in Sovereign’s announcements dated 15 March 2022, 8 September 2022, 26 October 2022 and 30 January 2023. 

 

These announcements are accessible on the Company and ASX websites. 

Balanced reporting  

Where comprehensive reporting of all Exploration Results is not practicable, representative reporting of both low and high-grades and/or widths should be practiced to avoid misleading reporting of exploration results. 

All results are included in this report and in previous releases. These are accessible on the Company’s webpage. 

Other substantive exploration data 

Other exploration data, if meaningful and material, should be reported including (but not limited to: geological observations; geophysical survey results; geochemical survey results; bulk samples – size and method of treatment; metallurgical test results; bulk density, groundwater, geotechnical and rock characteristics; potential deleterious or contaminating substances. 

Limited lateritic duricrust has been variably developed at Kasiya, as is customary in tropical highland areas subjected to seasonal wet/dry cycles. Lithological logs record drilling refusal in just under 2% of the HA/PT drill database. No drilling refusal was recorded above the saprock interface by AC drilling. 

Sample quality (representivity) is established by geostatistical analysis of comparable sample intervals.  

 

Further work 

The nature and scale of planned further work (e.g. test for lateral extensions or depth extensions or large-scale step-out drilling). 

Having recently completed an OPFS, the Company is working towards completing a definitive feasibility study.  

Diagrams clearly highlighting the areas of possible extensions, including the main geological interpretations and future drilling areas, provided this information is not commercially sensitive. 

Refer to diagrams and plan views disclosed in previous announcements. These are accessible on the Company’s website as discussed above. 

 

#SVML Sovereign Metals LTD – Half-year Report

INTERIM FINANCIAL REPORT

FOR THE HALF YEAR ENDED

31 DECEMBER 2024

 

abn 71 120 833 427

ASX: SVM; aim:SVML; OTCQX: SVMlf

 

CORPORATE DIRECTORY

Directors
Mr Benjamin Stoikovich          Chairman

Mr Frank Eagar                        Managing Director and CEO

Mr Ian Middlemas                   Non-Executive Director

Dr Julian Stephens                  Non-Executive Director

Mr Mark Pearce                      Non-Executive Director

Mr Nigel Jones                                      Non-Executive Director

 

CFO and Company Secretary
Mr Dylan Browne

 

London Office
Unit 3C, 38 Jermyn Street, London
SW1Y 6DN, United Kingdom
Telephone: +44 207 478 3900

 

Cape Town Office

Ground Floor, Block C,
The Terraces, Steenberg Office Park
Cape Town, South Africa

Telephone: +27 21 065 1890

 

Operations Office

Area 4

Lilongwe

Malawi

 

Registered and Principal Office
Level 9, 28 The Esplanade
Perth WA 6000
Telephone: +61 8 9322 6322

 

Stock Exchange Listings
Australia

Australian Securities Exchange
ASX Code: SVM – Ordinary Shares

 

United Kingdom

London Stock Exchange (AIM)

AIM Code: SVML – Depository Interests

 

Quotations

United States

OTCQX Best Market

OTCQX code: SVMLF

Nominated Advisor & Broker

SP Angel Corporate Finance LLP

Prince Frederick House

35-39 Maddox Street

London W1S 2PP, United Kingdom

Brokers

Stifel Nicolaus Europe Limited
150 Cheapside

London EC2V 6ET

United Kingdom

T: +44 20 7710 7600

 

Berenberg, Gossler & Co, KG, London Branch
60 Threadneedle Street
London EC2R 8HP
United Kingdom
T: +44 20 3753 3132

 

Share Register
Australia

Computershare Investor Services Pty Ltd
Level 17
221 St Georges Terrace
Perth  WA  6000
Telephone:                  1300 850 505
International:              +61 8 9323 2000
Facsimile:                     +61 8 9323 2033

 

United Kingdom

Computershare Investor Services PLC
The Pavilions,
Bridgewater Road,
Bristol BS99 6ZZ
Telephone: +44 370 702 0000

 

Solicitors
Thomson Geer

Simmons & Simmons

 

Auditor
Ernst & Young – Perth

 

Bankers
Australia – National Australia Bank Limited

Malawi – Standard Bank

 

CONTENTS

 

Directors’ Report

Consolidated Statement of Profit or Loss and Other Comprehensive Income

Consolidated Statement of Financial Position

Consolidated Statement of Changes in Equity

Consolidated Statement of Cash Flows

Notes to the Financial Statements

Directors’ Declaration

Competent Person Statement

Auditor’s Independence Declaration

Independent Auditor’s Review Report

 

DIRECTORS’ REPORT

The Directors of Sovereign Metals Limited present their report on Sovereign Metals Limited (Sovereign or the Company or Parent) and the entities it controlled at the end of, or during, the half year ended 31 December 2024 (Consolidated Entity or Group).

REVIEW AND RESULTS OF OPERATIONS

KASIYA RUTILE-GRAPHITE PROJECT

Sovereign is focused on the development of its Kasiya rutile-graphite project (Kasiya or the Project) in Malawi. The recently completed Optimised Pre-Feasibility Study (OPFS) confirmed Kasiya as a potentially major critical minerals project delivering industry-leading economic returns and sustainability metrics.

The Company’s objective is to develop a large-scale, long life rutile-graphite operation, focusing on developing an environmentally and socially responsible, sustainable operation.

A map of a project Description automatically generated

Figure 1: Kasiya Regional Project Location

HIGHLIGHTS DURING AND SUBSEQUENT TO PERIOD END

Optimised PFS Results Reaffirm Kasiya’s Globally Strategic Significance

·           In January 2025, the OPFS was completed with oversight from Sovereign-Rio Tinto Technical Committee

·           Results of the OPFS reaffirm Kasiya’s potential to become the largest and lowest-cost producer of natural rutile and natural flake graphite while generating exceptional economics

·           Various optimisations have led to superior project delivery, operational flexibility, environmental and social outcomes compared to the 2023 Prefeasibility Study (PFS)

Pilot Phase Advanced to Rehabilitation Stage following Mining Trials and Backfilling

·           In December 2024, material mined and stockpiled during the Pilot Mining and Land Rehabilitation (Pilot Phase) was placed back in the test pit, filling it to its original ground level

·           On-site soil remediation and land rehabilitation activities are underway, testing Sovereign’s proposed rehabilitation approach and demonstrating how mined land can support sustainable farming post-closure

Rio Tinto Invests Additional A$19m Increasing Shareholding to 19.9%

·           In July 2024, Rio Tinto invested a further A$18.5 million via the exercise of options to increase its shareholding in Sovereign. To date Rio Tinto has invested A$60 million for 19.9% of Sovereign

Positive Test Results for Use of Kasiya Graphite

·           Very high quality Coated Spherical Purified Graphite (CSPG) anode material produced from Kasiya graphite concentrate with performance characteristics comparable to highest quality natural graphite battery material produced by dominant Chinese anode manufacturers

·           In November 2024, Sovereign announced that preliminary tests confirmed that graphite concentrate produced from Kasiya exhibits prerequisite characteristics for selling graphite to the refractory materials sector

·           In February 2025, further test work confirmed Kasiya’s graphite also has the key characteristics required for use in expandable (fire retardant) and expanded (gaskets, seals, and brake lining) applications

Infill Drilling Program Complete

·           In October 2024, Sovereign announced the completion of an infill drilling program designed to upgrade Kasiya’s Mineral Resource Estimate (MRE) and to facilitate conversion of Ore Reserves from Probable to Proven category, with the upgrade due in the coming months

Next Steps

·           Sovereign will continue to advance the Definitive Feasibility Study (DFS), provide updates on the rehabilitation component of the Pilot Phase, publish an upgrade to the MRE, continue with further graphite testwork to support potential offtake discussions and further its community and social development programs in Malawi

A large area of dirt with a hole in the middle Description automatically generated with medium confidence An aerial view of a farm AI-generated content may be incorrect.

Figure 2: Pilot Phase test pit during mining trials (left) and subsequently backfilled and rehabilitated (right)

Optimised PFS Results Reaffirm Kasiya’s Globally Strategic Significance

Subsequent to the half year, the Company announced the results of an OPFS for Kasiya which was undertaken following a strategic investment by Rio Tinto Mining and Exploration Limited (Rio Tinto) in 2023. Under the Investment Agreement, a joint Technical Committee was established to oversee the development of Kasiya; the OPFS was conducted with oversight from the Sovereign-Rio Tinto Technical Committee.

Following input from various organisations, including internationally recognised, independent consultancies, the Company’s owner’s team, and subject matter experts from Rio Tinto, the OPFS has reconfirmed Kasiya as a leading global future supplier of strategic critical minerals outside of China.

The OPFS proposes a large-scale, long-life operation to deliver substantial volumes of natural rutile and graphite while generating significant returns. Table 1 below summarises the key findings from the OPFS and includes a comparison to the PFS results released 16 months ago, in September 2023. It is important to note that the results for the 2023 PFS in Table 1 have not been updated or adjusted for inflation since their release.

TABLE 1: KEY OPFS METRICS

 

 

 

 

Units

OPFS Results

Jan 25

2023 PFS

Sep 23

Production

 

 

Initial Mine Life

Years

25

25

Plant Throughput (Stage 1: Years 1-4)

Mtpa

12

12

Plant Throughput (Stage 2: Years 5-25)

Mtpa

24

24

Average Annual Rutile Produced (95%+TiO2)

ktpa

222

222

Annual Average Graphite Produced (96% TGC)*

ktpa

233

244

Operating and Capital Expenditure

 

 

Capex to First Production (Stage 1)

US$M

665

597

Total LOM Development Capex

US$M

1,127

1,250

Total LOM Sustaining Capex

US$M

397

470

Operating Costs (FOB Nacala)

US$/t product

423

404

Financial Performance

 

 

Total Revenue*

US$M

16,367

16,121

Annual Revenue (Average LOM)

US$M

640

645

Annual EBITDA (Average LOM)

US$M

409

415

NPV8 (real, pre-tax)

US$M

2,322

2,419

IRR (pre-tax)

%

27%

32%

Revenue to Cost Ratio

x

2.8

2.8

*Annual average graphite produced includes 292kt of graphite processed and sold in two years post cessation of active ore mining. Average graphite produced during the 25-year initial mine life only is 240ktpa; total revenue during the same period is US$15,990 million. All rutile is produced and sold during the 25-year initial mine life. Note: All cashflows and costs are presented in US$ real January 2025 terms unless otherwise stated. Operating costs exclude mineral royalties and community development support costs.

Summary of Optimisations

The OPFS optimises seven key areas compared to the 2023 PFS, as summarised below.

Mining Method

The PFS proposed a 25-year initial LOM based on a hydraulic mining process where slurry material would be screened and pumped overland to the processing plants.

Based on findings from the mining trials undertaken as part of the Pilot Phase, the OPFS proposes a large-scale open-pit dry mining operation using draglines and trucking of material to the processing plants. The change in mining method has not changed the initial mine life of 25 years.

Operating Model

The 2023 PFS envisaged mining would take place on a contractor basis.

During the OPFS, Sovereign undertook a trade-off analysis between the following operating options:

·           Fully owner-operated mine with draglines and trucks purchased by the owner

·           Owner-operated mine with draglines and trucks leased by the owner

·           Mining contractor operation using excavators and trucks

Due to the preference for draglines and benefit of flexibility, an owner-operated mine with leased equipment is selected as the preferred operating model.

Plant Configuration

Dry mining Kasiya means the material received at the plant is not pre-wet and pre-scrubbed. Therefore, the OPFS proposes a process plant front end consisting of two scrubbers and two oversize screens per 12Mt plant. No further changes are proposed to the processing plant flowsheet.

Plant Location

Per the 2023 PFS, mining would commence in the southern area of the Kasiya deposit, ramping up to 12Mt per annum (Mtpa) and then scaling up to 24Mtpa in Year 5 by constructing a second plant module in the same area, reaching nameplate capacity by the end of that year.

In Year 10 of production, another new 12Mtpa plant module would be built and commissioned in the northern area of Kasiya, supported by the relocation to the north of one of the southern plants to maintain a steady state of 24Mtpa.

However, the OPFS has determined the most efficient plant locations to be an initial 12Mtpa South Kasiya plant followed by the construction of another 12Mtpa North Kasiya plant in year 5 of production, negating any relocation requirements in later years.

The OPFS maintains the ROM schedule with operations commencing with 12Mtpa of throughput during the first four years of production (Stage 1) and expanding to 24Mtpa in year 5, with full capacity reached by end of year 5 (Stage 2).

Tailings Management

Per the PFS, a conventional process would be used to produce rutile and graphite concentrate with tailings in separate sand and fines streams being pumped to a conventional TSF. Mined out pit areas would be backfilled as part of a rehabilitation process. 

The OPFS proposes maximising backfilling of pits as undertaken during the Pilot Phase and the introduction of mud farming on the TSF to accelerate dewatering. This approach has reduced tailings volumes in the TSF by 44% from 187 Mm³ to 105 Mm³.

Mud farming is a technique used by Rio Tinto at operations such as its 100%-owned Weipa bauxite operations in Queensland, Australia, which has been in production since 1963 and produced 35.1Mt of bauxite in 2023.

Water Management

The PFS proposed that the primary water supply for the Kasiya mining complex would be created by building a water storage dam and collecting run-off water from the greater catchment area. Following the introduction of dry mining and mud farming, the size of the water storage dam proposed in the PFS has been significantly reduced, with less process water required and more process water recovered.

The OPFS mining trials and material deposition tests indicated a water demand of 10.2 Mm³ per annum, almost a 40% decrease in water requirement from the PFS (16.7 Mm³). The effect on the  water storage dam wall could be a reduction in volume from 0.79 Mm³ to 0.57 Mm³ and a reduction in dam wall height from 20 metres to 17 metres.

Power

The 2023 PFS envisaged a hybrid hydro-generated grid power plus solar power system solution.

The Malawi grid reliability has improved since completion of the PFS and is expected to further improve considerably with the commissioning of the country’s first HV transmission interconnector to Mozambique in Q2 2025.

This will provide the Project with sufficient power and therefore the OPFS proposes to connect the Project’s power system to the hydro-sourced grid network only. This mitigates any risks associated with commissioning a new solar power project and reducing the overall power tariff by eliminating the need for an Independent Power Producer as per the 2023 PFS.

Pilot Phase Advanced to Rehabilitation Stage Following Mining Trials and Backfilling

In December 2024, the Company announced that the test pit mined during the Pilot Phase at the Kasiya Project had been successfully backfilled. This allowed Sovereign to commence on-site soil remediation and land rehabilitation activities, testing our proposed rehabilitation approach and demonstrating that the mined land can support sustainable farming post-closure.

During the Pilot Phase mining trials, 170,000m3 was mined using a conventional excavator fleet. The fleet was used to place mined material back into the pit, filling the pit to the original ground level in less than two months and ahead of schedule.

In March 2025, the Company announced the success of the rehabilitation program with landowners given immediate access to land to start maize crop farming without missing a planting season.

Positive Test Results for Use of Kasiya Graphite in Refractory and Expandable Markets

The Company has announced that downstream testwork targeting the traditional graphite market, conducted at leading independent consultancies ProGraphite GmbH (ProGraphite) and Dorfner Anzaplan (DorfnerA) in Germany, have delivered very positive test results, which will be used for customer engagement and potential offtake discussions.

Preliminary tests confirmed that graphite concentrate produced from Kasiya in Malawi exhibits prerequisite characteristics required for graphite sales into the refractory materials sector and for use in expandable (fire retardant) and expanded (gaskets, seals, and brake lining) applications.

Traditional demand for natural graphite is primarily tied to the steel industry where it is used as a component in bricks that line both blast and electric arc furnaces (“refractories”) and as a liner for ladles and crucibles. It is used in brake linings, gaskets and clutch materials in the automotive industry. Graphite has many other industrial uses in lubricants, carbon brushes for electric motors, fire retardants, and insulation and reinforcement products.

Graphite’s key properties for use in refractory applications are its resistance to oxidation, chemical inertness and good thermal conductivity.

A key use for expandable graphite is as a flame retardant. Growth for expandable graphite flame retardants, is driven by concerns over halogen-based flame retardants, which include brominated and chlorinated flame retardants. Many of these chemicals are now recognised as global contaminants and are associated with adverse health effects in animals and humans, including endocrine and thyroid disruption, immunotoxicity, reproductive toxicity, and cancer (National Institute of Health).

Expanded graphite is used in gaskets, seals, brake linings, bi-polar plates for fuel cells, and thermal management in electronic devices, where the inherent properties of graphite are combined with the flexibility of expanded graphite.

 

A blue pie chart with white text AI-generated content may be incorrect.

Figure 3: Natural graphite market per application (Benchmark Minerals Intelligence, 2025)

Infill Drilling Program Complete

In October 2024, the Company announced the completion of an infill drilling program at Kasiya to support an upgrade of the MRE.

Aircore drilling, supported by hand auger, push tube and diamond core drilling, was completed in the southern part of Kasiya. The drilling was focused on the designated pits proposed to provide ore feed in the first eight years of the Project’s production schedule. Ore Reserves in these areas are expected to convert from the Probable to Proven category with an upgrade of the current MRE from Indicated to the Measured category under the JORC (2012) Code. 

Offsite laboratories in South Africa and Australia will assay all samples for rutile and graphite. The drilling program’s results and subsequent Resource upgrade are expected in early 2025.

Kasiya is already the world’s largest rutile deposit and second-largest flake graphite deposit, with over 66% of the current MRE in the Indicated category.

Corporate Update

Sovereign remains in a strong financial position with cash at bank of approximately A$34 million and no debt.

Next Steps

The Company plans to update the market on the following progress in the coming months:

·           Planned MRE upgrade

·           Further graphite test work results as the Company continues to advance the qualification of its graphite product for the lithium-ion battery and traditional graphite sectors

·           Progress in discussions with future potential end-users of rutile and graphite

·           Updates on community and social development programs

·           Further rehabilitation aspects of the Pilot Phase

·           Progress of the DFS, which is targeted for completion in Q4, 2025

 

DIRECTORS

The names of Directors in office at any time during the financial period or since the end of the financial period are:

Mr Benjamin Stoikovich      Chairman

Mr Frank Eagar                      Managing Director and CEO

Mr Ian Middlemas                Non-Executive Director

Dr Julian Stephens                Non-Executive Director

Mr Mark Pearce                    Non-Executive Director

Mr Nigel Jones                      Non-Executive Director

All Directors were in office from 1 July 2024 until the date of this report, unless otherwise noted.

OPERATING RESULTS

The net operating loss after tax for the half year ended 31 December 2024 was $19,546,116 (2023: $6,976,503) which is attributable to:

(i)         Interest income of $1,025,751 (2023: $938,402) earned on cash term deposits held by the Group;

(ii)        exploration and evaluation expenditure of $16,495,513 (2023: $5,027,397) in relation to the Kasiya Project. This is attributable to the Group’s accounting policy of expensing exploration and evaluation expenditure incurred by the Group subsequent to acquisition of the rights to explore and up to the completion of feasibility studies; and

(iii)       non-cash share based payment expenses of $1,904,852 (2023: $1,089,974) relating to performance rights. The fair value of incentive options and rights is measured at grant date and recognised over the period during which the performance rights holders become unconditionally entitled to the incentive securities.

FINANCIAL POSITION

At 31 December 2024, the Company had cash and cash equivalents of $33,531,689 (30 June 2024: $31,564,130) and no debt (30 June 2024: nil). The Company had net assets of $35,927,994 (30 June 2024: $34,358,774), an increase of $1,569,220 or approximately 4% compared with the prior period. This is largely attributable to the increase in cash reserves following the investment made by Rio Tinto in the period offset by exploration and evaluation spend on the project to complete the Pilot Phase and OPFS.  

SIGNIFICANT POST BALANCE DATE EVENTS

On 22 January 2025, the Company announced the results of an OPFS for Kasiya which reaffirm Kasiya’s potential to become the largest and lowest-cost producer of natural rutile and natural flake graphite while generating exceptional economics.

Other than the above, there are no matters or circumstances which have arisen since 31 December 2024 that have significantly affected or may significantly affect:

·       the operations, in periods subsequent to 31 December 2024, of the Group;

·       the results of those operations, in periods subsequent to 31 December 2024, of the Group; or

·       the state of affairs, in periods subsequent to 31 December 2024, of the Group.

AUDITOR’S INDEPENDENCE DECLARATION

Section 307C of the Corporations Act 2001 requires our auditors, Ernst & Young, to provide the directors of Sovereign Metals Limited with an Independence Declaration in relation to the review of the half year financial report. This Independence Declaration is on page 17 and forms part of this Directors’ Report.

This report is made in accordance with a resolution of the directors made pursuant to section 306(3) of the Corporations Act 2001.

 

For and on behalf of the Directors

 

 

Frank Eagar

Managing Director and CEO

7 March 2025

 

 

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

FOR THE HALF YEAR ENDED 31 DECEMBER 2024

 

Notes

Half Year Ended
31 December 2024
$

Half Year Ended
31 December 2023
$

Interest income

1,025,751

938,402

Exploration and evaluation expenses

(16,495,513)

(5,027,397)

Corporate and administrative expenses

(779,930)

(572,119)

Business development expenses

(1,004,695)

(996,548)

Share based payment expense

9(a)

(1,904,852)

(1,089,974)

Other expenses

3

(386,877)

(173,386)

Demerger expenses

(55,481)

Loss before income tax

 

(19,546,116)

(6,976,503)

Income tax expense

Loss for the period

 

(19,546,116)

(6,976,503)

 

Other comprehensive income, net of income tax:

Items that may be reclassified subsequently to profit or loss

Exchange differences on foreign entities

80,624

3,530

Other comprehensive income for the period, net of income tax

80,624

3,530

Total comprehensive loss for the period

 

(19,465,492)

(6,972,973)

Loss attributable to members of Sovereign Metals Limited

 

(19,465,492)

(6,972,973)

 

Total comprehensive loss attributable to members of Sovereign Metals Limited

 

(19,465,492)

(6,972,973)

 

Basic and diluted loss per share from continuing operations (cents per share)

(3.3)

(1.1)

 

 

The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes.

 

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2024

 

Notes

31 December 2024
$

30 June 2024
$

ASSETS

Current Assets

Cash and cash equivalents

33,531,689

31,564,130

Other receivables

4

506,258

315,597

Other financial assets

 

175,000

560,000

Total Current Assets

 

34,212,947

32,439,727

 

 

 

Non-current Assets

 

 

Property, plant and equipment

5

2,009,700

1,149,771

Exploration and evaluation assets

6

5,086,129

5,086,129

Total Non-current Assets

 

7,095,829

6,235,900

 

 

 

TOTAL ASSETS

 

41,308,776

38,675,627

 

 

LIABILITIES

 

 

Current Liabilities

 

 

Trade and other payables

 

5,184,642

4,138,353

Provisions

 

86,849

56,782

Other financial liabilities

7(a)

41,378

35,288

Total Current Liabilities

 

5,312,869

4,230,423

 

 

 

Non-Current Liabilities

 

 

Other financial liabilities

7(b)

67,913

86,430

Total Non-Current Liabilities

 

67,913

86,430

 

 

 

TOTAL LIABILITIES

 

5,380,782

4,316,853

NET ASSETS

 

35,927,994

34,358,774

 

 

EQUITY

 

 

Issued capital

8

136,965,491

117,835,631

Reserves

9

(1,374,794)

(3,360,270)

Accumulated losses

(99,662,703)

(80,116,587)

TOTAL EQUITY

35,927,994

34,358,774

 

 

The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.

 

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE HALF YEAR ENDED 31 DECEMBER 2024

 

Issued Capital
$

Share Based Payment Reserve
$

Demerger Reserve

$

Foreign Currency Translation Reserve

$

Accumulated Losses
$

Total Equity
$

Balance at 1 July 2024

117,835,631

3,605,751

(7,336,678)

370,657

(80,116,587)

34,358,774

Net loss for the period

(19,546,116)

(19,546,116)

Other comprehensive income

80,624

80,624

Total comprehensive income/(loss) for the period

80,624

(19,546,116)

(19,465,492)

Transactions with owners, recorded directly in equity

 

 

 

 

 

 

Issue of placement shares

19,174,395

19,174,395

Cancelation of unvested performance rights

(22,754)

(22,754)

Share based payment expense

1,927,606

1,927,606

Share issue costs

(44,535)

(44,535)

Balance at 31 December 2024

136,965,491

5,510,603

(7,336,678)

451,281

(99,662,703)

35,927,994

Balance at 1 July 2023

74,508,488

4,155,950

(7,336,678)

(139,498)

(61,515,693)

9,672,569

Net loss for the period

(6,976,503)

(6,976,503)

Other comprehensive income

3,530

Total comprehensive income/(loss) for the period

3,530

Transactions with owners, recorded directly in equity

Issue of placement shares

40,598,258

40,598,258

Transfer from SBP reserve upon conversion of performance rights

2,853,400

(2,853,400)

Share based payment expense

1,089,974

1,089,974

Share issue costs

(124,515)

Balance at 31 December 2023

117,835,631

2,392,524

(7,336,678)

(135,968)

(68,492,196)

44,263,313

 

 

The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.

 

 

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE HALF YEAR ENDED 31 DECEMBER 2024

 

Half Year Ended
31 December 2024
$

Half Year Ended
31 December 2023
$

Cash flows from operating activities

Payments to suppliers and employees – exploration and evaluation

(15,479,030)

(5,433,663)

Payments to suppliers and employees – other

(1,764,767)

(1,616,960)

Interest received

1,031,209

744,942

Net cash used in operating activities

(16,212,588)

(6,305,681)

 

Cash flows from investing activities

 

Payments for purchase of plant and equipment

(916,061)

(205,902)

Repayment of loan receivable from NGX Limited

34,434

Net cash used in investing activities

(916,061)

(171,468)

 

Cash flows from financing activities

 

Proceeds from issue of shares

19,174,395

40,598,258

Payments for share issue costs

(44,535)

(248,778)

Payments for finance lease

(31,777)

Net cash from financing activities

19,098,083

40,349,480

 

Net increase in cash and cash equivalents

1,969,434

33,872,331

Net foreign exchange differences

(1,875)

Cash and cash equivalents at the beginning of the period

31,564,130

5,564,376

Cash and cash equivalents at the end of the period

33,531,689

39,436,707

 

The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.

 

NOTES TO THE FINANCIAL STATEMENTS

FOR THE HALF YEAR ENDED 31 DECEMBER 2024

 

1.       MATERIAL ACCOUNTING POLICY INFORMATION

Sovereign Metals Limited (the “Company”) is a for profit company limited by shares and incorporated in Australia, whose shares are publicly traded on the Australian Securities Exchange, the AIM Market of the London Stock Exchange and a Quotation on OTCQX in the U.S. The consolidated interim financial statements of the Company as at and for the period from 1 July 2024 to 31 December 2024 comprise the Company and its subsidiaries (together referred to as the “Group”). The nature of the operations and principal activities of the Group are as described in the Directors’ Report.

This interim financial report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the audited annual report of Sovereign for the year ended 30 June 2024 (where comparative amounts have been extracted from) and any public announcements made by the Group during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001.

(a)       Basis of Preparation of Half Year Financial Report

The consolidated financial statements have been prepared on the basis of historical cost, except for the revaluation of certain financial instruments. Cost is based on the fair values of the consideration given in exchange for assets.  All amounts are presented in Australian dollars, unless otherwise stated. There have been no changes in the critical accounting judgements or key sources of estimation since 30 June 2024.

(b)       Statement of Compliance

The consolidated interim financial report complies with Australian Accounting Standards, including AASB 134 which ensures compliance with International Financial Reporting Standard (“IFRS”) IAS 34 “Interim Financial Reporting” as issued by the International Accounting Standards Board. The accounting policies adopted in the preparation of the half-year financial report are consistent with those applied in the preparation of the Group’s annual financial report for the year ended 30 June 2024, except for new standards, amendments to standards and interpretations effective 1 July 2024. In the current half year, the Group has adopted all of the new and revised Standards and Interpretations issued by the AASB that are relevant to its operations and effective for the current annual reporting period. The adoption resulted in no material impact.

(c)       Issued standards and interpretations not early adopted

Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet effective have not been adopted by the Group for the reporting period ended 31 December 2024. Those which may be relevant to the Group are set out in the table below. The impact of these standards are still being assessed.

Standard/Interpretation

Application Date of Standard

Application Date for Group

AASB 2014-10 Amendments to Australian Accounting Standards – Sale or

Contribution of Assets between an Investor and its Associate or Joint Venture

1 January 2025

1 July 2025

AASB 18 Presentation and Disclosure in Financial Statements

1 January 2027

1 July 2027

2.       SEGMENT INFORMATION

AASB 8 requires operating segments to be identified on the basis of internal reports about components of the Consolidated Entity that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segment and to assess its performance. The Consolidated Entity has one operating segment, being exploration in Malawi.

3.       OTHER EXPENSES

31 December 2024
$

31 December 2023
$

Foreign exchange (loss)/gain

(1,877)

1,614

Fair value movements in other financial assets

(385,000)

(175,000)

 

(386,877)

(173,386)

4.       CURRENT ASSETS – OTHER RECEIVABLES

31 December 2024
$

30 June 2024
$

Accrued interest

140,454

145,913

GST receivable

95,664

81,051

Prepayments

203,559

52,655

Other

66,581

35,978

 

506,258

315,597

5.       NON-CURRENT ASSETS – PROPERTY, PLANT AND EQUIPMENT

Office Furniture and Equipment

$

Computer Equipment

$

Plant & Equipment

$

Right of use

$

Assets under construction

$

Total

$

Carrying amount at
1 July 2024

152,163

68,566

496,953

 

116,447

 

315,642

1,149,771

Additions

31,758

30,516

768,298

73,062

903,634

Depreciation charge

(15,546)

(17,761)

(64,801)

(21,663)

(119,771)

Foreign exchange differences

10,217

3,557

33,604

4,257

24,431

76,066

Carrying amount at
31 December 2024

178,592

84,878

1,234,054

 

99,041

 

413,135

2,009,700

At cost

227,879

153,292

1,803,664

134,091

388,704

2,707,630

Accumulated depreciation, amortisation and impairment

(49,287)

(68,414)

(569,610)

(35,050)

24,431

(697,930)

6.       EXPLORATION AND EVALUATION ASSETS

31 December 2024
$

(a)        Movement in Exploration and Evaluation Assets

Kasiya Rutile-Graphite Project:

Carrying amount as at 1 July 2024

5,086,129

Carrying amount at 31 December 2024(i)

5,086,129

Note:

(i)               The ultimate recoupment of costs carried forward for exploration and evaluation is dependent on the successful development and commercial exploitation or sale of the respective areas of interest.

7.       OTHER FINANCIAL LIABILITIES

31 December 2024
$

30 June 2024
$

(a)        Current liabilities

Lease Liability(i)

41,378

35,288

(b)        Non-Current liabilities

 

Lease Liability(i)

67,913

86,430

Note:

(i)               The Company has a lease agreement for the rental of a property. Refer to Note 5 for the carrying amount of the right of use asset relating to the lease. The following are amounts recognised in the Statement of Profit and Loss: (i) amortisation expense of right of use asset $21,663 (30 June 2024: $17,454); (ii) interest expense on lease liabilities of $14,311 (30 June 2024: $12,961); and (iii) rent expense of $5,660 (30 June 2024: $7,922).

8.       CONTRIBUTED EQUITY

31 December 2024
$

30 June 2024
$

(a)        Issued and Paid Up Capital

599,879,879 (30 June 2024: 563,003,401) fully paid ordinary shares (Note 8(b))

136,965,491

117,835,631

(b)       Movements in Ordinary Share Capital were as follows:

Date

Details

Number of Shares


$

1 Jul 24

Opening balance

563,003,401

117,835,631

4 Jul 24

Issue of ordinary shares on exercise of Rio Tinto Options

34,549,598

18,484,035

13 Sep 24

Issue of ordinary shares to Rio Tinto

1,290,392

690,360

13 Sep 24

Issue of advisory fee shares

1,036,488

31 Dec 24

Share issue costs

(44,535)

31 Dec 24

Closing balance

599,879,879

136,965,491

9.       RESERVES

31 December 2024
$

30 June 2024
$

Share-based Payments Reserve (Note 9(a))

5,510,603

3,605,751

Foreign Currency Translation Reserve – exchange differences

451,281

370,657

Demerger Reserve

(7,336,678)

(7,336,678)

 

(1,374,794)

(3,360,270)

(a)       Movements in Options and Performance Rights were as follows:

Date

Details

Number of Unlisted  Performance Rights


$(i)

1 Jul 2024

Opening balance

17,860,000

3,605,751

Various

Issue of performance rights

4,725,000

31 Dec 2024

Cancelation of unvested performance rights

(425,000)

(22,754)

31 Dec 2024

Share based payment expense

1,927,606

31 Dec 2024

Closing balance

22,160,000

5,510,603

Note

(i)               The value of performance rights granted during the period is estimated as at the grant date based on the underlying share price with the expense recognised over the vesting period in accordance with Australian Accounting Standards.

10.     COMMITMENTS AND CONTINGENCIES

(a)     Commitments

 

31 December 2024
$

30 June 2024
$

Exploration Commitments – Kasiya Rutile-Graphite Project:

Within one year

201,477

107,155

After one year but not more than five years

82,043

46,705

 

283,520

153,860

As a condition of retaining the current rights to tenure to exploration tenements, the Group is required to pay an annual rental charge and meet minimum expenditure requirements for each tenement. These obligations are not provided for in the financial statements and are at the sole discretion of the Group. The majority of the remaining exploration commitments relate to licences with a term greater than one year. For the purposes of disclosure, the Group has apportioned the remaining commitments on an equal monthly basis over the remaining term of the exploration licences.

(b)       Contingencies

At the last annual reporting date, the Consolidated Entity did not have any material contingent liabilities.  There has been no material change in contingent assets and liabilities of the Consolidated Entity during the half year.

11.     DIVIDENDS PAID OR PROVIDED FOR

No dividend has been paid or provided for during the half year (2023: nil).

12.     FAIR VALUE OF FINANCIAL INSTRUMENTS

The net fair value of financial assets and financial liabilities approximates their carrying value.

13.     SUBSEQUENT EVENTS AFTER BALANCE DATE

On 22 January 2025, the Company announced the results of an OPFS for Kasiya which reaffirm Kasiya potential to become the largest and lowest-cost producer of natural rutile and natural flake graphite while generating exceptional economics.

Other than the above, there are no matters or circumstances which have arisen since 31 December 2024 that have significantly affected or may significantly affect:

·       the operations, in periods subsequent to 31 December 2024, of the Group;

·       the results of those operations, in periods subsequent to 31 December 2024, of the Group; or

·       the state of affairs, in periods subsequent to 31 December 2024, of the Group.

 

DIRECTORS’ DECLARATION

 

In accordance with a resolution of the Directors of Sovereign Metals Limited, I state that:

In the opinion of the Directors:

(a)       the financial statements and notes thereto are in accordance with the Corporations Act 2001, including:

(i)         complying with Accounting Standard AASB 134: Interim Financial Reporting and the Corporations Regulations 2001; and

(ii)        giving a true and fair view of the consolidated entity’s financial position as at 31 December 2024 and of its performance for the half year ended on that date.

(b)       there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

This declaration is signed in accordance with a resolution of the Board of Directors made pursuant to section 303(5) of the Corporations Act 2001.

On behalf of the Board

 

 

Frank Eagar

Managing Director and CEO

 

7 March 2025

 

 

Competent Person Statement

The information in this announcement that relates to Production Targets, Ore Reserves, Processing, Infrastructure and Capital and Operating Costs is extracted from an announcement dated 22 January 2025, which is available to view at www.sovereignmetals.com.au. Sovereign confirms that: a) it is not aware of any new information or data that materially affects the information included in the original announcement; b) all material assumptions and technical parameters underpinning the Production Target, and related forecast financial information derived from the Production Target included in the original announcement continue to apply and have not materially changed; and c) the form and context in which the relevant Competent Persons’ findings are presented in this presentation have not been materially modified from the original announcement.

The information in this announcement that relates to the Exploration Results (metallurgy – rutile and graphite) is extracted from announcements dated 8 May 2024, 15 May 2024, 4 September 2024, 21 November 2024, 19 February 2025 and 26 February 2025 which are available to view at www.sovereignmetals.com.au. Sovereign confirms that a) it is not aware of any new information or data that materially affects the information included in the original announcement; b) all material assumptions included in the original announcement continue to apply and have not materially changed; and c) the form and context in which the relevant Competent Persons’ findings are presented in this report have not been materially changed from the announcement.

The information in this announcement that relates to the Mineral Resource Estimate is extracted from Sovereign’s 2024 Annual Report and is based on, and fairly represents information compiled by Mr Richard Stockwell, a Competent Person, who is a fellow of the Australian Institute of Geoscientists (AIG). Mr Stockwell is a principal of Placer Consulting Pty Ltd, an independent consulting company. Sovereign confirms that a) it is not aware of any new information or data that materially affects the information included in the original announcement; b) all material assumptions included in the 2024 Annual Report continue to apply and have not materially changed; and c) the form and context in which the relevant Competent Persons’ findings are presented in 2024 Annual Report have not been materially changed from the disclosure in the 2024 Annual Report.

Ore Reserve for the Kasiya Deposit

 

Classification

Tonnes
(Mt)

Rutile Grade
(%)

Contained Rutile
(Mt)

Graphite Grade (TGC) (%)

Contained Graphite
(Mt)

RutEq. Grade*
(%)

Proved

Probable

 538

1.03%

5.5

1.66%

8.9

2.00%

Total

 538

1.03%

5.5

1.66%

8.9

2.00%

* RutEq. Formula: Rutile Grade x Recovery (100%) x Rutile Price (US$1,484/t) + Graphite Grade x Recovery (67.5%) x Graphite Price (US$1,290/t) / Rutile Price (US$1,484/t). All assumptions are from the Kasiya PFS ** Any minor summation inconsistencies are due to rounding

Kasiya Total Indicated + Inferred Mineral Resource Estimate at 0.7% rutile cut-off grade (inclusive of Ore Reserves)

Classification

Resource
(Mt)

Rutile Grade
(%)

Contained Rutile
(Mt)

Graphite Grade (TGC) (%)

Contained Graphite
(Mt)

Indicated

 1,200

1.0%

12.2

1.5%

18.0

Inferred

 609

0.9%

5.7

1.1%

6.5

Total

 1,809

1.0%

17.9

1.4%

24.4

Forward Looking Statement

This release may include forward-looking statements, which may be identified by words such as “expects”, “anticipates”, “believes”, “projects”, “plans”, and similar expressions. These forward-looking statements are based on Sovereign’s expectations and beliefs concerning future events. Forward looking statements are necessarily subject to risks, uncertainties and other factors, many of which are outside the control of Sovereign, which could cause actual results to differ materially from such statements. There can be no assurance that forward-looking statements will prove to be correct. Sovereign makes no undertaking to subsequently update or revise the forward-looking statements made in this release, to reflect the circumstances or events after the date of that release.

 

AUDITOR’S INDEPENDENCE DECLARATION

A close-up of a document AI-generated content may be incorrect.

INDEPENDENT AUDITOR’S REVIEW REPORT

A close-up of a document AI-generated content may be incorrect.

A close-up of a letter AI-generated content may be incorrect.

 

#BRES Blencowe Resources Plc – AFC Expression of Interest

African Finance Corporation Issues Expression of Interest for Orom-Cross Project Funding

Tier One African Investment Bank Signals Willingness to Participate in Both Debt and Project Equity

Blencowe Resources Plc (LSE: BRES) is pleased to announce it has received a formal Expression of Interest (“EOI”) from the African Finance Corporation (“AFC” or “the AFC”), a leading multilateral finance institution, regarding potential participation in both debt and project level equity funding for the Orom-Cross graphite project in Uganda.

AFC: A Premier Institutional Funding Partner

This EOI follows extensive engagement between Blencowe and AFC over the past few years and represents a key step to securing the AFC as a co-funding solution partner for Orom-Cross.  The AFC has conducted due diligence on the Orom-Cross Graphite Project and recognises its high-purity product, low-cost structure, and strategic positioning as a key supplier of non-China graphite into the global battery and industrial markets.

The AFC’s stated interest includes both debt and project level equity participation, underscoring its confidence in the long-term value of Orom-Cross.

The AFC is one of Africa’s most established and well-capitalised development finance institutions, boasting $12.3 billion in assets and a Moody’s A3/P-2 credit rating, reinforcing its position as a premier lender for large-scale resource projects. The AFC has a strong track record in funding major African mining developments, including:

·    $175 million for Baomahun Gold (FG Gold in Sierra Leone)

·    $86 million for Thor Exploration’s Segilola Gold (Nigeria)

·    $130 million for Shalina Resources (DRC copper-cobalt)

AFC’s Expression of Interest includes potential funding participation in the initial start-up phase of Orom-Cross development, targeted for 2026. As part of this initial investment, AFC has also indicated an interest in securing future funding rights for subsequent project expansions, aligning with Orom-Cross’s long-term growth strategy.

Graphite’s essential role within the global energy transition has made securing independent, large-scale graphite supply a top priority, and AFC’s engagement provides strong validation of Orom-Cross as one of the world’s most promising new graphite projects.

Complementing Existing DFC Support

AFC’s interest represents a major step forward in securing project financing, complementing the existing $5 million Technical Assistance Grant (TAG) provided by the US International Development Finance Corporation (“DFC”) in 2023. DFC remains supportive of Blencowe and retains the first right to provide cornerstone debt funding for Orom-Cross.

With both AFC and DFC now involved, Blencowe is positioning Orom-Cross with a strong institutional funding pathway that could cover all debt and project equity financing following DFS completion.

Next Steps

Blencowe will continue its discussions with AFC and other institutional partners to finalise a financing structure that enables Phase 1 development in 2026 and ensures a clear pathway to commercial-scale production.

The Company remains committed to delivering a world-class graphite project, with a low-cost, high-purity supply chain that aligns with European and North American offtake priorities.

Executive Chairman Cameron Pearce commented:  “Securing this Expression of Interest from the African Finance Corporation is a material milestone for Blencowe. AFC is one of Africa’s most respected financial institutions and its interest in Phase 1 funding, alongside future development phases, reinforces Orom-Cross’s long-term strategic importance.

“Institutional investors are increasingly recognising graphite’s critical role of in the global battery supply chain. With AFC now engaged alongside DFC, Blencowe is building a strong financial foundation that will position Orom-Cross as one of a select few new graphite mines advancing towards production. Our ongoing drill programme is expected to materially increase our graphite resource, further enhancing Orom-Cross’ economics and the attraction of the project.”

“We appreciate AFC’s support and look forward progressing discussions. Our differentiated strategy will mitigate risk, drive long-term success, and establish Orom-Cross as a premier supplier in the global energy transition.” 

About African Finance Corporation 

AFC is an Africa-focused infrastructure and development financing institution established by treaty between sovereign states to accelerate infrastructure and industrial development across the continent. With total assets of US$12.3 billion, AFC is Africa’s second highest investment grade rated multilateral financial institution, holding an A3/P-2 rating from Moody’s Investors Service. 

Since 2008 AFC has disbursed more than US$13.2 billion across key infrastructure and resource projects, with an investment footprint across 36 African countries and 43 member states, including the Republic of Uganda. 

AFC adds significant value to the development of major mining projects in Africa by leveraging its in-house technical expertise, international reach, and relationships for fundraising from private and development finance institutions alike. The AFC has various long-term investments in the mining sector across several African countries in addition to investments in a range of infrastructure projects in transport and logistics, power, heavy industries, and telecommunications.

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.sethi@blencoweresourcesplc.com

Tavira Financial 

Jonathan Evans

Tel: +44 (0)20 3192 1733

jonathan.evans@tavira.group

#BRES Blencowe Resources PLC – Hydropower Study Confirms Sustainable, Low-Cost Power Supply for Orom-Cross

Blencowe Resources Plc (LSE: BRES) is pleased to announce the completion of an initial hydropower study for its Orom-Cross Graphite Project in Uganda. The study confirms the availability of abundant, low-cost, and renewable hydropower from the Ugandan national grid, providing a strategic advantage for the Project’s future mining and processing operations. This marks a major step towards Blencowe’s commitment to sustainability and its ambition to deliver a net-zero graphite operation.

Key Findings of the Hydropower Study

·    Plentiful renewable energy: Two high-capacity power transmission spurs extend to the regional grid near to Orom-Cross, one from the Bujagali Hydroelectric Dam in Jinga and the other from the Isimba Hydroelectric Dam, both located on the Nile River. This ensures a reliable supply of renewable energy to Orom-Cross, including redundancy.

·    Low Cost Advantage: Uganda’s hydropower tariffs are significantly lower than regional African comparisons, positioning Orom-Cross as one of the lowest-cost graphite producers globally.

·    Ample Capacity: Uganda currently has over 1,000 MW of installed hydropower capacity, with additional hydro-projects underway. Orom-Cross’s power demand of 12MW (Phase 2) rising to 40MW at full production can be comfortably accommodated.

·    Advancing towards Power Purchase Agreement (PPA): The Company is now working towards securing a long-term PPA with Uganda Electricity Transmission Company Limited (UETCL) to formalise the supply of low-cost hydroelectricity for the Project.

·    Net-zero Potential: Access to 100% renewable energy for strengthens Blencowe’s ability to achieve net-zero production, making Orom-Cross one of the most environmentally responsible graphite projects globally, a critical factor for funding providers and offtake partners in Europe and North America.

Strategic Importance of Hydropower for Orom-Cross

Reliable, green, and cost-effective energy is a major advantage as Blencowe moves towards first production in 2026. Orom-Cross will require 12MW for Phase 2 commercial scale production, scaling to 40MW at full ramp up, making power a critical cost factor.  The study reinforces confidence that Orom-Cross can operate with one of the lowest carbon footprints in the graphite sector, aligning with global ESG and sustainability standards.

Hydropower access strengthens Blencowe’s appeal to OEMs, battery manufacturers, and critical mineral end-users seeking to secure sustainable supply chains. It also enhances discussions with potential offtake and funding partners, particularly in Europe and North America where securing non-China supply is a priority.

Downstream Beneficiation

A key differentiator for Orom-Cross is Blencowe’s plan to develop a beneficiation facility near the Karuma Power Station, (190kms from site) in partnership with one of the most world’s leading SPG producers (“SPG Partner”).  This facility will upgrade 96% small fines graphite concentrate to 99.95% SPG (spheronised purified graphite) significantly increasing value and returns.

A low-cost, high-capacity power source is essential for this process.  Blencowe intends to leverage its SPG Partner’s proven thermal purification technology which requires considerable energy.  This technology eliminates the need for acid leaching and avoids associated environmental concerns.

The availability of abundant, cost-effective hydropower makes this downstream processing strategy viable and highly competitive, reinforcing Orom-Cross’s position ahead as a premier graphite supplier.

Next Steps

Blencowe will continue discussions with UETCL and the Ugandan Government to finalise a PPA and integrate renewable energy planning into the ongoing Definitive Feasibility Study (DFS). Additional studies will be conducted to assess potential power demand scenarios as Orom-Cross scales up production.

Executive Chairman Cameron Pearce commented:

“Access to abundant, low-cost hydropower directly from Uganda’s national grid represents a major strategic advantage for Orom-Cross. This will enable us to operate sustainably with one of the lowest carbon footprints in the graphite sector while keeping production costs highly competitive.”

“We are committed to building one of the world’s most ESG-friendly graphite projects, and securing clean energy is a critical milestone towards that goal. With work now progressing to formalise a PPA, we are securing ensuring a long-term, sustainable power solution that aligns with our development timeline.”

Conclusion

The integration of hydropower into the Orom-Cross development plan underscores Blencowe’s strategic vision to establish a low-cost, high-purity, and net-zero graphite operation. As the Company advances its DFS and project financing discussions, securing sustainable energy further enhances Orom-Cross’s appeal to global investors, end-users

Blencowe remains focused on delivering a world-class graphite project with industry-leading sustainability credentials and looks forward to providing further updates as the PPA process advances.

Generating Opportunity-- ChinAfrica

Figure 1:  Isimba Hydroelectric Power Station, Uganda

 

 

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.

In 3Q 2024 Blencowe introduced a Joint Venture concept with experienced downstream graphite processing partners to ultimately produce upgraded 99.95% SPG in Uganda.  This strategy has several key advantages plus substantial cost savings which will assist deliver a world class project once DFS is completed.

#SVML Sovereign Metals LTD – Kasiya’s Graphite Suitable for Refractory Use

KASIYA’S GRAPHITE SUITABLE FOR REFRACTORY USE

·         

Kasiya graphite concentrate confirmed to meet or exceed all critical characteristics required for refractory applications

·         

Refractories market is the second largest end-user of natural graphite (24%) after batteries sector (52%)

·         

Refractories use coarser (larger) flake graphite products, which typically attract a premium over smaller flake-size products used in the batteries sector

·         

In Q4 2024, graphite usable in refractories achieved prices up to US$1,193/t versus smaller flake graphite used in the batteries sector, which sold for US$564/t

·         

Kasiya’s incremental cost of graphite production per the recently announced Optimised Prefeasibility results is US$241/t (FOB)

·         

Leading German laboratories ProGraphite and Dorfner Anzaplan completed a comprehensive testwork program of Kasiya’s graphite concentrate

·         

Results will be used for customer engagement and potential offtake discussions

·         

Previous testwork has already confirmed that Kasiya’s graphite can produce outstanding battery anode material

 

Sovereign Metals Limited (ASX:SVM; AIM:SVML; OTCQX: SVMLF) (Sovereign or the Company) is pleased to announce that testwork completed on graphite from the Company’s Kasiya Rutile-Graphite Project (Kasiya or the Project) has confirmed Kasiya’s graphite has the key characteristics required for use in refractory applications. The comprehensive testwork programs were completed by ProGraphite GmbH (ProGraphite) and Dorfner Anzaplan (DA) in Germany and demonstrated that Kasiya graphite concentrate contains very low sulphur levels and the absence of other impurities of concern, providing a competitive advantage over other current and potential sources of graphite supply.

Managing Director and CEO Frank Eagar commented: “The refractories market is the second largest end-user of natural graphite and requires larger, coarser graphite flakes with specific chemical and physical properties. We know that almost 70% of Kasiya’s graphite meets the size requirements for refractory applications. Today’s results confirm that our graphite product also meets or exceeds the key chemical and physical properties required to sell into the refractory market.

Combining these results with the excellent results for anode materials testing highlights the premium quality of Kasiya graphite concentrate and provides a very strong foundation for sales and marketing discussions.”

Kasiya Graphite Testwork Update

Sovereign has now completed testwork programs to confirm the suitability of graphite from Kasiya as a product for the two largest end-use markets for natural flake graphite i.e. refractory applications and anode material for use in lithium-ion batteries. Together, these two sectors account for over three-quarters of global natural graphite demand (see Figure 1).

Graphite products for refractory applications typically require larger flake sizes than the smaller graphite flake products used to produce battery anode materials. Larger flake size graphite products tend to attract significantly higher prices than smaller flake products.

In Q4 2024, Syrah Resources Limited (the world’s largest, publicly listed natural graphite producer outside of China) reported a price for smaller flake graphite concentrate to be used for battery anode production of US$564 per tonne (CIF) based on third-party sales. In December 2024, large flake graphite used in the refractory sector achieved prices of up to US$1,193/t (based on data from Benchmark Mineral Intelligence).

The incremental cost of producing a tonne of graphite from Kasiya under Sovereign’s recently announced Optimised Prefeasibility Study is US$241/t (see ASX announcement “Kasiya – Optimised PFS Results” dated 22 January 2025).

 

 

Figure 1: Uses of Graphite (Source: European Advanced Carbon and Graphite Association)

Refractory Application Testwork Results Summary

Flake graphite concentrate generated from Kasiya samples were tested for traditional, refractory applications at two leading European laboratories ProGraphite and DA, with the following findings:

Table 1: Graphite Requirements for Refractory Applications

Kasiya Graphite

High purity graphite concentrate with little impurities

Checkbox Checked with solid fill

High grade, large flakes within graphite concentrate

Checkbox Checked with solid fill

High melting temperature for flake ash residue after combusting graphite

Checkbox Checked with solid fill

High oxidation resistance of graphite concentrate

Checkbox Checked with solid fill

Low levels of volatiles in concentrate

Checkbox Checked with solid fill

Low levels of problematic mineral impurities, including sulphur

Checkbox Checked with solid fill

Low levels of “springback” from compression

Checkbox Checked with solid fill

 

Customer Engagement and Offtakes

The global refractory market is an estimated €20 Billion worldwide industry and is the largest traditional market for natural flake graphite. Natural flake graphite is added to refractories to improve performance.

Refractories are used to line furnaces and vessels to support high-temperature processing across a wide range of industries, including iron and steel production, non-ferrous metals, cement and lime, glass, and chemicals.

According to the global leader in refractories, RHI Magnesita NV, steel production is the major consumer of refractories, accounting for 60% of global demand. Each tonne of steel requires approximately 10-15kg of refractories.

Other key companies in the refractories market include Vesuvius plc, Krosakai Harima Corporation, Puyang Refractories Group, Chosun Refractories Co, Imerys SA, Shinagwa Refractories, Saint-Gobain, Morgans Advanced Materials and Calderys. 

The successful assessment of Kasiya coarse flake for refractory applications will be used for customer engagement and offtake discussions.

Enquires

 

Frank Eagar, Managing Director & CEO

South Africa / Malawi

+ 27 21 140 3190

 

Sapan Ghai, CCO

London

+44 207 478 3900

 

Nominated Adviser on AIM and Joint Broker

 

SP Angel Corporate Finance LLP

+44 20 3470 0470

Ewan Leggat

Charlie Bouverat

 

 

Joint Brokers

 

Stifel

+44 20 7710 7600

Varun Talwar

 

Ashton Clanfield

 

 

 

Berenberg

+44 20 3207 7800

Matthew Armitt

 

Jennifer Lee

 

 

 

Buchanan

+ 44 20 7466 5000

 

Competent Person Statement

The information in this report that relates to Metallurgical Testwork is based on information compiled by Dr Surinder Ghag, PhD., B. Eng, MBA, M.Sc., who is a Member of the Australasian Institute of Mining and Metallurgy (MAusIMM). Dr Ghag is engaged as a consultant by Sovereign Metals Limited. Dr Ghag has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking, to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Dr Ghag consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

The information in this report that relates to Exploration Results is based on information compiled by Mr Malcolm Titley, a Competent Person who is a member of The Australasian Institute of Mining and Metallurgy (AusIMM). Mr Titley consults to Sovereign Metals Limited and is a holder of ordinary shares and unlisted performance rights in Sovereign Metals Limited. Mr Titley has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken, to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Titley consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

The information in this announcement that relates to operating costs is extracted from an announcement dated 22 January 2025, which is available to view at www.sovereignmetals.com.au. Sovereign confirms that: a) it is not aware of any new information or data that materially affects the information included in the original announcement; b) all material assumptions and technical parameters underpinning the Production Target, and related forecast financial information derived from the Production Target included in the original announcement continue to apply and have not materially changed; and c) the form and context in which the relevant Competent Persons’ findings are presented in this presentation have not been materially modified from the original announcement.

Forward Looking Statement

This release may include forward-looking statements, which may be identified by words such as “expects”, “anticipates”, “believes”, “projects”, “plans”, and similar expressions. These forward-looking statements are based on Sovereign’s expectations and beliefs concerning future events. Forward looking statements are necessarily subject to risks, uncertainties and other factors, many of which are outside the control of Sovereign, which could cause actual results to differ materially from such statements. There can be no assurance that forward-looking statements will prove to be correct. Sovereign makes no undertaking to subsequently update or revise the forward-looking statements made in this release, to reflect the circumstances or events after the date of that release.

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 (‘MAR’). Upon the publication of this announcement via Regulatory Information Service (‘RIS’), this inside information is now considered to be in the public domain.

 

Appendix 1: Detailed Refractory Application Testwork Results

High purity graphite concentrate with little impurities

Kasiya concentrate was determined to have high purity (98%) with no observable natural mineral impurities observed (see Figure 2). Talc, which is not an impurity of concern for refractory applications, was determined to be the minor impurity on analysis of the ash remaining from combusting the graphite.

A close-up of a microscope Description automatically generated

Figure 2: Kasiya Flake Graphite SEM highlighting clean flakes

High grade, large flakes within graphite concentrate

Natural flake graphite for refractory applications requires high oxidation resistance. Particle size and grade are the two key determinants of oxidation resistance.

There are three different size fractions applicable to refractory graphite products: +300 microns, +180 microns and +150 microns. All three size fractions for Kasiya graphite concentrate demonstrate very high grade, highlighting coarse Kasiya flakes suitability for refractory applications.

Table 2: Size fraction analysis for Loss-on-Ignition (LOI) and Fixed Carbon Grade

Sample

LOI

(%)

Fixed Carbon (%)

+300 microns

98.69

98.50

+180 microns

98.83

98.57

+150 microns

98.75

98.49

 

High melting temperature for flake ash residue

Flake ash is the residue from combusting (burning) graphite. A high flake ash melting temperature is required for refractory applications.

Flake ash from coarse Kasiya flake (>180 microns) has a melting temperature of 1,373°C, above that for flake ash of commercial reference material (>1250°C), and hemisphere temperature of 1,393°C and flow temperature of 1,429°C (Figure 3) i.e. flake ash from coarse Kasiya concentrate exceeds the melting characteristics specification.

A collage of images of a person's body Description automatically generated

Figure 3: Flake ash from Kasiya coarse flake melting testing

High oxidation resistance of graphite concentrate

As reported in the Company’s ASX Announcement dated 21 November 2024, entitled “Positive Initial Test Results For Use Of Kasiya Graphite In Refractories”, and as expected from the high purity of Kasiya coarse fractions (Table 2), Kasiya’s coarse flake has excellent resistance to oxidation. ProGraphite had confirmed Kasiya coarse flake exhibits:

No oxidation below 400°C, only a 6.4% mass loss after four hours at 650°C, and a very low oxidation rate of 1.6% per hour at 650°C.

Comparative testing at DA showed that only a coarse commercial reference material (>300 microns) had a greater resistance than Kasiya coarse flake (>180 microns).

Low levels of volatiles in concentrate

DA measured volatiles content at 0.2%, which is comparable or better than commercial reference materials; ProGraphite measured volatile content at 0.19%-0.26% for various size fractions, significantly lower than what is considered “high volatiles content” at ~0.5% or higher.

High volatiles content can damage the refractory, indicating that Kasiya coarse flake meets this specification.

Low levels of problematic mineral impurities

Sulphur content was measured at 0.03% at DA, noting that Kasiya graphite sulphur levels are low compared to commercial reference material from other sources.

Calcium carbonates (calcite, dolomite) act as a flux, lowering the melting point of other minerals and releasing CO2 when exposed to high temperatures. Consequently, low levels are required in graphite used for refractory applications.  Calcium carbonates were not detected in testing of Kasiya concentrate via a range of methods. Other alkalis (sodium, potassium) which can also be reactive in refractory applications were also at low levels.

Low levels of “springback” from compression

Springback is an assessment of the extent of graphite to increase its volume after compression. A low springback is preferred for shape retention e.g. in producing refractory bricks.

Springback of Kasiya graphite was observed to be low and in line with results from Chinese graphite’s, decreasing with particle size (see Table 3).

Table 3: Springback Analysis of Kasiya Coarse Fractions

Sample

Springback (%)

+300 microns

8.1%

+180 microns

9.2%

+150 microns

11.5%

Conclusion

Testing of the broad range of criteria on the suitability of natural graphite concentrates for refractory applications confirmed that coarse Kasiya concentrate has the characteristics required for refractory applications – it has high purity, high oxidation resistance, high ash melting temperatures, low levels of volatiles, sulphur and calcium carbonates, and low springback.

 

Appendix 2: JORC CODE, 2012 EDITION – TABLE 1

SECTION 1 – SAMPLING TECHNIQUES AND DATA

 

Criteria

 JORC Code explanation

Commentary

Sampling Techniques

Nature and quality of sampling (e.g. cut channels, random chips, or specific specialised industry standard measurement tools appropriate to the minerals under investigation, such as down hole gamma sondes, or handheld XRF instruments, etc). These examples should not be taken as limiting the broad meaning of sampling.

 

Metallurgical Composite Sample:

The sample was a composite of 24 Hand Auger (HA) and Push Tube (PT) holes drilled in 2021 and 2022 in the Kingfisher pit.

All drilling samples within the pit shell were added to the composite resulting in a sample of 2,498kg.

Specifically, the composite sample consisted of selected rutile mineralised zones from holes, NSHA0009, 0010, 0056, 0060, 0061, 0074, 0119, 0311, 0343, 0344, 0345, 0350 and NSPT 0011, 0013, 0014, 0015, 0017, 0020, 0021, 0023, 0024, 0025, 0026, 0027.

The following workflow was used to generate a pre-concentrate graphite feed at AML:

·       Wet screen at 2mm to remove oversize

·       Two stage cyclone separation at a cut size of 45µm to remove -45µm material

·       Pass +45µm -2mm (sand) fraction through Up Current Classifier (UCC)

·       Pass UCC O/F through cyclone at cut point of 45µm

·       Pass UCC O/F cyclone U/F (fine) over MG12 Mineral Technologies Spiral

·       Pass UCC U/F (coarse) over MG12 Mineral Technologies Spiral

·       Spiral cons are combined for further processing.

Fine and coarse gravity tailing samples contain approximately 75%-80% of the graphite present in the feed sample. The majority of the graphite lost is contained in the -45µm fines.

Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used.

 

Placer Consulting (Placer) Resource Geologists have reviewed Standard Operating Procedures (SOPs) for the collection of HA and PT drill samples and found them to be fit for purpose.

Drilling and sampling activities are supervised by a suitably qualified Company geologist who is present at all times. All bulk 1-metre drill samples are geologically logged by the geologist at the drill site.

The primary metallurgical composite sample is considered representative for this style of mineralisation.

Aspects of the determination of mineralisation that are Material to the Public Report. In cases where ‘industry standard’ work has been done this would be relatively simple (e.g. ‘reverse circulation drilling was used to obtain 1 m samples from which 3 kg was pulverised to produce a 30 g charge for fire assay’). In other cases more explanation may be required, such as where there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (e.g. submarine nodules) may warrant disclosure of detailed information.

 

 

HA drilling was used to obtain 1-metre samples. The bulk metallurgical sample was a composite of selected samples from routine resource drilling.

Existing rutile and graphite exploration results were used to determine the 1-metre intervals suitable to contribute to the two bulk sample composites.

Drilling Techniques

Drill type (e.g. core, reverse circulation, openhole hammer, rotary air blast, auger, Bangka, sonic, etc) and details (e.g. core diameter, triple or standard tube, depth of diamond tails, facesampling bit or other type, whether core is oriented and if so, by what method, etc).

 

Hand-auger drilling is completed with 75mm diameter enclosed spiral bits with 1-metrelong steel rods.  Each 1m of drill sample is collected into separate sample bags and set aside.  The auger bits and flights are cleaned between each metre of sampling to avoid contamination.  

Placer has reviewed SOPs for hand-auger drilling and found them to be fit for purpose and support the resource classifications as applied to the MRE.

Drill Sample Recovery

Method of recording and assessing core and chip sample recoveries and results assessed.

 

The configuration of drilling and nature of materials encountered results in negligible sample loss or contamination. 

Samples are assessed visually for recoveries. Overall, recovery is good. Drilling is ceased when recoveries become poor generally once the water table has been encountered.

Auger drilling samples are actively assessed by the geologist onsite for recoveries and contamination.

Measures taken to maximise sample recovery and ensure representative nature of the samples.

 

The Company’s trained geologists supervise auger drilling on a 1 team 1 geologist basis and are responsible for monitoring all aspects of the drilling and sampling process.

 

 

Whether a relationship exists between sample recovery and grade and whether sample bias may have occurred due to preferential loss/gain of fine/coarse material.

 

No bias related to preferential loss or gain of different materials has occurred.

Logging

Whether core and chip samples have been geologically and geotechnically logged to a level of detail to support appropriate Mineral Resource estimation mining studies and metallurgical studies.

 

All individual 1-metre auger intervals are geologically logged, recording relevant

data to a set template using company codes.

 

Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc.) photography.

 

All logging includes lithological features and estimates of basic mineralogy. Logging is generally qualitative.

The total length and percentage of the relevant intersection logged

 

100% of samples are geologically logged.

Sub-sampling techniques and sample preparation

If core, whether cut or sawn and whether quarter, half or all core taken.

 

Not applicable – no core drilling conducted.

 

 

 

If non-core, whether riffled, tube sampled, rotary split, etc. and whether sampled wet or dry.

Primary individual 1-metre samples from all HA and PT holes drilled are sun dried, homogenised and riffle split.

 

 

For all sample types, the nature, quality and appropriateness of the sample preparation technique.

 

Metallurgical Composite Sample:

1-metre intervals selected for the 2,498kg metallurgical sample were divided into weathering units.

MOTT and PSAP material were combined and homogenised in preparation for dispatch to Australian laboratory Intertek for TGC assay.

Per Australian import quarantine requirements the contributing SOIL/FERP material from within 2m of surface was kept separate to undergo quarantine heat treatment at Intertek Laboratory on arrival into Australia.   

The two sub samples (SOIL/FERP and MOTT/PSAP) were then dispatched from Intertek to AML Laboratory (AML). AML sub-sampled and assayed the individual lithologies prior to combining and homogenising the sample in preparation for test-work.

Quality control procedures adopted for all sub-sampling stages to maximise representivity of samples.

 

The sample preparation techniques and QA/QC protocols are considered appropriate for the nature of this test-work.

 

Measures taken to ensure that the sampling is representative of the in situ material collected, including for instance results for field duplicate/second-half sampling.

 

The sampling best represents the material in situ.

Whether sample sizes are appropriate to the grain size of the material being sampled.

 

The sample size is considered appropriate for the nature of the test-work.

Quality of assay data and laboratory tests

The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total.

Metallurgical Composite Sample:

The following workflow was used to generate a graphite product;

o    Coarse and fine rougher graphite flotation

o    Polishing grind of coarse and fine rougher graphite concentrate

o    Cleaner flotation of coarse and fine graphite

o    Cleaner concentrate sizing at 180µm

o    Regrind of separate +180µm/-180µm fractions

o    Three stage recleaner flotation of +180µm/-180µm fractions

 

For geophysical tools, spectrometers, handheld XRF instruments, etc., the parameters used in determining the analysis including instrument make and model, reading times, calibrations factors applied and their derivation, etc.

 

Acceptable levels of accuracy and precision have been established. No handheld methods are used for quantitative determination.

 

 

 

 

Nature of quality control procedures adopted (e.g. standards, blanks, duplicate, external laboratory checks) and whether acceptable levels of accuracy (i.e. lack of bias) and precision have been established.

 

Acceptable levels of accuracy and precision have been established in the preparation of the bulk sample composites.

Verification of sampling & assaying

The verification of significant intersections by either independent or alternative company personnel.

 

No drilling intersections are being reported.

The use of twinned holes.

 

No twin holes completed in this program.

 

Documentation of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols.

All data was collected initially on paper logging sheets and codified to the Company’s templates. This data was hand entered to spreadsheets and validated by Company geologists.

 

 

Discuss any adjustment to assay data.

 

No adjustment to assay data has been made.

 

Location of data points

Accuracy and quality of surveys used to locate drill holes (collar and down-hole surveys), trenches, mine workings and other locations used in Mineral Resource estimation.

 

A Trimble R2 Differential GPS is used to pick up the collars. Daily capture at a registered reference marker ensures equipment remains in calibration.

No downhole surveying is completed. Given the vertical nature and shallow depths of the holes, drill hole deviation is not considered to significantly affect the downhole location of samples.

Specification of the grid system used.

WGS84 UTM Zone 36 South.

Quality and adequacy of topographic control.

DGPS pickups are considered to be high quality topographic control measures.

Data spacing & distribution

Data spacing for reporting of Exploration Results.

Metallurgical Composite Sample: The hand-auger holes contributing to this metallurgical were selected from pit area Kingfisher and broadly represent early years of mining as contemplated in the OPFS (Approximately the first three years).

 

It is deemed that these holes should be broadly representative of the mineralisation style in the general area.

 

 

Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied.

Not applicable, no Mineral Resource or Ore Reserve estimations are covered by new data in this report. 

Whether sample compositing has been applied.

Metallurgical Composite Sample:

The sample was composited as described under Sampling Techniques in this Table.

 

 

Orientation of data in relation to geological structure

Whether the orientation of sampling achieves unbiased sampling of possible structures and the extent to which this is known considering the deposit type

 

No bias attributable to orientation of sampling has been identified.

If the relationship between the drilling orientation and the orientation of key mineralised structures is considered to have introduced a sampling bias, this should be assessed and reported if material.

 

All holes were drilled vertically as the nature of the mineralisation is horizontal. No bias attributable to orientation of drilling has been identified.

Sample security

The measures taken to ensure sample security

Samples are stored in secure storage from the time of drilling, through gathering, compositing and analysis.  The samples are sealed as soon as site preparation is complete.  

 

A reputable international transport company with shipment tracking enables a chain of custody to be maintained while the samples move from Malawi to Australia or Malawi to Johannesburg. Samples are again securely stored once they arrive and are processed at Australian laboratories. A reputable domestic courier company manages the movement of samples within Perth, Australia.  

 

At each point of the sample workflow the samples are inspected by a company representative to monitor sample condition. Each laboratory confirms the integrity of the samples upon receipt.  

Audits or reviews

The results of any audits or reviews of sampling techniques and data

 

It is considered by the Company that industry best practice methods have been employed at all stages of the exploration.

 

Malawi Field and Laboratory visits have been completed by Richard Stockwell in May 2022. A high standard of operation, procedure and personnel was observed and reported.

 

 

SECTION 2 – REPORTING OF EXPLORATION RESULTS

 

Criteria

Explanation

Commentary

Mineral tenement & land tenure status

Type, reference name/number, location and ownership including agreements or material issues with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environment settings.

The Company owns 100% of the following Exploration Licences (ELs) under the Mines and Minerals Act 2019 (Malawi), held in the Company’s wholly-owned, Malawi-registered subsidiaries: EL0609, EL0582, EL0492, EL0528, EL0545, EL0561, EL0657 and EL0710.

 

A 5% royalty is payable to the government upon mining and a 2% of net profit royalty is payable to the original project vendor.

 

No significant native vegetation or reserves exist in the area. The region is intensively cultivated for agricultural crops.

The security of the tenure held at the time of reporting along with any known impediments to obtaining a licence to operate in the area.

The tenements are in good standing and no known impediments to exploration or mining exist.

Exploration done by other parties

 

Acknowledgement and appraisal of exploration by other parties.

Sovereign Metals Ltd is a first-mover in the discovery and definition of residual rutile and graphite deposits in Malawi.

Geology

Deposit type, geological setting and style of mineralisation

The rutile deposit type is considered a residual placer formed by the intense weathering of rutile-rich basement paragneisses and variable enrichment by eluvial processes.

 

Rutile occurs in a mostly topographically flat area west of Malawi’s capital, known as the Lilongwe Plain, where a deep tropical weathering profile is preserved. A typical profile from top to base is generally soil (“SOIL” 0-1m) ferruginous pedolith (“FERP”, 1-4m), mottled zone (“MOTT”, 4-7m), pallid saprolite (“PSAP”, 7-9m), saprolite (“SAPL”, 9-25m), saprock (“SAPR”, 25-35m) and fresh rock (“FRESH” >35m).

 

The low-grade graphite mineralisation occurs as multiple bands of graphite gneisses, hosted within a broader Proterozoic paragneiss package. In the Kasiya areas specifically, the preserved weathering profile hosts significant vertical thicknesses from near surface of graphite mineralisation.

Drill hole information

A summary of all information material to the understanding of the exploration results including a tabulation of the following information for all Material drill holes: easting and northings of the drill hole collar; elevation or RL (Reduced Level-elevation above sea level in metres of the drill hole collar); dip and azimuth of the hole; down hole length and interception depth; and hole length

All intercepts relating to the Kasiya Deposit have been included in public releases during each phase of exploration and in this report. Releases included all collar and composite data and these can be viewed on the Company website.

There are no further drill hole results that are considered material to the understanding of the exploration results. Identification of the broad zone of mineralisation is made via multiple intersections of drill holes and to list them all would not give the reader any further clarification of the distribution of mineralisation throughout the deposit.

 

If the exclusion of this information is justified on the basis that the information is not Material and this exclusion does not detract from the understanding of the report, the Competent Person should clearly explain why this is the case

No information has been excluded.

Data aggregation methods

In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (e.g. cutting of high-grades) and cut-off grades are usually Material and should be stated.

No data aggregation was required.

Where aggregate intercepts incorporate short lengths of high-grade results and longer lengths of low grade results, the procedure used for such aggregation should be stated and some typical examples of such aggregations should be shown in detail.

No data aggregation was required.

The assumptions used for any reporting of metal equivalent values should be clearly stated.

Not applicable

Relationship between mineralisation widths & intercept lengths

These relationships are particularly important in the reporting of Exploration Results.

The mineralisation has been released by weathering of the underlying, layered gneissic bedrock that broadly trends NE-SW at Kasiya North and N-S at Kasiya South. It lies in a laterally extensive superficial blanket with high-grade zones reflecting the broad bedrock strike orientation of ~045° in the North of Kasiya and 360° in the South of Kasiya.

No drilling intercepts are being reported.

If the geometry of the mineralisation with respect to the drill hole angle is known, its nature should be reported.

The mineralisation is laterally extensive where the entire weathering profile is preserved and not significantly eroded. Minor removal of the mineralised profile has occurred where alluvial channels cut the surface of the deposit. These areas are adequately defined by the drilling pattern and topographical control for the resource estimate.

If it is not known and only the down hole lengths are reported, there should be a clear statement to this effect (e.g. ‘down hole length, true width not known’.

No drilling intercepts are being reported.

Diagrams

Appropriate maps and sections (with scales) and tabulations of intercepts should be included for any significant discovery being reported. These should include, but not be limited to a plan view of the drill collar locations and appropriate sectional views.

In exploration results and plan view for the samples used in relation to the metallurgical composite test work conducted in this announcement, are included in Sovereign’s announcements dated 30 March 2021, 18 August 2021 and 15 March 2022.

 

These are accessible on the Company’s and on the ASX websites.

Balanced reporting

Where comprehensive reporting of all Exploration Results is not practicable, representative reporting of both low and high-grades and/or widths should be practiced to avoid misleading reporting of exploration results.

All results are included in this report and in previous releases. These are accessible on the Company’s webpage.

Other substantive exploration data

Other exploration data, if meaningful and material, should be reported including (but not limited to: geological observations; geophysical survey results; geochemical survey results; bulk samples – size and method of treatment; metallurgical test results; bulk density, groundwater, geotechnical and rock characteristics; potential deleterious or contaminating substances.

Limited lateritic duricrust has been variably developed at Kasiya, as is customary in tropical highland areas subjected to seasonal wet/dry cycles. Lithological logs record drilling refusal in just under 2% of the HA/PT drill database. No drilling refusal was recorded above the saprock interface by AC drilling.

Sample quality (representivity) is established by geostatistical analysis of comparable sample intervals.

 

Further work

The nature and scale of planned further work (e.g. test for lateral extensions or depth extensions or large-scale step-out drilling).

Having recently completed an OPFS, the Company is working towards completing a definitive feasibility study.

Diagrams clearly highlighting the areas of possible extensions, including the main geological interpretations and future drilling areas, provided this information is not commercially sensitive.

Refer to diagrams disclosed previous releases. These are accessible on the Company’s website as discussed above.

 

#BRES Blencowe Resources PLC – Annual Financial Report

Blencowe Resources Plc, the natural resources company focused on the development of the Orom-Cross Graphite Project in Uganda, is pleased to announce its audited financial results for the year ended 30 September 2024 (the “Annual Report”) and it’s notice of Annual General Meeting (“Notice of AGM”).

The Annual Report which includes an unqualified audit report and audited Financial Statement for the year ended 30 September 2024 & The Notice of AGM and the associated Form of Proxy will be made available on the Company’s website at www.blencoweresourcesplc.com.  Hard copies will be posted to the Company’s shareholders.

For further information, please contact:

 

Blencowe Resources

Sam Quinn

 

www.blencoweresourcesplc.com

Tel: +44 (0) 1624 681 250

info@blencoweresourcesplc.com

 

Investor Enquiries

Sasha Sethi

Tel: +44 (0) 7891 677 441

sasha@flowcomms.com

 

Tavira Financial Limited

Jonathan Evans

Tel: +44 (0)20 7100 5100

jonathan.evans@tavirasecurities.com

 

First Equity Limited

Jason Robertson

Tel: +44 (0)203 192 1733

jasonrobertson@firstequitylimited.com

Chief Executive Officer’s Statement for the period ended 30 September 2024

Shareholders and Stakeholders,

As we continue this journey to unlock the enormous value within the Orom-Cross graphite project I am pleased to share with you some of the progress we have made over the last 12 months.

Graphite remains an integral part of the global energy transition due to its non-replaceable role within the lithium-ion battery that stores all renewable energy. There are many other commercial applications for graphite through its primary qualities, being high heat resistance and high conductivity, but it is the role within batteries that most analysts are forecasting accelerated growth ahead, as the world moves away from fossil fuels.

Whilst some analysts consider this energy transition “yesterday’s news” due to a perceived slow-down in demand for electric vehicles, we do not agree.  In fact, we’d suggest the transition has not even yet begun in earnest, and graphite as a critical mineral will very definitely have its day in the sun; particularly as we do not envisage most other graphite projects making it through to production status ahead.  This will ultimately create a demand-supply imbalance and a huge opportunity for those projects that do ultimately mine and process graphite and sell it into voracious world markets.

We therefore remain bullish for the future, and our efforts over the past 12 months have largely been focussed on how we complete the Orom-Cross Definitive Feasibility Study (DFS) as the main requirement prior to decision to mine, project funding, and ultimately production.

The DFS has three key elements within: firstly, all mining, plant and infrastructure requirements at site, secondly securing offtaker partners to sign sales agreements, and thirdly funding – both short term (to complete the DFS itself) and long term (to fund the project).  All these elements carry equal weight and are critical to the successful completion of the study.

Together with our lead partner, CMC Engineering, our team has defined all requirements at site and we are significantly advanced through the process of design works, identifying plant and equipment suppliers, considering various Engineering, Procurement and Construction (EPC) and other contractors necessary to build the project, and costing everything.  What is emerging is that Orom-Cross will be one of the lowest cost (both operating and capital costs) graphite projects worldwide, which will be  a significant achievement and a huge boost to ultimately bring the mine into production.

The process of getting our end-products qualified in the graphite market, with resultant ability to engage and ultimately sign offtake contracts, is challenging.  We had two options, to either build our own pilot testing facility on-site to showcase end-products to the Original Equipment Manufacturers (OEMs), or to use existing pilot testing facilities elsewhere (a more cost-effective route).  We chose the latter and after sending 600 tonnes of raw material to China in early 2024 we delivered circa 30 tonnes of concentrate, and ultimately 7-8 tonnes of purified SPG (spheronised purified graphite) which is the end-product that goes into the lithium-ion battery.  This end-product is now being tested at various OEM facilities as the final step before offtake discussions.  To date all testing has been positive and we are confident we will emerge from this process with tier one partiers with whom we will sell product into ahead.  This qualification has taken other graphite peers up to 4 years to complete and we can be proud of the fact we have largely completed this exercise in just 18 months.

Blencowe announced its first offtake MOU for large flake concentrate in mid-2024 and we anticipate others to follow shortly.  What is emerging is that Orom-Cross can deliver some of the highest quality graphite worldwide, which bodes well for future sales relationships as quality is paramount in this industry.  We will finalise all bulk sample testing shortly and move MOUs into offtake agreements in 2025.

The third key DFS activity is funding, and we continue to build strong funding relationships that are ultimately the foundation of successful implementation.  As previously reported, Blencowe received a US$5 million technical assistance grant from the US Government, via their private sector lending arm the Development Finance Corporation (DFC), and to date US$3.5M of this grant has been disbursed to Blencowe.  This support has been critical, and aside from the credibility our relationship with DFC provides we are confident this tier one financial institution will play a cornerstone role in the overall funding solution for Orom-Cross implementation.  Other financial institutions have also engaged with us and we are building a strong base upon which we can be confident will ultimately bear fruit, and deliver the substantial capital requirement to build our mining project.

Most recently Blencowe was awarded full accreditation by the Minerals Security Partnership (MSP) which is an influential body formed by 14 of the largest economies in the world, designed to support mining projects that might address the critical minerals supply issues that the world faces.  This is very prestigious as accreditation has only been awarded to a select few projects worldwide and it now puts Orom-Cross on many radars.  Whilst this relationship is still in its early stage we are confident this will bring in further support for Orom-Cross ahead as the MSP grows in stature.

Blencowe is emerging as a unique, differentiated mining and processing strategy and over the past year considerable effort has been placed on building a relationship with experienced parties that can assist the Company to move into the downstream processing part of the graphite cycle.  This is where the most substantial profits are made in this industry.  In September 2024 Blencowe announced a partnership that has been formed with one of the most significant SPG producers in the world, which paves the way for this downstream beneficiation strategy to play out.  The plan is to jointly build an SPG facility near to Orom-Cross to become an offtaker for life of mine, to beneficiate the concentrate and sell purified graphite products into world markets.  This would be some of the first purified graphite produced outside of China and would likely deliver a premium as OEMs are seeking this product delivered ex-China to reduce their risk exposure.  A downstream SPG facility DFS is underway to assess the full commercial outcome of this strategy and it is anticipated that this standalone DFS will be completed in parallel with the Orom-Cross DFS to assess both projects together as they are intertwined.

As can be seen this has been another busy year and the DFS continues to keep the management team occupied.  Despite many challenges in the macro-market Blencowe has managed to keep the project moving forward and hopes to complete the DFS around mid-2025.  Every way by which we can add further value is being considered and other exciting relationships and initiatives will emerge as progress continues.

We continue to build and deepen relationships within Uganda and we appreciate all the support given to us by parties within that country, at all levels.

I would particularly like to applaud our operational management team, led by COO Iain Wearing, and our Ugandan team, led by our Country General Manager Nabil Alam. They have been doing a fantastic job and continue to do so.

I would also like to thank our shareholders and the wider market for your support, and in particular our major shareholders who have stuck by us through what have been difficult market conditions. We offer a unique and differentiated strategy and a graphite project which is the envy of many. We hope that we can continue to justify your faith and your investment in all we do moving forward.

Mike Ralston

Chief Executive officer

30 January 2025

Strategic Report for the year ended 30 September 2024

The Directors present the Strategic Report for the year ended 30 September 2024.

Results

The results are set out in the Consolidated Statements of Comprehensive Income on page 29. The total comprehensive loss attributable to the equity holders of the Group for the year was £902,801 (2023: £1,366,685).

The Group paid no distribution or dividends during the year (2023: Nil).

Business model, review of the business and future developments

The Group’s principal activity is the exploration of Orom-Cross Graphite Project in Northern Uganda, which it owns through its 100% subsidiary Consolidated African Resources Limited ‘CARU’. Blencowe also has a 100% owned subsidiary, Blencowe Battery Mines Uganda- SMC Limited which is a dormant Company.

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

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

Key performance indicators (KPIs)

Financial KPIs

Results for the year

With no income in the year the Group continues to monitor the loss before tax to ensure the continued viability of the Group and ability to continue to develop the Orom-Cross Graphite Project. The Group has made a loss before tax of £961,941 for the year ended 30 September 2024 (2023: loss before tax of £1,397,967).

Exploration expenditure – funding and development costs

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

The Group incurred £2,846,130 (2023: £1,450,063) of capitalised exploration costs. These exploration costs are in line with the Board expectations.

In 2024 the Group raised funds of £825,023 net of issue costs (2023: £1,313,820) from the equity markets. This amount was used to pay for the continued development of the Orom-Cross Graphite project and other working capital costs.  Please see note 20 for events after the year end.

At 30 September 2024 the Group had a cash balance of £114,694 (2023: £129,853).

Employees

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

Social, Community and Human Rights Issues

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

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

Since the acquisition of CARU the Group has donated to local causes, such as a scholarship programme. In February 2024 the group donated to the local school, supplies of notebooks, stationery supplies and sporting equipment to assist students at the start of the new school year. As a part of the activities to define the water resources required for the project, the company undertook to refurbish three (3) bores within the local community , and to install new solar power supply, off take points and pumps as well as infrastructure to install a water supply to the local school and community health clinic. The Group will continue to donate to the local communities around the region of Uganda in which the Project Licences are located.

Principal risks and uncertainties and risk management

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

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

Geological risks

Exploration activities are speculative in nature, and involve many geological considerations. They may not be successful in identifying commercial mineral resources. Following any discovery, it can then take several years from the initial phases of drilling and identification of mineralisation until construction of the infrastructure and production is possible, during which time the economic feasibility of production may change.

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

On 11 January 2023 the Ugandan Government approved a landmark one-off permit for Blencowe to export bulk sample graphite from Orom-Cross for key Metallurgical final testing. 100 tonnes of bulk samples were mined, and fast track delivered to China by air freight for initial off -site testing with a Chinese experienced graphite processing specialist Jilin Huiyang New Material Technology Company Limited. Blencowe also send an additional 5kg of concentrate to Chicago-based graphite specialist AET Co, which is a recognized industry expert in SPG (spheronised purified graphite) and expandability testing.

On 23 January 2023, the group appointed a leading firm from Perth, CPC Engineering to lead, develop and sign off the Definitive Feasibility study. The Group uses other advisors with specialist knowledge in mining and related environmental management for reducing the impacts of environmental risk.

On 12 February 2024 the Ugandan Government approved an additional landmark one-off permit for Blencowe to export bulk sample graphite from Orom-Cross for key Metallurgical final testing. 600 tonnes of bulk samples were mined, and fast track delivered to China by sear freight for initial off -site testing with a Chinese experienced graphite processing specialist Jilin Huiyang New Material Technology Company Limited. The processing of the additional Bulk sample and the associated generation of approximately 25t of concentrate enabled Blencowe to send materials to specialized firms to generate  Spheronised Purified Graphite (SPG) and test the OROM-Cross product in a commercial quantity for suitability for off-take parties. Blencowe also sent an additional 5kg of concentrate to Chicago-based graphite specialist AET Co, which is a recognized industry expert in the Graphite industry to generate and test the OROM-Cross concentrate for micronisation processes.

In July 2024 Blencowe appointed Environmental Geochemistry International (EGI) to assess the Geohydrology of the project area to ascertain the supply of water sufficient to sustain both the processing operations and the local communities. Several water bores were drilled, and modelling completed that confirmed the adequate supply of water to sustain both objectives over the life of the project.

Government regulation and political risk

The Group’s operating activities are subject to laws and regulations governing expropriation of property, health and worker safety, employment standards, waste disposal, protection of the environment, mine development, land and water use, prospecting, mineral production, exports, taxes, labour standards, occupational health standards, toxic wastes, the protection of endangered and protected species and other matters. While the Group believes that it is in substantial compliance with all material current laws and regulations affecting its activities, future changes in applicable laws, regulations, agreements or changes in their enforcement or regulatory interpretation could result in changes in legal requirements or in the terms of existing permits and agreements applicable to the Group or its properties, which could have a material adverse impact on the Group’s current operations or planned exploration and development projects. Where required, obtaining necessary permits and licences can be a complex, time consuming process and the Group cannot assure whether any necessary permits will be obtainable on acceptable terms, in a timely manner or at all. The costs and delays associated with obtaining necessary permits and complying with these permits and applicable laws and regulations could stop or materially delay or restrict the Group from proceeding with any future exploration or development of its properties. Any failure to comply with applicable laws and regulations or permits, even if inadvertent, could result in interruption or closure of exploration, development or mining operations or material fines, penalties or other liabilities.

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

Pricing risk

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

Commodity and currency risk

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

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

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

Financing

On 27 April 2023 the Group announced that it had found a strategic funding partner for the Orom-Cross Graphite project, and this was completed on 22 September 2023. The Development Finance Corporation (DFC) engaged to fund 50% of Project Definitive Feasibility Study costs by way of a technical assistance grant. 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 critical.  As of 30 September 2024, the Group received $3.5 million of the $5 million technical grant funding from the Development Finance Corporation. The Group is likely to remain cash flow negative for some time and, although the Directors have confidence in the future revenue earning potential of the Group from its interests in the Orom-Cross Graphite Project, there can be no certainty that the Group will achieve or sustain profitability or positive cash flow from its operating activities. With regards to future capital expenditure on the Orom-Cross Graphite Project, the Company will need to raise additional capital during the next 12 months in order to fully fund completion of the Definitive Feasibility Study.

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

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

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

Environmental and safety

The Orom-Cross Graphite Project is still at an early stage of project development and further consideration will need to be given to environmental and social issues affecting the Orom-Cross Graphite Project. During the year the Company undertook to revise the Environmental and Social Impact Assessment (ESIA) to account for the expanded project over the scale of project outlined in the original ESIA and Environmental operating licence granted by the Ugandan Environmental Agency NEMA -National Environmental Management Agency). The updated ESIA was undertaken in consideration of future funding partners with close adherence to the guidelines issued by IFC, EU and the Equator Principles. The revised ESIA was Submitted in September 2024 and is currently being assessed by NEMA. Along with the ESIA the company’s Environmental consultants have generated 10 Environmental and social Management plans in areas such as Biodiversity, waste management, Mine Closure and Community Development.

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

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

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

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

The Group commenced development of the Environmental and Social Sustainability Governance guidelines which was independently assessed by an outside agency and an initial certification provided from which the Group will now work towards upgrading the certification levels.

Task Force on Climate -related Financial Disclosures (TCFD)

The Task Force on Climate-related Financial Disclosures was convened by the Financial Stability Board to produce a common global framework for companies to report on how climate change will affect their business.

To help investors and wider stakeholders understand how companies are managing climate related financial risks, the TCFD recommends that companies make disclosures across four key areas, often referred to as the four pillars.

The directors support the initiatives of the TCFD, and has prepared disclosures to a level of detail that the directors consider to be consistent with the TCFD recommended disclosures, and as appropriate to the current position of the Group as an exploration entity.

The directors consider that several of the specific disclosures sought under TCFD recommendations will be less meaningful to users at the current stage of the Company’s Orom-Cross Project and will have greater relevance at the conclusion of the DFS (due to be completed by the end of May 2025) and following the commissioning of the Orom-Cross Project.

1.         Governance

The Company view climate related risks and opportunities as growing in importance. The Board is ultimately responsible for the oversight and compliance with local environmental laws at its exploration location in Uganda, together with assessment of the impact of climate change on risk to the organisation.

In advance of commissioning the project operations, the Group will establish a Sustainability Committee, comprising the Chairman, the Chief Executive Officer and a non-executive director, that will guide and support the Group’s environmental approach and plans with respect to climate-related matters. The Committee will also consider and set appropriate Group policies that will govern how management assess and manage the risks and opportunities following commissioning.

Management of the group, who are involved with the ongoing DFS are responsible for assessing and managing climate – related risks and opportunities through the current study process. The DFS will incorporate these factors into assessments related to the ESIA (environmental and social impact assessment) and ESG (environmental, social and governance) components of the study.

2.         Strategy

The Group’s project at Orom-Cross is currently in the stage of completing its Definitive Feasibility Study, the outcome of which in 2025 will include more detail and assessment to define the Group’s strategic approach to climate-related matters.

The current global movement towards clean energy and storage solutions, in which graphite forms an integral part, together with technological advances in the use of graphite are an exciting opportunity for the Group to be a significant part of sustainable energy solutions. As an example of these solutions, the Group is focussing on current developments (and ongoing improvements) in the use of electric and Hybrid vehicles in the excavation and transport in the mining operations as well as logistic solutions for both project consumables and final products.

3.         Risk management

Identification and assessment of climate related risks and opportunities in relation to the Group’s activities is performed by management on an ad-hoc basis. Management have not assessed there to be any significant climate-related risks that impact on the current exploration activity in Uganda.

The Group is currently completing the DFS, which will include ESIA and ESG assessments that will assist management to detail the climate related risks and opportunities relating to development of the project. Identification and mitigation of these risks will be addressed by the planned Sustainability Committee described in the Governance section of this statement.

At this time the Group operates no corporate offices either for the management team, or in Uganda, and has no operational graphite production activity. As such management have assessed that no significant greenhouse gas (GHG) emissions are currently produced.

As the project progresses through the DFS, the risk management framework is somewhat fluid and will be analysed, adapted and expanded as the various study components of the DFS develop.  The Group is identifying and developing a ‘leave no trace’ solution to development wherever possible including utilising renewable energy supply and electrification options for operations. These actions will be included in the output of the DFS.

Management have not identified any climate-related scenarios that are expected to impact the resilience of the current exploration works performed by the Group. Assessment of different climate scenarios will be included in the works performed for the DFS.

During the year the Group completed a revised ESIA to cover the enlarged project scope and the introduction of project alternatives to reduce risk in this area such as the use of dry stack tailings 100% use of grid Hydropower. The ESIA is currently under review by the relevant government authorities and is expected to be approved in the first quarter of 2025. The Group also undertook an independent assessment of its current ESG policies and procedures as a base metric at the early stage of the project and to identify gaps and shortcomings for continual risk reduction as the DFS is completed and the project moves to implementation phases.

4.         Metrics and targets

The Company will define the metrics and performance targets to assess the climate-related risks and opportunities in line with its strategy and risk management processes once the Orom-Cross operation has been commissioned. Initially some of these will be outlined as part of the ESIA and ESG assessments currently being undertaken for the project DFS.

As the current exploration operations of the Group have a minimal physical presence, Greenhouse Gas emissions are not currently recorded. However as part of the ESIA and ESG study works, the Group is developing the systems and reporting standards to track these in preparation for development of the project. The project reporting and management systems to provide reporting on Greenhouse and CHG are currently being finalised following assessment under the independent ESG certification and as a management plan commitment under the ESIA. The Group are seeking to test the reporting as part of the exploration drill program planned for Q1 2025. The development of the operations and processing routes is an evolving process, as we develop the DFS we are assessing and designing on processes that will improve on the GHG and carbon off-sets. As the DFS is not yet completed and the processes still in evaluation the reporting metrics for the project are being developed by the ESG team in parallel.

Taxation

 

In the prior financial year, following an inspection by the Ugandan Revenue Authority (URA) of the tax affairs of Consolidated African Resources Uganda (“CARU”) covering the period between January 2014 and December 2022, the Group has incurred a capital gains tax charge of £392,425 as set out in Note 8 to the Financial Statements. This charge related to the acquisition by the Company of CARU in 2019. The amount was chargeable to the former owners, however this was not settled by them and under Ugandan legislation the liability is reclaimable from the acquirer if it cannot be obtained from the seller. The Group has agreed to a payment plan with URA and is currently paying the liability.

 

Section 172 Statement

 

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

The requirements of section 172 are or the Board to:

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

·      act fairly between the members of the Group,

·      maintain a reputation for high standards of business conduct,

·      consider the interest of the Group’s employees,

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

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

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

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

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

 

 

 

Cameron Pearce

Director
30 January 2025

Directors’ Report for the year ended 30 September 2024

The Directors submit their report with the audited Financial Statements for the year ended 30 September 2024.

General information

Blencowe Resources Plc (“the Company”) is a public company incorporated in England & Wales.

Blencowe’s primary focus is on exploration of the Orom-Cross Graphite Project located in Northern Uganda.

Results for the year and distributions

The Group results are set out in the Consolidated Statements of Comprehensive Income. The total consolidated comprehensive loss attributable to the equity holders of the Group for the financial year was £902,801 (2023: £1,366,685). The Group received no income, and the full amount of the loss is due to expenses incurred in capital raising (to the extent not deducted from share premium), and general corporate overheads.

The Group paid no distribution or dividends during the financial year (2023: £Nil).

The Board of Directors

The Directors who held office during the financial year and to the reporting date, together with details of their interest in the shares of the Company at the reporting date were:

Number of Ordinary Shares

Percentage of Ordinary Shares

Sam Quinn

4,916,667

2.17%

Cameron Pearce

7,516,667

3.32%

Alexander Passmore

1,550,000

0.68%

The Board comprises of one Executive Director and two Non-Executive Directors as detailed below:

Cameron Pearce – Executive Chairman

Cameron Pearce was a founder of the Company and has extensive professional experience in both the Australian and United Kingdom finance industries. In recent times he has provided corporate, strategic, financial and advisory assistance to private and public companies in both Australia and the United Kingdom. Mr Pearce is a member of the Australian Institute of Chartered Accountants and has been in commerce over twenty years holding senior financial and management positions in both publicly listed and private enterprises in Australia, Europe, Asia, Africa and Central America. Mr Pearce has considerable corporate and international expertise and over the past decade has focussed on mining and exploration activities.

Sam Quinn – Non Executive Director                                                   

Sam Quinn is a corporate lawyer with over a decade’s worth of experience in the natural resources sector, in both legal counsel and executive management positions. Mr Quinn was formerly the Director of Corporate Finance and Legal Counsel for the Dragon Group, a London-based natural resources venture capital firm and is currently a partner of Silvertree Partners, a natural resource focussed back office outsourcing business. Mr Quinn has in addition held several management roles for listed and unlisted natural companies and has gained significant experience in the administration, operation, financing and promotion of natural resource companies. Prior to working in the natural resources sector, Mr Quinn worked as a corporate lawyer for Jackson McDonald Barristers & Solicitors in Perth, Western Australia and for Nabarro LLP in London.

Alex Passmore – Non Executive Director

Alex Passmore is an experienced corporate executive with strong financial and technical background. Mr Passmore managed the arrangement of debt for many well-known resources companies and has a wealth of experience in project evaluation. He also managed the WA natural resources business of CBA which comprised a substantial portfolio of loan, hedge, trade finance and working capital products to ASX-listed and multi-national resource companies. Prior to this, Mr Passmore held senior roles at Patersons Securities and was director of corporate finance and head of research. Mr Passmore holds a BSc (Hons) in Geology from the University of Western Australia and a graduate diploma of Applied Finance and Investments from the Institute of Securities Australia.

Directors’ indemnities

To the extent permitted by law and the Articles, the Company has made qualifying third-party indemnity provisions for the benefit of its directors during the year, which remain in force at the date of this report.

 

Policy for new appointments

Without prejudice to the power of the Company to appoint any person to be a Director pursuant to the Articles the Board shall have power at any time to appoint any person who is willing to act as a Director, either to fill a vacancy or as an addition to the existing Board, but the total number of Directors (other than alternate directors) must not be less than two and must not be more than 15 in accordance with the Articles. Any Director so appointed shall hold office only until the annual general meeting of the Company next following such appointment and shall then be eligible for re-election but shall not be taken into account in determining the number of Directors who are to retire by rotation at that meeting. If not re-appointed at such annual general meeting, he shall vacate office at the conclusion thereof.

Rules for amendments of articles

Directors cannot alter the Company’s Articles unless a special resolution is approved by the shareholders. A special resolution requires at least 75% of a company’s members to vote in favour for it to pass.

Substantial shareholders

The share capital of Blencowe consist of only one class: ordinary shares. Therefore, all of the Company’s shares rank pari passu and no preferential rights apply. No single person directly or indirectly, individually or collectively, exercises control over the Company. The Directors are aware of the following persons, who had an interest in 3% or more of the issued ordinary share capital of the Company as at 31 December 2024:

Shareholder

% of issued share capital of the Company

Pershing Nominees Limited

 18.97%

Hargreaves Lansdown (Nominees) Limited

14.18%

Interactive investors services Nominees Limited

8.64%

Morgan Stanley Client Securities Nominees Limited

7.49%

JIM Nominees Limited

5.95%

Lawshare Nominees Limited

4.83%

ADT Drilling Limited

4.18%

Vidacos Nominees Limited

4.11%

The Bank of New York (Nominees) Limited

3.73%

The Directors are not aware of any changes in interests between 31 December 2024 and the date of approval of the financial statements.

Financial risk management

The Group’s principal financial instruments comprise cash and cash equivalents, trade and other payables and trade and other receivables arising in the normal course of its operations.

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt.

The Group’s activities expose it to a variety of financial risks: market risk, credit risk, liquidity risk and cash flow interest rate risk. See note 18.2 for more information on the financial risk management objectives and policies.

Greenhouse Gas (GHG) Emissions

The energy consumption has not been disclosed as the Group’s consumption is below 40,000 kWh

Responsibility statement

The Directors are responsible for preparing the Annual Report and the Financial Statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law, the Directors have elected to prepare the financial statements in accordance with UK adopted international accounting standards. Under company law, the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs and profit or loss of the Company and Group for that period.

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

·    select suitable accounting policies and then apply them consistently;

·    make judgements and accounting estimates that are reasonable and prudent;

·    state whether UK adopted international accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

·    prepare the financial statements on a going concern basis, unless it is inappropriate to presume that the Company will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company and Group to enable them to ensure that the financial statements comply with the requirements of the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are responsible for preparing the Annual Report in accordance with applicable law and regulations. The Directors consider the Annual Report and the financial statements, taken as a whole, provide the information necessary to assess the Group’s position, performance, business model and strategy and are fair, balanced and understandable.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Directors’ responsibilities pursuant to DTR4

The Directors confirm to the best of their knowledge:

·    the financial statements have been prepared in accordance with UK adopted international accounting standards and give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group; and

·    the management report includes a fair review of the development and performance of the business and the financial position of the Group, together with a description of the principal risks and uncertainties that they face.

Embed effective risk management, considering both opportunities and threats, throughout the organisation

The Directors are responsible for maintaining the Group’s systems of controls and risk management in order to safeguard its assets.

Risk is monitored and assessed by the Board who meet regularly and are responsible for ensuring that the financial performance of the Group is properly monitored and reported. This process includes reviews of annual and interim accounts, results announcements, internal control systems, procedures and accounting policies.

Subsequent events

Please see note 20 for details of the Group’s subsequent events.

Directors’ confirmation

So far as the directors are aware, there is no relevant audit information of which the Group’s auditors are unaware, and they have taken all steps that they ought to have taken as directors in order to make themselves aware of any relevant audit information and to establish that the Group’s auditors are aware of that information.

Auditors

The auditors, Crowe U.K LLP, have expressed their willingness to continue in office and a resolution to reappoint them will be proposed at the Annual General Meeting.

 

 

By Order of the Board

Cameron Pearce

Director
30 January 2025

Corporate Governance

 

The Group recognises the importance of, and is committed to, high standards of Corporate Governance.  Whilst the Group is not formally required to comply with the UK Corporate Governance Code 2018, the Group will try to observe, where practical, the requirements of the UK Corporate Governance Code 2018, as published by The Financial Reporting Council.

The Company intends to voluntarily observe the requirements of the UK Corporate Governance Code 2018, save as set out below. As at the date of the financial statements the Directors consider the Group to be in compliance with the UK Corporate Governance Code 2018 with the exception of the following:

·    The Company does not comply with the requirements of the UK Corporate Governance Code in relation to the requirement to have a senior independent director and the Audit Committee does not have three independent non-executive directors. The Nomination & Remuneration Committees also do not include independent directors.

·    Due to the current size of the company, and the early stages of the Project’s life cycle, the Company has not developed a formal diversity policy, and investment in and rewarding of the workforce. Furthermore, there have been no board evaluations conducted within the year.

·    All directors are not subject to annual re-election. Instead at least one third of the current directors are put forward for re-election at each annual general meeting, in accordance with the Company’s Articles of Association.

·    Remuneration for the non-executive directors includes share options. The awards are made in accordance with the Company’s remuneration policy.

·    The Board does not consider there to be a need for a formal succession plan at this stage, but this will be monitored as the size and complexity of the Company’s activities develop.

As at the date of the financial statements, the Board has a share dealing code that complies with the requirements of the Market Abuse Regulations. All persons discharging management responsibilities (comprising only the Directors at the date of this Document) shall comply with the share dealing code from the date of Admission.

Set below are Blencowe Resources Plc’s corporate governance practices for the year ended 30 September 2024.

Leadership

The Company is headed by an effective Board which is collectively responsible of the long-term success of the Company.

The role of the Board – The Board sets the Company’s strategy, ensuring that the necessary resources are in place to achieve the agreed strategic priorities, and reviews management and financial performance. It is accountable to shareholders for the creation and delivery of strong, sustainable financial performance and long-term shareholder value. To achieve this, the Board directs and monitors the Company’s affairs within a framework of controls which enable risks for the future success of the business to be assessed and managed effectively. The Board also has responsibility for setting the Company’s core values and standards of business conduct and for ensuring that these, together with the Company’s obligations to its stakeholders, are widely understood throughout the Company. The Board has a formal schedule of matters reserved which is provided later in this report.

The Company aims to generate and preserve value over the long-term primarily through the development of its principal asset, the Orom-Cross Graphite project in the Republic of Uganda. The Company has previously completed a preliminary feasibility study on the project and is now in the process of completing a definitive feasibility study which will provide a risked and independent project valuation to international standards. The DFS process is rigorous and will result in an examination of all aspects of the project including economic viability, principal risks as well as engineering and geological matters.

Board Meetings – The core activities of the Board are carried out in scheduled meetings of the Board. These meetings are timed to link to key events in the Company’s corporate calendar and regular reviews of the business are conducted. Additional meetings and conference calls are arranged to consider matters which require decisions outside the scheduled meetings. During the year, the Board met on 6 occasions. Any concerns identified that cannot be resolved in these meetings will be documented in written form to the Chairman and recorded in the formal minutes of the Company.  In addition to the

Board meetings linked to corporate transactions, the directors consider on an ad hoc, non-formal basis their effectiveness and relevance, and that of management.

 

Outside the scheduled meetings of the Board, the Directors maintain frequent contact with each other to discuss any issues of concern they may have relating to the Company or their areas of responsibility, and to keep them fully briefed on the Company’s operations.

Matters reserved specifically for Board – The Board has a formal schedule of matters reserved that can only be decided by the Board. The key matters reserved are the consideration and approval of:

·      the Group’s overall strategy;

·      financial statements and dividend policy;

·      management structure including succession planning, appointments and remuneration;

·      material acquisitions and disposal, material contracts, major capital expenditure projects and budgets;

·      capital structure, debt and equity financing and other matters;

·      risk management and internal controls;

·      the Group’s corporate governance and compliance arrangements; and

·      corporate policies

Summary of the Board’s work in the financial year – During the year, the Board considered all relevant matters within its remit, but focused in particular on exploration and development of the Orom-Cross Graphite Project.

Attendance at meetings:

Member

Meeting attended

Cameron Pearce

Executive Chairman

5

Sam Quinn

Non-Executive Director

5

Alexander Passmore

Non-Executive Director

6

 

The Board is pleased with the level of attendance and participation of Directors at Board and committee meetings.

The Chairman, Cameron Pearce, sets the Board Agenda and ensures adequate time for discussion.

Non-executive Directors – The non-executive Directors bring a broad range of business and commercial experience to the Company and have a particular responsibility to challenge independently and constructively the performance of the Executive management (where appointed) and to monitor the performance of the management team in the delivery of the agreed objectives and targets.

Non-executive Directors – Are initially appointed for a term of three years, which may, subject to satisfactory performance and re-election by shareholders, be extended by mutual agreement.

Other governance matters – All of the Directors are aware that independent professional advice is available to each Director in order to properly discharge their duties as a Director. In addition, each Director and Board committee has access to the advice of the Company Secretary.

The Company Secretary – The Company Secretary is FIM Secretaries IOM Limited which was appointed on 1 November 2024. FIM Secretaries IOM Limited is available to Directors and advises the Board on UK compliance matters.

Effectiveness

For the period under review the Board comprised of an Executive Chairman and two non-executive Directors.

The Directors are of the view that the Board and its committees consist of Directors with an appropriate balance of skills, experience, independence and diverse backgrounds to enable them to discharge their duties and responsibilities effectively.

The Board believes it has the correct balance of skills, reflecting a broad range of commercial and professional skills across geographies and relevant industries that is necessary to ensure the Company is equipped to deliver its investment objective. Additionally, each Director has experience in public markets.

The Directors and their roles and key personnel are displayed on the Company’s website: Management & Directors – Blencowe Resources (blencoweresourcesplc.com)

Independence – None of the Directors are considered to be independent, as they have shareholdings in the Company as noted on page 11.  It is intended that additional Directors will be appointed in future and that independence will be one of the key factors considered at that time. As at the date of this Report no prospective Directors have been identified and no arrangements exist (formal or informal) for the appointment of any other Director.

Appointments – The Board is responsible for reviewing the structure, size and composition of the Board and making recommendations to the Board with regards to any required changes. The non-executive directors informally scrutinise and hold to account the performance of management and the Executive Chairman, there are no other Executives on the Board. The Board are satisfied with the current size and composition of the Board and management.

Commitments – All Directors have disclosed any significant commitments to the Board and confirmed that they have sufficient time to discharge their duties.

Induction – All new Directors received an induction as soon as practical on joining the Board.

Conflict of interest – A Director has a duty to avoid a situation in which he or she has, or can have, a direct or indirect interest that conflicts, or possibly may conflict with the interests of the Company. The Board had satisfied itself that there is no compromise to the independence of those Directors who have appointments on the Boards of, or relationships with, companies outside the Company. The Board requires Directors to declare all appointments and other situations which could result in a possible conflict of interest.

Accountability

The Board is committed to provide shareholders with a clear assessment of the Group’s position and prospects. This is achieved through this report and as required other periodic financial and trading statements.

Going concern – As part of their going concern assessment set out in note 2.3, the Board of Directors have reviewed cash flow forecasts for the 12 months from the date these financial statements were signed and considered the medium-term outlook through to December 2027 as described in the Viability Statement. The Directors have a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over the period to December 2027, provided further funding can be raised as required. Due to the requirement to raise additional funding, a material uncertainty with regard to going concern has been disclosed at note 2.3.

Risk is monitored and assessed by the Board as a whole and are responsible for ensuring that the financial performance of the Company is properly monitored and reported. This process includes reviews of annual and interim accounts, results announcements, internal control systems, procedures and accounting policies. Risk management is carried out by the Board of Directors. The Board identifies and evaluates financial risks, and the key risk factors for the Company are contained in the Financial Statements for the year ended 30 September 2024.

Internal controls – The Board of Directors reviews the effectiveness of the Company’s system of internal controls in line with the requirement of the Code. The internal control system is designed to manage the risk of failure to achieve its business objectives. This covers internal financial and operational controls, compliance and risk management.  Key controls consist of segregation of duties, authorisation and approval policies and accounting controls such as monthly reconciliations. The Directors consider the Company has appropriate and effective internal controls in place for the year under review and up to the date of approval of the Annual Report and Financial Statements. The Directors acknowledge their responsibility for the Company’s system of internal controls and for reviewing its effectiveness. Risk is monitored, assessed and managed by the Board as a whole who are responsible for ensuring that the financial performance of the Company is properly monitored and reported. This process includes reviews of annual and interim accounts, results announcements, internal control systems, procedures and accounting policies. The finance function is outsourced to FIM Capital Limited and details of the duties performed are in a formal agreement. The Board confirms the need for an ongoing process for identification, evaluation and management of significant risks faced by the Company. The Directors carry out a risk assessment before signing up to any commitments.

The Audit Committee

The Audit Committee consists of Cameron Pearce, Chair of the Committee, and Alex Passmore. It aims to meet at least twice a year and is responsible for ensuring that the Group’s financial performance is properly monitored, controlled, and reported to the Board. During the review year, the Audit Committee met twice.

The Committee oversees the scope and effectiveness of the external audit and ensures the Group complies with statutory and other regulatory requirements. Given the size of the Group and the relative simplicity of its systems, the Board has determined that there is currently no need for an internal audit function. The existing procedures for internal financial control, including expenditure controls, regular reconciliations, and management accounts, are deemed appropriate for a Group of this size. The need for an internal audit function will remain under review as the Group’s operations evolve and become more complex, particularly with the planned development of the project.

In line with the UK Corporate Governance Code, the Audit Committee’s work during the year included:

·      Reviewing significant issues relating to the financial statements, such as the assessment of impairment of intangible assets, and ensuring these were appropriately addressed.

·      Assessing the independence and effectiveness of the external audit process, which included considering the approach to the appointment or reappointment of the external auditor. The Committee reviewed the length of tenure of the current audit firm, discussed when a tender was last conducted, and provided advance notice of any retendering plans, where applicable.

·      Evaluating how auditor independence and objectivity are safeguarded, particularly when non-audit services are provided by the external auditor.

The Audit Committee monitors in discussion with the auditors:

·      The integrity of the Group’s financial statements and significant financial reporting judgements, such as the assessment of impairment of intangible assets.

·      Any formal announcements relating to the Group’s financial performance.

·      The Group’s internal financial controls and risk management systems.

·      The external auditor’s independence and objectivity and the effectiveness of the audit process, taking into account relevant UK professional and regulatory requirements.

The Directors are responsible for taking all reasonably available steps to safeguard the Company’s assets and to prevent and detect fraud and other irregularities

External auditor’s independence

Since the last tender which was conducted in 2018, Crowe U.K LLP has acted as independent auditor for seven years. The Audit Committee have held discussions with the external auditors to confirm there are no non-audit services provided, and no other independence considerations they should be aware of.

Remuneration and Nominations Committee

A Remuneration and Nominations Committee was established during 2020 and is made up of the two non-executive directors. The Committee comprises Sam Quinn, chairman of the committee, and Alex Passmore. They are not considered to be independent directors. The Board considers the committee composition of two directors to be sufficient due to the size of the company at this time. The Remuneration and Nomination Committee meets at least annually and is responsible for setting the remuneration policy for all executive directors and the Company’s chairman, including any compensation payments; recommends and monitors the level and structure of remuneration for senior management; evaluates the board of directors and examines the skills and characteristics required of board candidates. During the year of review, the Remuneration and Nomination Committee met once.

Remuneration paid to Directors in the period under review is disclosed in the Directors’ Remuneration Report.

The Committee is dedicated to implementing a remuneration policy that promotes long-term incentives and aligns the interests of directors with those of shareholders. Share and option awards should be phased, contain performance milestones where appropriate and encourage long term participation.

The Committee considers in defining the remuneration policy that arrangements should be clear and transparent, should avoid undue complexity, and should be proportional to the services provided in delivering the Company’s strategy and purpose.

The Remuneration Committee to date has focused on share options and bonus payments as the main incentives for executives, given the stage of development of the Company and to further align senior management with shareholder interests. Typically share options are subject to vesting conditions, such as completion of feasibility studies or the introduction of strategic partners. In addition, share price hurdles have been used to provide further shareholder alignment. Given the nature of the Company as the developer of a mining project and the potential for rerating of the Company’s value as the project advances, having a direct equity exposure is deemed to be the most desirable form of management incentive. In addition, cash bonus payments are generally kept to a minimum to preserve the Company’s capital. Share options will typically expire three months following the cessation of employment.

In accordance with the Company’s Articles of Association, at every annual general meeting at least one third of the current directors who are subject to retirement by rotation will be put forward to retire.

Shareholder relations

Communication and dialogue – Open and transparent communication with shareholders is given high priority and there is regular dialogue with institutional investors, as well as general presentations made at the time of the release of the annual and interim financial results. All Directors are kept aware of changes in major shareholdings in the Company and are available to meet with shareholders who have specific interests or concerns. The Company issues its results promptly to the market via RNS and also publishes them on the Company’s website: www.blencoweresourcesplc.com. Regular market news updates are made in relation to the Company including the status of its exploration and development programme which is also included on the Company’s website. Shareholders and other interested parties can subscribe to receive news updates by email by registering online on the website free of charge.

The Directors are available to meet with institutional shareholders to discuss any issues and gain an understanding of the Company’s business, its strategies and governance. Meetings are also held with the corporate governance representatives of institutional investors when requested.

Annual General Meeting – At every AGM individual shareholders are given the opportunity to put questions to the Chairman and to other members of the Board that may be present. Notice of the AGM is sent to shareholders at least 21 working days before the meeting. Details of proxy votes for and against each resolution, together with the votes withheld are announced to the London Stock Exchange and are published on the Company’s website as soon as practical after the meeting.

Viability statement

 

In accordance with provision 31 of the UK Corporate Governance Code (2018), the Board has assessed the prospects of the Group over a three-year period, taking account of the Group’s current position and principal risks. For information regarding Group’s going concern position and funding requirements over the next twelve months, please see note 2.3.

 

Time frame

The Board believes that three years is currently the most appropriate time frame over which the Board should assess the long-term viability of the Group. The Group’s current activities do not generate any revenues or positive operating cash flow, and the completion of the Definitive Feasibility Study for the Orom-Cross Graphite Project will require further capital expenditures.

 

Assessing viability

The main assumption in the Board making its viability assessment is the ability of the Group to raise further funds in order to progress from the exploration phase into feasibility and eventually into production of revenues. The Group may not be able to obtain additional financing as and when needed which could result in a delay or indefinite postponement of exploration and development activities. The main development activities that the company will be focused on in the next 3years, dependent upon raising the funds required, will be the construction of the 5,000t/yr plant and commencement of production in quarter 2 2026, the commencement of construction of the 50,000t/yr processing plant in 2026 and production in 2027. The construction and operation of the SPG plant is expected to run in parallel with the 50,000t plant. The company will assess the commercial operations and costs in further detail with the DFS and ongoing assessment of the operations and costs during tendering and construction.

 

Principal risk

The Directors have conducted a robust assessment of the principal risks facing the Group as described on the preceding pages including those that threaten its business model, future performance, solvency or liquidity. The Directors are confident that they have put in place a strong management team with wide-ranging expertise in mineral exploration and development who are capable of dealing with the risk management in order to safeguard the Group’s assets. The directors are aware that the risks that could have the most adverse effect are funding and capital markets, potential other risks include the political risk in the country of business.

 

Based on the financial impact of the analysis outlined above and the associated risks, management actions and controls that are either in place or could be implemented, the Board expects that the Company will be able to deliver the Orom-Cross Graphite Project.

 

Confirmation of viability

Taking account of these matters, the Directors have a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over the period to December 2027, assuming that the financing referred to above is completed as described. The Company’s going concern statement is detailed in note 2.3.

 

 

By Order of the Board

Cameron Pearce

Director
30 January 2025

Directors Remuneration Report

 

Statement of Blencowe Plc’s policy on Directors’ Remuneration                  

The Directors’ Remuneration Report sets out the Company’s policy on the remuneration of Directors together with the details of Directors’ remuneration packages and services contracts for the year ended 30 September 2024.

As set out in the Company’s Prospectuses dated 30 March 2020 and 26 November 2024, each of the Directors may be paid a fee at such rate as may from time to time be determined by the Board. All the Directors are entitled to be reimbursed by the Company for travel, hotel and other expenses incurred by them in the course of their directors’ duties relating to the Company.

There have been no changes to the Directors’ remuneration or remuneration policy since the publication of the Company’s Prospectus dated 30 March 2020 with the exception of those mentioned below. The terms and conditions of appointment for all the members of the Board are available for inspection at our registered office.

Terms of employment

Cameron Pearce was appointed on 8 June 2018 by the Company to act as a Non-Executive Director and Chairman of the Company and from 1 July 2024 is paid fees of £120,000 per annum. If there is a change of control (as defined in the letter of appointment), Mr Pearce will be entitled to 100% of his annual fee as a lump sum payment if the Company terminates his employment, or if Mr Pearce chooses to terminate his appointment within 12 months following a change of control.

Sam Quinn was appointed on 8 June 2018 by the Company to act as a Non-Executive Director and from 1 July 2024 is paid fees of £60,000 per annum.  If there is a change of control (as defined in the letter of appointment), Mr Quinn will be entitled to 100% of his annual fee as a lump sum payment if the Company terminates his employment, or if Mr Quinn chooses to terminate his appointment within 12 months following a change of control.

Alex Passmore was appointed on 8 June 2018 by the Company to act as a Non-Executive Director and is from 1 July 2024 is paid fees of £24,000 per annum. If there is a change of control (as defined in the letter of appointment), Mr Passmore will be entitled to 100% of his annual fee as a lump sum payment if the Company terminates his employment, or if Mr Passmore chooses to terminate his appointment within 12 months following a change of control.

Remuneration policy

Base salary levels will take into account market data for the relevant role, internal relativities, the individual’s experience and their current base salary. Where an individual is recruited below market norms, they may be re-aligned over time (e.g. two to three years), subject to performance in the role. Benefits will generally be in accordance with the approved policy. Currently, there are no benefits in place.

The appointment of each Director may be terminated by either party on six months’ notice, which the Company considers to be an appropriate notice period to retain key personnel.

The Remuneration and Nomination Committee comprises Sam Quinn, who acts as chairman of the committee and Alex Passmore, and meets at least annually.  The Remuneration Committee reviews the scale and structure of the Directors’ fees, considering the interests of the shareholders and the performance of the Company and Directors. Bonuses, pay rises and the grant of long term incentives such as share options are linked to the achievement of key funding and project milestones that are set from time to time by the Committee.

The items included in this report are unaudited unless otherwise stated.

The Company maintains contact with its shareholders about remuneration in the same way as other matters and, as required by Section 439 of the Companies Act 2006, this remuneration report will be put to an advisory vote of the Company’s shareholders at the forthcoming Annual General Meeting.

Directors’ emoluments and compensation (audited)

Set out below are the emoluments of the Directors:

Cameron Pearce

Sam Quinn

Alexander Passmore

Total

30 September 2023

Base fee

96,000

24,000

18,000

138,000

Share Based Payments

5,239

5,239

2,619

13,097

Total 30 September 2023

101,239

29,239

20,619

151,097

30 September 2024

Base fee

102,000

30,000

19,500

151,500

Share based payments

Total 30 September 2024

102,000

30,000

19,500

151,500

The percentage of directors’ emoluments of the total administrative costs for the year is 19% (2023: 12%). The directors’ base fees increased by £13,500, reflecting the fee increases applicable from 1 July 2024 (2023: Nil increase) while the base salary costs of the key management employees did not increase (2023: Nil increase).

Statement of Directors’ shareholding and share interest (audited)

The Directors who served during the year ended 30 September 2024, and their interests at that date, are disclosed on page 11.

Issue of options

As at the reporting date, the number of shares options that the Company has issued to the Board and Senior Management are as follow;

Cameron Pearce (Chairman)

5,000,000

Mike Ralston (CEO)

5,500,000

Lionshead Consultants Ltd (Sam Quinn) (Non Exec Director)

3,750,000

Alexander Passmore (Non Exec Director)

1,750,000

Iain Wearing (COO)

5,000,000

For further information, please see note 17.

Other matters

The Company does not currently have any annual or long-term incentive schemes (other than the one stated above) in place for any of the Directors and as such there are no disclosures in this respect.

The Company does not have any pension plans for any of the Directors and does not pay pension amounts in relation to their remuneration.

The Company has not paid out any excess retirement benefits to any Directors or past Directors. The Company has not paid any compensation to past Directors.

 

By Order of the Board

Sam Quinn

Director
30 January 2025

Independent Auditor’s Report to the Members of Blencowe Resources Plc

Opinion

We have audited the financial statements of Blencowe Resources Plc (the “Company”) and its subsidiaries (the ‘Group’) for the year ended 30 September 2024 which comprise the Consolidated statement of comprehensive income, Consolidated statement of financial position, Parent statement of financial position, Consolidated statement of changes in equity, Parent statement of changes in equity, Consolidated statement of cash flows, Parent statement of cash flows and notes to the financial statements, including accounting policies. The financial reporting framework that has been applied in the preparation of the Group and Company financial statements is applicable law and UK-adopted international accounting standards.

In our opinion:

·      the financial statements give a true and fair view of the state of the Group’s and of the Company’s affairs as at 30 September 2024 and of the Group’s loss for the year then ended;

·      the Group and the Company financial statements have been properly prepared in accordance with UK-adopted international accounting standards; and

·      the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the Group and the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Material uncertainty in relation to going concern

We draw attention to note 2.3 to the financial statements, which explains that the Group and Company’s ability to continue as a going concern is dependent on the availability on further fundraising to complete the Definitive Feasibility Study and meet its obligations as they fall due. These conditions indicate the existence of a material uncertainty which may cast significant doubt over the Group’s and Company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.

In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate. We have highlighted going concern as a key audit matter due to the estimates and judgements the Directors are required to make in their going concern assessment, and their effect on our audit strategy. Our audit work in response to this key audit matter included:

·      We obtained the going concern assessment prepared by the directors, and performed a detailed review of the supporting cash flow forecasts.

·      We assessed the systems and controls in place for the preparation of management’s going concern projections.

·      We reviewed the prior year going concern projections against the actual performance in the current financial year, in order to assess management’s ability to forecast accurately.

·      We checked the mathematical accuracy of the projections and agreed the opening cash position to bank statements. We ensured that the period of going concern assessment covered at least twelve months from the date of approval of the financial statements, and enquired regarding any matters shortly after this date that would impact the going concern consideration.

·      We challenged the key assumptions based on expected activity within the going concern period, and comparison to historical actual monthly expenditure.

·      We considered other potential indicators of matters impacting going concern, including title to the Group’s principal mineral license ML1959.

·      We reviewed the requirements of the remaining tranches of the grant awarded by the US Development Funding Council and discussed with the directors how these were factored into budgets and exploration plans during the going concern assessment period.

·      We held discussions with the directors on how they plan to raise the additional funding required by the cash flow forecasts. This was considered against their previous success in fundraising for the project.

·      We reviewed the completeness of disclosures made in the financial statements in relation to going concern, and that these are in line with the going concern assessment provided to us by the directors.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Overview of our audit approach

Materiality

In planning and performing our audit we applied the concept of materiality. An item is considered material if it could reasonably be expected to change the economic decisions of a user of the financial statements. We used the concept of materiality to both focus our testing and to evaluate the impact of misstatements identified.

Based on our professional judgement, we determined overall materiality for the financial statements as a whole to be £150,000 (2023 £155,000), based on approximately 2% of total assets. Materiality for the Company financial statements as a whole was set at £137,000 (2023: £140,000) based on approximately 2% of total assets.

We use a different level of materiality (‘performance materiality’) to determine the extent of our testing for the audit of the financial statements.  Performance materiality is set based on the audit materiality as adjusted for the judgements made as to the entity risk and our evaluation of the specific risk of each audit area having regard to the internal control environment.  Performance materiality was set at 70% of materiality for the financial statements as a whole, which equates to £105,000 (2023: £108,500) for the Group and £95,900 (2023: £98,000) for the Company.

Where considered appropriate performance materiality may be reduced to a lower level, such as, for related party transactions and directors’ remuneration.

We agreed with the Audit Committee to report to it all identified errors in excess of £7,500 (2023: £7,700). Errors below that threshold would also be reported to it if, in our opinion as auditor, disclosure was required on qualitative grounds.

Overview of the scope of our audit

Our Group audit was scoped by obtaining an understanding of the Group and its environment, including the Group’s system of internal control, and assessing the risks of material misstatement in the financial statements. We also addressed the risk of management override of internal controls, including assessing whether there was evidence of bias by the Directors that may have represented a risk of material misstatement.

The Group operates through the Company based in the United Kingdom which performs administrative functions and provides funding to its exploration subsidiary in Uganda Consolidated Africa Resources Ltd- (“CARU”). The Company, and its Ugandan subsidiary CARU, were considered to be significant components.

In establishing our overall approach to the group audit, we determined the type of work that needed to be performed in respect of each component. As significant components, full scope audit were performed for both the Company and CARU. Risk assessment analytical procedures were performed over the results of Blencowe Battery Mines Uganda – SMC Ltd. All audit work was carried out by the group audit team.

Given CARU is in the exploration stage of its work, we did not consider it necessary to visit Uganda. Documentation and explanations from Uganda were obtained by email and through telephone calls.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

We set out below, together with the material uncertainty in relation to going concern above, those matters we considered to be key audit matters.

Key audit matter

How our scope addressed the key audit matter

1. Carrying value of intangible assets – (note 9)

The Group holds intangible assets totalling £7.6m (2023: £7.9m) in relation to the Orom-Cross project in Uganda. These costs are capitalised in accordance with the requirements of IFRS 6.

At each reporting date, the directors are required to assess whether there are any indicators of impairment, that would require an impairment assessment to be carried out. The directors concluded there were no indicators of impairment.

The directors’ consideration of the impairment indicators requires them to make certain judgements, and may include certain estimates. These matters are considered to make this a key audit matter.

We performed the following procedures as part of our audit of management’s assessment of the carrying value of intangible assets:

·      We obtained and reviewed the directors’ assessment of the indicators of impairment, as set out in IFRS 6 “Exploration for and evaluation of mineral resources”.

·      We assessed the design and implementation of controls over the impairment assessment process.

·      We obtained copies of all licenses held by the Group, and performed procedures to confirm the Group’s control of the licenses, that they remain valid.

·      Where the term of certain exploration licenses had expired, we  assessed if these are expected to be renewed in the normal course of business.

·      We made specific enquiries of the directors and key staff involved in the exploration work, and reviewed budgets and forecasts to support the Group continuing with further exploration work in each of its license areas.

·      We considered the results of the bulk sampling works completed during the period, for any matters that may indicate impairment.

·      We considered other matters detailed within IFRS 6 that may give rise to an indication of impairment.

·      We reviewed the adequacy of disclosures in the financial statements in relation to the impairment consideration and the impairment charge recognised.

Based on our work performed, management recorded an impairment charge of £103,279 relating to exploration license EL00104. After recording this impairment charge we consider the directors’ final position on impairment, and the financial statements disclosures to be appropriate.

 

Our audit procedures in relation to these matters were designed in the context of our audit opinion as a whole. They were not designed to enable us to express an opinion on these matters individually and we express no such opinion.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information contained within the annual report.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

 

Opinions on other matters prescribed by the Companies Act 2006

In our opinion the part of the directors’ remuneration report to be audited has been properly prepared in accordance with the Companies Act 2006.

In our opinion based on the work undertaken in the course of our audit:

·      the information given in the strategic report and the directors’ report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

·      the directors’ report and strategic report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the Group and the Company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors’ report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

·      adequate accounting records have not been kept by the Company, or returns adequate for our audit have not been received from branches not visited by us; or

·      the Company financial statements and the part of the directors’ remuneration report to be audited are not in agreement with the accounting records and returns; or

·      certain disclosures of directors’ remuneration specified by law are not made; or

·      we have not received all the information and explanations we require for our audit.

Corporate governance statement

We have reviewed the directors’ statement in relation to going concern, longer-term viability and that part of the Corporate Governance Statement relating to the entity’s voluntary compliance with the provisions of the UK Corporate Governance Statement specified for our review.

Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate Governance Statement is materially consistent with the financial statements and our knowledge obtained during the audit:

·      Directors’ statement with regards the appropriateness of adopting the going concern basis of accounting and any material uncertainties identified set out on page 17;

·      Directors’ explanation as to their assessment of the Group’s prospects, the period this assessment covers and why they period is appropriate set out on page 19.

·      Directors’ statement on whether they have a reasonable expectation that the Group will be able to continue in operation and meets its liabilities set out on page 17;

·      Directors’ statement on fair, balanced and understandable set out on page 13;

·      Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on page 5;

·      Section of the annual report that describes the review of effectiveness of risk management and internal control systems set out on page 17; and

·      Section describing the work of the audit committee set out on page 18.

Responsibilities of the directors for the financial statements

As explained more fully in the directors’ responsibilities statement set out on page 13, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the Group’s and the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or the Company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

·      We obtained an understanding of the legal and regulatory frameworks that are applicable to the Group, and the procedures in place for ensuring compliance. The most significant regulations identified were the Companies Act 2006, listing rules of the London Stock Exchange and the requirements of the Group’s mining and exploration licenses. Our work included direct enquiry of the directors, who oversee all legal proceedings, reviewing Board minutes and inspection of correspondence.

·      We made enquiries of management, the Audit Committee and the Group’s external legal counsel in Uganda about any litigations and claims and compliance with local legislation in Uganda.

·      We reviewed management’s correspondence with the mining authorities in Uganda for any instances of non-compliance with laws and regulations.

·      We reviewed legal expenditure accounts to understand the nature of expenditure incurred, and to consider any undisclosed instances of non-compliance.

·      We reviewed board minutes and RNS announcements for any indication of non-compliance with laws and regulations.

·      We communicated the relevant laws and regulations identified to all members of the engagement team, and remained alert to any indication of non-compliance with laws and regulations, or potential fraud, throughout our audit work.

·      As part of our audit planning process we assessed the different areas of the financial statements, including disclosures, for the risk of material misstatement. This included considering the risk of fraud where direct enquiries were made of management and those charged with governance concerning both whether they had any knowledge of actual or suspected fraud and their assessment of the susceptibility of fraud. We considered the risk was greater in areas that involve significant management estimate or judgement. Based on this assessment we designed audit procedures to focus on the key areas of estimation or judgement, this included risk-based testing of journal transactions using data analytic software, both at the year end and throughout the year.

Owing to the inherent limitations of an audit, there is an unavoidable risk that some material misstatements of the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK). The potential effects of inherent limitations are particularly significant in the case of misstatement resulting from fraud because fraud may involve sophisticated and carefully organised schemes designed to conceal it, including deliberate failure to record transactions, collusion or intentional misrepresentations being made to us.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Other matters which we are required to address

We were appointed by the Board of Directors on 14 December 2018 to audit the financial statements for the period ending 30 September 2018. Our total uninterrupted period of engagement is seven years, covering the periods ending 30 September 2018 to 30 September 2024.

The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the Group or the Company and we remain independent of the Group and the Company in conducting our audit.

Our audit opinion is consistent with the additional report to the audit committee.

Use of our report

This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Nick Jones

Senior Statutory Auditor

For and on behalf of

Crowe U.K. LLP

Statutory Auditor

London, U.K.

Date: 30 January 2025

 

Consolidated Statement of Comprehensive Income
for the year ended 30 September 2024

Notes

30 Sep 2024

30 Sep 2023

GBP

GBP

Exploration costs

(23,668)

(53,347)

Impairment of intangible assets

(103,279)

Administrative fees and other expenses

5

(789,707)

(1,298,872)

Operating loss

(916,654)

(1,352,219)

Finance costs

15

(44,987)

(45,748)

Loss before tax

(961,641)

(1,397,967)

Taxation

8

Loss for the year attributable to owners of the parent

(961,641)

(1,397,967)

Other comprehensive income

Items that may be reclassified to profit or loss:

Exchange differences on translation of foreign operation:

58,840

31,282

Other comprehensive income, net of tax

58,840

31,282

Total comprehensive loss attributable to owners of the parent

(902,801)

(1,366,685)

Basic and diluted loss per share (pence)

10

(0.45)

(0.70)

Consolidated Statement of Financial Position as at 30 September 2024

Notes

30 Sep 2024

Restated        30 Sep 2023

GBP

GBP

Non-current assets

Intangible assets

9

7,603,793

7,863,650

Current assets

Trade and other receivables

13

24,442

31,863

Cash and cash equivalents

114,694

129,853

Total current assets

139,136

161,716

Total assets

7,742,929

8,025,366

Current liabilities

Creditors: Amounts falling due within one year

14

(1,020,375)

(1,335,255)

Surface liabilities

15

(134,953)

Total current liabilities

(1,155,328)

(1,335,255)

Non-current liabilities

Surface liabilities

15

(794,183)

(818,915)

Total liabilities

(1,949,511)

(2,154,170)

Net assets

5,793,418

5,871,196

Equity

Share capital

16

1,423,759

1,338,566

Share premium

16

9,377,229

8,637,399

Share options reserve

428,342

428,342

Translation reserve

2.9ii

89,579

30,739

Accumulated losses

(5,525,491)

(4,563,850)

Total equity

5,793,418

5,871,196

 

These financial statements were approved by the Board of Directors and authorised for issue on 30 January 2025 and signed on its behalf by:

Cameron Pearce                                            Sam Quinn

Director                                                           Director

Parent Statement of Financial Position as at 30 September 2024

 

 

Notes

30 Sep 24

Restated          30 Sep 23

 

GBP

GBP

 

Fixed assets

 

Investment in subsidiaries

11

6,287,027

6,287,027

Other fixed assets

12

676,950

671,905

Total fixed assets

 

6,963,977

6,958,932

 

Current assets

 

Trade and other receivables

13

415,525

342,197

Cash and cash equivalents

114,694

129,853

Total current assets

530,219

472,050

 

Total assets

 

7,494,196

7,430,982

 

Current liabilities

 

Creditors: Amounts falling due within one year

14

(588,873)

(826,954)

Total current liabilities

 

(588,873)

(826,954)

 

 

Net assets

6,905,323

6,604,028

 

Equity

 

Share capital

16

1,423,759

1,338,566

Share premium

16

9,377,229

8,637,399

Share options reserve

428,342

428,342

Accumulated losses   

(4,324,007)

(3,800,279)

Total equity

 

6,905,323

6,604,028

 

The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements. The loss after tax of the parent company for the year was £523,728 (2023: loss of £653,348).

The Financial Statements were approved and authorised for issue by the Board of Directors on 30 January 2025 and were signed on its behalf by:

 

       

                                                                                  

 

Cameron Pearce                                  Sam Quinn

Director                                                           Director

 

Consolidated Statement of Changes in Equity for the year ended 30 September 2024

Share

 capital

Share premium

Share options reserve

Translation reserve

Accumulated losses

Total equity

GBP

GBP

GBP

GBP

GBP

GBP

1,181,316

7,480,829

402,148

(543)

(3,165,883)

5,897,867

(1,397,967)

(1,397,967)

31,282

31,282

Total comprehensive loss

31,282

(1,397,967)

(1,366,685)

157,250

1,227,750

1,385,000

(71,180)

(71,180)

26,194

26,194

Total transactions with owners

157,250

1,156,570

26,194

1,340,014

Balance as at 30 Sep 2023

1,338,566

8,637,399

428,342

30,739

(4,563,850)

5,871,196

(961,641)

(961,641)

Exchange differences on translation of foreign operations

58,840

58,840

Total comprehensive loss

58,840

(961,641)

(902,801)

85,193

766,733

851,926

(26,903)

(26,903)

Total transactions with owners

85,193

739,830

825,023

Balance as at 30 Sep 2024

1,423,759

9,377,229

428,342

89,579

(5,525,491)

5,793,418

Parent Statement of Changes in Equity for the year ended 30 September 2024

Share

 capital

Share premium

Share option reserve

Accumulated losses

Total equity

GBP

GBP

GBP

GBP

GBP

Balance as at 30 Sep 2022

1,181,316

7,480,829

402,148

(3,146,931)

5,917,362

Loss for the year

(653,348)

(653,348)

Total comprehensive loss

(653,348)

(653,348)

Total transactions with owners

New shares issued (note 16)

157,250

1,227,750

1,385,000

Share issue costs (note 16)

(71,180)

(71,180)

Share based payment charge

26,194

26,194

Total transactions with owners

157,250

1,156,570

26,194

1,340,014

Balance as at 30 Sep 2023

1,338,566

8,637,399

428,342

(3,800,279)

6,604,028

Loss for the year

(523,728)

   (523,728)

Total comprehensive loss

(523,728)

   (523,728)

Total transactions with owners

New shares issued (note 16)

85,193

766,733

851,926

Share issues costs (note 16)

(26,903)

(26,903)

Total transactions with owners

85,193

739,830

825,023

Balance as at 30 Sep 2024

1,423,759

9,377,229

428,342

(4,324,007)

6,905,323

Consolidated Statement of Cash Flows for the year ended 30 September 2024

Notes

30 Sep 2024

30 Sep 2023

GBP

GBP

Operating activities

Loss after tax

(961,641)

(1,397,967)

Finance costs

44,987

45,748

Impairment

103,279

Share based payment

17

26,194

Unrealised currency translation

204,739

182,264

Changes in working capital

Decrease in trade and other receivables

7,422

53,984

(Decrease)/increase in trade and other payables

(139,893)

272,664

Net cash flows utilised by operating activities

(741,107)

(817,113)

Cash flows from investing activities

Government grant

9

2,787,090

Investment in exploration assets

9

(2,846,130)

(713,848)

Net cash flows utilised by investing activities

(59,040)

(713,848)

Cash flows from financing activities

Shares issued (net of issue cost)

16

784,988

1,313,820

Net cash flows from financing activities

784,988

1,313,820

Decrease in cash and cash equivalents

(15,159)

(217,141)

Cash and cash equivalents at the beginning of the year

129,853

346,994

Cash and cash equivalents at the end of the year

114,694

129,853

 

Net debt note

Cash at bank

and in hand

Surface

Liability

Total

GBP

GBP

GBP

At 1 October 2022

346,994

(978,255)

(631,261)

Cash flows

(217,141)

(217,141)

Other non-cash changes

159,340

159,340

As 30 September 2023

129,853

(818,915)

(689,062)

As 1 October 2023

129,853

(818,915)

(689,062)

Cash flows

(15,159)

(15,159)

Other non-cash changes

(110,221)

(110,221)

As 30 September 2024

114,694

(929,136)

(814,442)

Parent Statement of Cash Flows for the year ended 30 September 2024

30 Sep 2024

30 Sep 2023

Notes

GBP

GBP

Operating activities

Loss after tax

(523,728)

(653,348)

Less finance income

(79,881)

(55,873)

Increase in bad debt provision

12,13

31,289

11,742

Share based payment

17

26,194

Changes in working capital

Increase in trade and other receivables

(73,328)

(27,167)

Decrease in trade and other payables

(198,046)

(58,641)

Net cash flows from operating activities

(843,694)

(757,093)

Cash flows from investing activities

Loan advanced to subsidiary

(472,553)

(105,828)

Government grant

2,787,090

Investment in subsidiary, relating to exploration costs paid

11

(2,270,990)

(668,040)

Net cash flows used in investing activities

43,547

(773,868)

 

Cash flows from financing activities

Shares issued (net of issue cost)

16

784,988

1,313,820

Net cash flows from financing activities

784,988

1,313,820

Decrease in cash and cash equivalents

(15,159)

(217,141)

Cash and cash equivalents at the beginning of the year

129,853

346,994

Cash and cash equivalents at the end of the year

114,694

129,853

Notes to the Financial Statements for the year ended 30 September 2024

1.   General

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

The Group did not earn any trading income during the year under review but incurred expenditure associated with financing and operation of the Group and developing its principal assets.

2.   Accounting policies

2.1     Basis of preparation

The principal accounting policies applied in the preparation of the Company and Group’s Financial Statements are set out below. These policies have been consistently applied to the periods presented, unless otherwise stated.

The Company and Group’s Financial Statements have been prepared in accordance with UK adopted international accounting standards (“IFRS”).

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

Prior year adjustment

The Consolidated and Parent statements of financial position have been restated to recognise exploration expenditure in relation to a material invoice of £259,086 that was received several months after the prior year end, relating to works done in the year ended 30 September 2023. This resulted in an increase of this amount to intangible assets and trade payables in the Group accounting records, and in the Parent, accounting records an increase to investment in subsidiary and trade payables of this amount (Note 9,11 and 14). There is no impact to the statement of comprehensive income. As the invoice does not affect the opening position at 1 October 2022, a second comparative statement of financial position has not been presented.

2.2     Basis of consolidation

The Consolidated Financial Statements comprise the financial statements of the Company and its subsidiaries Consolidated African Resources Limited (“CARU”) and Blencowe Battery Mines Uganda – SMC Limited.

Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Group obtains control.  Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over an investee, including:

•           the contractual arrangement with the other vote holders of the investee;

•           rights arising from other contractual arrangements; and

•           the Group’s voting rights and potential voting rights

The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the period are included in the Group Financial Statements from the date the Group gains control until the date the Group ceases to control the subsidiary.

All intra-group balances, transactions, income and expenses and profits and losses resulting from intra-group transactions that are recognised, are eliminated in full.

2.3     Going concern

At 30 September 2024, the Group had £7,742,929 of total assets (2023: £8,025,366), of which £114,694 are held as cash and cash equivalents (2023: £129,853).

In making an assessment of going concern for the Group and Company, the Board of Directors have reviewed cash flow forecasts covering a period of 12 months from the date these financial statements were approved, and have concluded that it is appropriate to prepare the financial statements on a going concern basis.

The Company has successfully agreed a US$5 million grant through the US Development Finance Corporation (DFC). This funding is being provided in a number of tranches aligned to completion of works related to the Definitive Feasibility Study, with $3.5m of this funding having been advanced as of 30 September 2024. As the DFC grant does not cover the entirety of the Definitive Feasibility Study costs, further funding in addition to the amounts already raised after the year end will be required during the going concern assessment period. Management will pursue options for this funding including share placements and other potential sources. Details on the funds raised from equity transactions subsequent to the year end are detailed in note 20.

These conditions indicate the existence of a material uncertainty, which may cast doubt over the Group’s and Company’s ability to continue as a going concern. The financial statements do not include adjustments that would arise in the event of the Group and Company not being able to continue as a going concern.

2.4     Changes in material accounting policies

The Group and Company have adopted all new IFRS and amendments to IFRS applicable for this period. There has been no change to the Group’s accounting policies as a result, and no other material impact to the financial statements.

2.5     Standards, amendments and interpretations to published standards not yet effective

The Directors have reviewed the IFRS standards in issue but not in effect as of the period end. In their view, none of these standards would have a material impact on the financial statements of the Group.

2.6     Intangible assets

Exploration and evaluation assets

The Group recognises expenditure as exploration and evaluation assets when it determines that those assets will be successful in finding specific mineral resources. Expenditure included in the initial measurements of exploration and evaluation assets and which are classified as intangible assets relate to the acquisition of rights to explore, exploratory drilling, sampling and activities to evaluate the technical feasibility and commercial viability of extracting a mineral resource. Capitalisation of pre-production expenditure ceases when the mining property is capable of commercial production.

Impairment

Exploration and evaluation assets are not subject to amortisation until production commences but are assessed for impairment when an event or trigger requires an assessment to be carried out. The assessment is carried out by allocating exploration and evaluation assets to cash generating units (“CGU’s”), which are based on specific projects or license areas. Currently there is one minng license relating to the Orom-Cross Project, with a number of nearby exploration licenses. Whenever the exploration for and evaluation of mineral resources in cash generating units does not lead to the discovery of commercially viable quantities of mineral resources and the Group has decided to discontinue such activities of that unit, the associated expenditures are written off to the Statement of Comprehensive Income.

2.7     Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another.

(i)       Financial assets

Financial assets are classified at initial recognition. The classification of financial assets at initial recognition that are debt instruments depends on the financial asset’s contractual cash flow characteristics and the Group’s business model for managing them. The Group initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs.

In order for a financial asset to be classified and measured at amortised cost, it needs to give rise to cash flows that are ‘solely payments of principal and interest (SPPI)’ on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level.

Classification and measurement is based on both whether contractual cash flows are solely payments of principal and interest; and whether the debt instrument is held to collect those cash flows. In the case of the Group, all financial assets meet this criteria and they are held at amortised cost.

Impairment of financial assets

IFRS 9’s impairment requirements use more forward-looking information to recognise expected credit losses – the ECL model.

ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Company expects to receive, discounted at the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.

ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12 months (a ’12-month ECL’). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a ‘lifetime ECL’).

For the Company’s receivables from its subsidiary, management have assessed a 12 month ECL at 5% to be appropriate for the current year.

(ii)      Financial liabilities

Financial liabilities are classified, at initial recognition, as financial liabilities at amortised cost. The Group’s financial liabilities include trade and other payables and surface liabilities.

Subsequent measurements

Surface liabilities and trade and other payables.

After initial recognition, surface liabilities and trade and other payables are subsequently measured at amortised cost using the effective interest rate method. Gains and losses are recognised in the statement of profit or loss when the liabilities are derecognised, as well as through the effective interest rate amortisation process.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the effective interest rate. The effective interest rate amortisation is included as finance costs in the statement of profit or loss.

2.8     Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from proceeds.

Warrants

Warrant options have classified as equity since they meet the definition of IAS 32 as equity..  The fair value of the warrants has been calculated using the Black-Scholes option pricing model.  For more information, please see note 17.

Share options

The Group accounts for the equity-settled share options it has issued in accordance with IFRS 2. The share options are recognised at their fair value at the date of grant. The total share based payment charge expensed is recognised over the vesting period, which is the period over which performance conditions are to be satisfied. The fair value is calculated using the Black-Scholes option pricing model, adjusted for the probability of meeting market based vesting conditions where these are included.  The inputs used in the model are based on management’s best estimate.

No expense is recognised for options that do not ultimately vest, except for awards where vesting is conditional on a market condition or non-vesting condition, which are treated as vesting irrespective of whether or not the market or non-vesting condition is satisfied, provided all other performance or service conditions are satisfied.

2.9     Foreign currency translation

(i)    Functional and presentation currency

Items included in the financial statements of each of the group’s entities are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency’). The consolidated financial statements are presented in Great British Pounds currency (GBP).

(ii)   Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional currency at the exchange rate at that date.  Foreign exchange gains and losses resulting from the settlement of such transactions, and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates, are generally recognised in profit or loss.

Non-monetary items in a foreign currency that are measured in terms of historical cost are translated using the exchange rate at the date of the transaction.   Foreign currency differences arising on the consolidation of the Group’s companies are accumulated in the translation reserve.  The Company’s subsidiaries Consolidated African Resources Limited and Blencowe Battery Mines Uganda SMC Limited, whose functional currency is USD.

2.10   Earnings per share

The Company presents basic and, when appropriate, diluted earnings per share (“EPS”) data for its Ordinary Shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of Ordinary Shares outstanding during the year. Diluted EPS is calculated by adjusting the earnings and number of shares for the effects of dilutive potential Ordinary Shares.

2.11   Income tax

Income tax expense comprises current tax and deferred tax.

Current income tax

A 19% rate of corporate income tax applies to the Company. From 1 April 2023 the main corporation tax increased from 19% to 25%, and a new 19% small profits rate of corporation tax was introduced for companies whose profits do not exceed £50,000.

Deferred income tax

Deferred tax is recognised in profit or loss except to the extent that it relates to a business combination, or items recognised directly in equity or in other comprehensive income. Deferred income tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the Financial Statements. Deferred income tax assets and liabilities are measured on an undiscounted basis at the tax rates that are expected to apply to the period when the related asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the date of the Consolidated Statement of Financial Position.

2.12   Investment in subsidiary

Investments in subsidiary are measured at cost less impairment. The investment in subsidiary balance includes any exploration costs paid on behalf of the subsidiary. The balance also includes the impact of the government grant received from the US Government. Refer to Note 2.14.

2.13   Cash and cash equivalents

Cash and cash equivalents in the Company and Group statements of financial position comprise bank balances only.

2.14   Government grants

Government grants are recognised once the entity has complied with conditions attaching to the government grant and the grant funds have been received. Government grants are accounted for using the capital approach.  Under this approach, the grant funds are recognised outside the statement of comprehensive income. Government grants related to intangible assets, shall be presented in the statement of financial position by deducting the grant funds from the intangible asset in arriving at the carrying amount of the intangible asset. The grant funds are recognised in the statement of comprehensive income over the life of a depreciable asset as a reduced depreciation expense.

3.   Critical accounting estimates and judgements

In preparing the Company and Group Financial Statements, the Directors are required to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Accounting estimates and assumptions are made concerning the future and, by their nature, may not

accurately reflect the related actual outcome. There are no key assumptions and other sources of estimation uncertainty that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

Critical accounting estimates

Interest charge on amounts falling after one year

At year end, the NPV of the liability for surface rights  to the owners of the land was £929,136 (2023: £818,915). Interest is charged on the liabilities at a rate of 5%, if the discount rate used to calculate the present value of the liabilities was to increase by 1%, the carrying value of the surface rights liability would increase by around £36,685 (2023: £34,506). The interest charged during the year was for the surface rights was £61,687 (2023: £45,748), if the rate was increased by 1% then the interest charge would increase by approximately £6,168 (2023: £6,235). For further information on the lease, please see note 15.

Critical accounting judgements

Impairment of intangible assets – exploration and evaluation costs

IFRS 6 requires entities recognising exploration and evaluation assets to perform an impairment test on those assets when specific facts and circumstances indicate an impairment test is required. The assessment involves judgement as to the status of licenses and the likelihood of renewal of exploration licenses which expire in the near future. The directors also make a judgement on the ability to meet license obligations, budgets and plans for future exploration activity, the results of that exploration activity, and to assess the recoverability of the capitalised exploration and evaluation costs on development of the project.

Surface Iiability

Management are required to make judgements on when the terms of certain instalment payments under the surface rights agreement are met. The value of the surface liability is measured at the present value of the estimated payments due to the Landowner’s Association over the lease term. If the payments for which judgement is required were made one year later the difference in the liability to the Landowners would decrease by £3,161.

Going concern

In their assessment of going concern, the Directors have prepared cash flow forecast showing the Groups’ expected future expenditure. The Directors were required to make estimates and judgements over future cash flows and funding. For further information about the Group’s going concern, please see note 2.3.

4.   Operating segment activities

The Group is engaged in the business of mining. At this stage in the Group’s development, the Group is focusing on financing and continued development of the Orom-Cross Graphite Project in Uganda. This is considered to be the only operating segment.

5.   Administrative fees and other expenses

30 Sep 2024

30 Sep 2023

GBP

GBP

Directors’ remuneration (see note 6)

153,556

140,051

Professional fees

129,617

           226,471

Salaries (see note 7)

150,000

150,000

Listing fees

43,238

41,123

Audit fees

42,000

35,000

Share option/warrant cost (see note 17)

26,194

Administration fees

47,000

47,000

Broker fees

33,241

41,000

Travelling expenses

16,395

16,852

Ugandan taxes (note 8)

392,425

Miscellaneous fees

42,884

72,625

Foreign currency loss

131,776

110,131

Total

789,707

1,298,872

Key management remuneration, together with any share-based payments, are disclosed in note 7.

6.   Directors’ remuneration

30 Sep 2024

30 Sep 2023

GBP

GBP

Base fees

151,500

138,000

Employer NI

2,056

2,051

Share based payments

13,097

Total

153,556

153,148

7.   Key management personnel

The number of key management (excluding members the Board) employees throughout the year was as follows;

30 Sep 2024

30 Sep 2023

By the Company

2

2

By the Group

2

2

The key management employees who served during the year, together with details of their interest in the shares of the Company as at the reporting date were:

Number of shares

Value of the shares 30 Sep 2024

Michael Ralston – CEO

3,225,000

£177,375

Iain Wearing – COO

408,333

£22,458

Number of shares

Value of the shares

30 Sep 2023

Michael Ralston – CEO

3,225,000

£188,950

Iain Wearing – COO

408,333

£22,500

The total base salary costs recognised as an expense for the year was £150,000 (2023: £150,000). A further £90,000 (2023: £90,000) was capitalised as they are related to the Orom-Cross Graphite Project. Total share-based payments for the year were nil (2023: £13,097). There was no other component of compensation.

8.   Taxation

Analysis of charge in the year

30 Sep 2024

30 Sep 2023

GBP

GBP

Current tax:

UK Corporation tax on loss for the year

Deferred tax

Tax on loss

30 Sep 2024

30 Sep 2023

GBP

GBP

Loss before tax

(961,641)

(1,397,967)

Tax credit at 19%

(182,711)

(265,614)

Tax effect of expenses not deductible for tax

22,914

24,993

Tax losses for which no deferred tax asset is recognised

159,797

240,621

Taxation charge for the year

The Parent Company has accumulated tax losses arising in the UK of £3,405,762 (2023: £3,002,632) that are available, under current legislation, to be carried forward against future profits.

Following an inspection by the Ugandan tax authorities of the tax affairs of CARU covering the period between January 2014 and December 2022, the Group incurred a capital gains tax charge of £392,425. This related to the acquisition by the Company of  CARU in 2019. The amount was chargeable to the former owners, however this was not settled by them and under Ugandan legislation the liability is reclaimable from the acquirer if it cannot be obtained from the seller. This amount was included within administrative expenses in the financial year 2023, as it does not relate to the profits or gains made by the Group. Please refer to note 5.

9.   Intangible and other assets

For the year ended 30 September 2024 intangible assets represent only capitalised costs associated with the Group’s exploration, evaluation and development of mineral resources.

Group

Exploration assets

Government Grant

Total

GBP

GBP

GBP

Balance at 30 September 2022

6,615,253

6,615,253

Additions – during the year

1,450,063

1,450,063

Exchange differences

(201,666)

(201,666)

Balance at 30 September 2023 (Restated)

7,863,650

7,863,650

Additions – during the year

2,846,130

2,846,130

Impairment

(103,279)

(103,279)

Government grant

(2,787,090)

(2,787,090)

Exchange differences

(215,618)

(215,618)

Balance at 30 September 2024

10,390,883

(2,787,090)

7,603,793

Intangible assets have been restated due to an invoice that was received post year end for £259,086 and this is above the materiality level.

Additions during the year represent exploration costs at Orom-Cross Graphite Project.

Management performed a review for indications of impairment as at 30 September 2024 and concluded impairment was required for exploration license EL00104 which had expired and could not be renewed further. Management have applied for a new exploration license covering a similar area to EL00104 and this is currently being assessed by the licensing authorities.

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 upon 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.

10. Loss per share

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

30 Sep 2024

30 Sep 2023

Earnings

Loss from continuing operations for the year attributable to the equity holders of the Company (£)

(961,641)

(1,397,967)

Number of shares

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

216,036,425

200,041,594

Basic and diluted loss per share (pence)

(0.45)

(0.70)

11. Investment in subsidiaries

Details of the Company’s subsidiary at 30 September 2024 are as follows:

Name of the subsidiary

Place of incorporation

Portion of ordinary shares held

Principal activity

Consolidated African Resources Limited

Uganda

100%

Exploration

Blencowe Battery Mines Uganda – SMC Limited

Uganda

100%

Mining Extraction

30 Sep 2024

GBP

Restated

30 Sep 2023

GBP

Investments in subsidiary

Investments at the beginning of the year as previously stated

6,287,027

4,892,924

Additions during the year

2,270,990

1,394,103

Government grant

(2,270,990)

Total investment in subsidiary

6,287,027

6,287,027

The investment in subsidiary at 30 September 2023 have been restated because of an investment amount of £259,086 paid by the Parent on behalf of the Subsidiary for project costs.

The Group’s new subsidiary Blencowe Battery Mines Uganda – SMC Limited had no significant transactions during the year.

As described in note 9, the Company received amounts totalling £2,787,090 as a grant from the U.S. International Development Finance Corporation (“DFC”) relating to expenditure incurred on the Orom Cross Definitive Feasibility Study programme. Of the total expenditure, £2,279,990 was incurred by the parent company and recognised as an increase in its investment in the subsidiary Consolidated Africa Resources Limited (“CARU”). The remaining amount was incurred by CARU and recognised as an increase to the intercompany loan with the parent company (note 12). The grant receipts have accordingly been recorded in the parent company accounts to offset the relevant Feasibility Study costs included in the investment value and the intercompany loan.

12. Other fixed assets

30 Sep 2024

Restated

30 Sep 2023

Group

Company

Group

Company

GBP

GBP

GBP

GBP

Loan to subsidiaries (see below)

739,352

707,268

Less: ECL provision

(62,402)

(35,363)

Total

676,950

671,905

On 18 December 2020 the Company and its subsidiary entered into a loan agreement. The facility is for an amount up to £5,000,000 and carries a base interest of 5% plus Bank of England interest rate per annum chargeable at year end. The loan is considered to be a long-term asset.

During the year, the Company agreed to cover some expenses for Consolidated African Resources Limited (CARU) for the value of £575,140 (2023: £96,051). The amount borrowed at the year end was £736,760 (2023: £589,062). The total interest charged for the year ended 30 September 2024 is £79,448 (2023: £55,873). The interest payable at the year end was £197,655 (2023: £118,206).

The value of the loan is subject to 12 months ECL of 5%, representing the possible default events over the next 12 months of the financial instrument.  Due to the increase of expenses paid by the Company on behalf of CARU, the loan and its interest has increased, this has led to an increase in the provision during the year.

30 Sep 2024

30 Sep 2023

Group

Company

Group

Company

GBP

GBP

GBP

GBP

Brought forward ECL provision

35,363

27,471

Provision expense

27,039

7,892

Carried forward ECL provision

62,402

35,363

13. Trade and other receivables

30 Sep 2024

30 Sep 2023

Group

Company

Group

Company

GBP

GBP

GBP

GBP

Other receivables

8,948

8,948

9,421

9,421

Amounts due from subsidiary

391,084

310,334

Prepayments

15,494

15,493

22,442

22,442

Total

24,442

415,525

31,863

342,197

Included within other receivables is amounts receivable from CARU.

30 Sep 2024

30 Sep 2023

Group

Company

Group

Company

GBP

GBP

GBP

GBP

Amount receivable from CARU (formerly BRUL)

411,667

326,667

Less: ECL provision

(20,583)

(16,333)

Total

391,084

310,334

In the current year the value of the receivable was subject to 12 months ECL of 5%.  The increase in the provision expense is due to the charge of management fees from the Company to its subsidiary CARU.  As of the year end, the amount that CARU owes the Company on management services was £411,667 (2023: £326,667).

30 Sep 2024

30 Sep 2023

Group

Company

Group

Company

GBP

GBP

GBP

GBP

Brought forward ECL provision

16,333

12,083

Provision expense

4,250

4,250

Carried forward ECL provision

20,583

16,333

14. Creditors: Amounts falling due within one year

30 Sep 2024

30 Sep 2023

Restated

Restated

Group

Company

Group

Company

GBP

GBP

GBP

Trade payables

634,918

512,825

903,671

787,794

Ugandan taxes (note 8)

309,409

392,425

Accruals

76,048

76,048

39,159

39,159

Total

1,020,375

588,873

1,335,255

826,953

Trade payables have been restated in the prior year to recognise a creditor balance relating to exploration expenditure costs for the period of £259,086 (note 2.1).

15. Creditors: Amounts falling after one year

The Ugandan Mining Act 2003 requires an applicant for a mining lease to obtain surface rights from landowners in the mineral area before the respective mining lease can be granted. Accordingly, when the Group acquired its subsidiary, it obtained surface rights by way of 49 years lease over the area. The liability to the landowners is to be paid in 10 instalments on a section basis as the project progresses.  The progress on each section is not limited to any time frames and is at the Group’s discretion.

On 10 September 2022 the surface rights agreement was revised and signed between the Locomo Communal Land Association and Consolidated African Resources Limited, the surface rights remain at 49 years. The liability to the land owners will be paid in 8 instalments at defined dates, which are subject to certain conditions being achieved with the final payment due in 2035.

30 Sep 2024

30 Sep 2023

GBP

              GBP

Balance as at 1 October

818,915

978,255

Change in estimate

148,468

Utilisation

(148,468)

Interest charged during the period

44,987

45,748

Exchange gain

(83,234)

(56,620)

Total payable as at 30 September

929,136

818,915

Analysis between current and non-current liability

Payable within 12 months

134,953

Payable after 12 months

794,183

818,915

929,136

818,915

The value of the liability is measured at the present value of the contractual payments due to the Land Owners’ Association over the lease term, with the discount rate of 5%.

At the statement of financial position date, the Group undiscounted amount payable to the Land Owners is;

2024

2023

GBP

GBP

Payable within 1 years

134,953

Payable within 2-5 years

269,907

290,388

Payable after 5 years

809,720

871,164

1,214,580

1,161,552

 

16. Share capital

Number of shares issued

Nominal value per share

Share capital

Share premium

Total share capital

GBP

GBP

GBP

GBP

At 30 Sep 2022

177,929,950

1,181,316

7,480,829

8,662,145

Issue of Ordinary shares

18,750,000

0.005

93,750

656,250

750,000

Issue of Ordinary shares

12,700,000

0.005

63,500

571,500

635,000

Share issue costs

(71,180)

(71,180)

At 30 Sep 2023

209,379,950

0.005

1,338,566

8,637,399

9,975,965

Issue of Ordinary shares

17,038,520

0.005

85,193

766,733

851,926

Share issue costs

(26,903)

(26,903)

At 30 Sep 2024

226,418,470

0.005

1,423,759

9,377,229

10,800,988

During the year ended 30 September 2024, the Company issued the following shares;

Date

Number of Ordinary shares issued

Nominal share value

Share price

GBP

GBP

06 February 2024

7,847,000

0.005

0.0500

30 July 2024

9,191,520

0.005

0.0500

All of the shares issued are classed as ordinary and have similar rights attached to them. No warrants were issued in the current financial year.

As at 30 September 2024 the number of shares issued and fully paid were 225,158,174 (2023: 209,344,950), 1,260,296 shares are unpaid at 30 September 2024 (2023: unpaid shares 35,000).

17. Share based payments

Warrants

The following warrants were issued in exchange for a good or service:

30 Sep 2024

30 Sep 2023

Warrants

Number warrants

Weighted average exercise price

Number warrants

Weighted average exercise price

Outstanding on 1 Oct

1,250,000

6.00p

Cancelled/ exercised

(1,250,000)

6.00p

Outstanding on 30 Sep

Weighted average remaining contractual Life

0.57 years

The warrants have no vesting period and have been recognised in full upon issue. If the warrants remain unexercised after a period of three years from the date of grant, they will expire. The holder may exercise the subscription right at any time within the subscription period.

The above warrants were valued using the Black Scholes valuation method. The assumptions used are detailed below. The expected future volatility has been determined by reference to the average volatility of similar entities:

Warrants

30 Sep 2022

Weighted Average Share Price

6.00p

Weighted Average Exercise Price

6.00p

Expected Volatility

56%

Expected Life

3 years

Risk-free Rate

0.23%

Expected Dividend

Nil

Weighted Average Fair Value (GBP)

32,603

Options

The following options were issued in exchange for a good or service:

30 Sep 2024

30 Sep 2023

Options

Number of options

Weighted average exercise price

Number Options

Weighted average exercise price

Outstanding on 01 Oct

21,000,000

5.76p

16,000,000

6.00p

Issued during the year

5,000,000

5.00p

Outstanding on 30 Sept

21,000,000

5.76p

21,000,000

5.76p

Weighted average remaining contractual Life

2.17 years

3.23 years

The options issued prior to 1 October 2021 have no vesting periods and have been recognised upon issue. If the options remain unexercised after a period of five years from the date of grant, they will expire. The share options cannot be exercised if the holder has ceased employment.

The options issued in the prior year include a market based vesting condition, the share options would only vest if the share price of the Company trades in excess of 10p per share for 10 consecutive days.

The above options were valued using the Black Scholes valuation method, adjusted for the probability of meeting the market-based vesting condition. The assumptions used for the options granted in the prior period are detailed below. The expected future volatility has been determined by reference to the average volatility of similar entities during the year:

Options

                        30 Sep 2023

Share Price

4.6p

Exercise Price

5.00p

Expected Volatility

67%

Expected Life

5 years

Risk-free Rate

3.47%

Expected Dividend

Nil

Fair Value (GBP)

26,194

Deferred tax

No deferred tax asset has been recognised in respect of share options and warrants due to the uncertainty of the future trading profits.

18. Financial instruments

18.1   Categories of financial instruments

30 Sep 2024

30 Sep 2023

Group

Company

Group

Company

GBP

GBP

GBP

GBP

Financial assets at amortised cost

Trade and other receivables

8,948

400,032

9,421

319,755

Cash and cash equivalents

114,694

114,694

129,853

129,853

Financial liabilities at amortised cost

Trade and other payables

944,327

588,873

1,296,096

787,794

Surface liability

929,136

818,915

18.2   Financial risk management objectives and policies

The Company’s major financial instruments include cash and cash equivalents, trade and other payables and other receivables. The fair value of the Group’s financial instruments are equal to their carrying value. Details of these financial instruments are disclosed in respective notes. The risks associated with these financial instruments, and the policies on how to mitigate these risks are set out below. Management monitors these exposures to ensure appropriate measures are implemented in a timely and effective manner.

Currency risk

The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the United States Dollar (“USD”) Ugandan shilling (“UGX”) and Australian Dollar (“AUD”).  Foreign exchange risk arises from recognised monetary assets and liabilities.  The Group also exposes to currency exposure, BRUL expenses are paid in both USD, UGX and AUD, with the amount payable to the land owners denominated in UGX.

The table below summaries the financial assets and liabilities denominated in foreign currencies.

30 Sep 2024

30 Sep 2023

USD

UGX

AUD

USD

UGX

AUD

Financial assets

133

891

Financial liabilities

46,483

1,238,545

435,741

41,827

818,915

35,001

With all other variables held constant, the effect on profit and loss had the GBP weakened or strengthened against USD/UGX/AUD by 5% at the year end results in a (£17,796) (2023: £27,782) change in value.

Credit risk

Credit risk arises on cash balances. The amount of credit risk is equal to the amounts stated in the statements of financial position for each of the assets (notes 12 & 13).

The Group’s policy to manage this risk is to deal with banks that are regulated entities. The Group’s principal banker, Barclays Bank PLC, is regulated by the United Kingdom Financial Services Authority, and has a credit rating of A2 (2023: A1).

Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit. The Company aims to maintain flexibility in funding.

The maturity of the Company’s financial liabilities at the statement of financial position date, based on the contracted undiscounted payments are disclosed in note 14 and surface liability included in note 15, falls within one year and payable on demand.

Capital risk

The Company defines capital as the total equity of the Company. The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

19. Related party transactions

Details of Directors ‘remuneration are disclosed in note 6.

Sam Quinn is a director and shareholder of the Company and a Director of Lionshead Consultants Limited.  During the year, Lionshead Consultants Limited charged consultancy fees of £42,000 (2023: £36,000).

20. Events after the year end

On 6 November 2024, the Group successfully raised a total of £1,500,000 through the issue of 37,500,000 new ordinary shares at 4 pence per share (“Fundraise”). The Fundraise comprises a £1 million placing of 25,000,000 new ordinary shares (“Firm Placing”) arranged through its broker Tavira Financial (“Tavira”) and a conditional £500,000 subscription for 12,500,000 new ordinary shares from senior management (“Conditional Subscription”). The Conditional Subscription was subject to FCA approval of a Prospectus by the Company. Investors in the Fundraise will be issued 1 warrant per 1 Placing Share (“Investor Warrants”), exercisable at 6p for a 3-year period from Admission. Therefore, the Company will issue an aggregate of 37,500,000 warrants, which if fully exercised, would result in gross proceeds of £2.25 million in additional funding. On 7 November the Board announced that the retail offer for the issue of 2,946,890 new shares had closed and raised £117,876.

On 26 November 2024, the Company published a Prospectus for the issue of 37,711,260 New Ordinary Shares in connection with the July and November Subscription and the issue of Fee Shares to strategic partners of the Definitive Feasibility Study. The Company made an application for the 37,711,260 New Ordinary Shares to be admitted to trading on the Equity Shares on 2 December 2024 resulting in a total share capital and total voting rights of 292,076,620. 10,700,000 new share options were issued to the Directors.

On 9 December 2024, the Directors and Senior Management gave notice that they had exercised 3,150,000 warrants at 4 pence and raised £126,000. The Company made an application for 3,150,000 new ordinary shares resulting in a total issued share capital and total voting rights of 295,226,620.

Sovereign Metals #SVML #SVM – Kasiya – Optimised PFS Results

Sovereign Metals Limited (ASX:SVM; AIM:SVML; OTCQX: SVMLF) (Sovereign or the Company) is
pleased to announce the results of an Optimised Pre-feasibility Study (OPFS) for its Kasiya RutileGraphite Project (Kasiya or the Project) undertaken following a strategic investment by Rio Tinto Mining and Exploration Limited (Rio Tinto) in 2023, which established a joint Technical Committee to advance the development of Kasiya.

Following input from various organisations, including world-class consultancies, the Company’s owner’s team, and subject matter experts from Rio Tinto, the OPFS has reconfirmed Kasiya as a leading global future supplier of strategic critical minerals outside of China.

The OPFS proposes a large-scale, long-life operation to deliver substantial volumes of natural rutile and graphite while generating significant returns.

Table 1 summarises the key findings from the OPFS and includes a comparison to the PreFeasibility Study (PFS) results released 16 months ago, in September 2023. It is important to note that the results for the 2023 PFS in Table 1 have not been updated or adjusted for inflation since their release in September 2023.

SUMMARY OF OPTIMISATIONS

The OPFS optimises seven key areas compared to the 2023 PFS as summarised below.

Mining Method
The PFS proposed a 25-year initial LOM based on a hydraulic mining process where slurry material would be screened and pumped overland to processing plants.

Based on findings from the mining trials undertaken as part of the Pilot Mining and Land Rehabilitation (Pilot Phase), the OPFS proposes a large-scale open-pit dry mining operation using draglines and trucking of material to the processing plants. The change in mining method has not changed the initial mine life of 25 years.

Operating Model

The 2023 PFS envisaged mining would take place on a contractor basis.

During the OPFS, Sovereign undertook a trade-off analysis between the following operating options:
• Fully owner-operated mine with draglines and trucks purchased by the owner
• Owner-operated mine with draglines and trucks leased by the owner
• Mining contractor operation using excavators and trucks

Due to the preference for draglines and maintaining flexibility, an owner-operated mine with leased equipment is selected as the preferred operating model.

Plant Configuration
Dry mining Kasiya means the material received at the plant is not pre-wet and pre scrubbed. Therefore, the OPFS proposes a process plant front end consisting of two scrubbers and two oversize screens per 12Mt plant. No further changes are proposed to the processing plant flowsheet.

Plant Location
Per the 2023 PFS, mining would commence in the southern area of the Kasiya deposit, ramping up to 12Mt per annum and then scaling up to 24Mt per annum in Year 5 by constructing a second plant module in the same area, reaching nameplate capacity by the end of the year.

In Year 10 of production, another new 12Mt per annum plant module would be built and commissioned in the northern area of Kasiya, supported by the relocation to the north of one of the southern plants to maintain a steady state of 24Mt per annum.

However, the OPFS has determined the most efficient plant locations to be an initial 12Mtpa South Kasiya plant followed by the construction of another 12Mtpa North Kasiya plant in year 5 of production, negating any relocation requirements in later years.

The OPFS maintains the ROM schedule with operations commencing with 12Mt per annum of throughput during the first four years of production (Stage 1) and expanding to 24Mt per annum in year 5, with full capacity reached by end of year 5 (Stage 2).

Tailings Management

Per the PFS, a conventional process would be used to produce rutile and graphite concentrate with tailings in separate sand and fines streams being pumped to a conventional TSF. Mined out pit areas would be backfilled as part of a rehabilitation process.

The OPFS proposes maximising backfilling of pits as undertaken during the Pilot Phase and the introduction of mud farming on the TSF to accelerate dewatering. This approach has reduced tailings volumes in the TSF by 44% from 187 Mm³ to 105 Mm³.

Mud farming is a technique used by Rio Tinto at operations such as its 100%-owned Weipa bauxite operations in Queensland, Australia, which has been in production since 1963 and produced 35.1Mt of bauxite in 2023.

Water Management
The PFS proposed that the primary water supply for the Kasiya mining complex would be created by building a dam and collecting run-off water from the greater catchment area. Following the introduction of dry mining and mud farming, the size of the water dam proposed in the PFS has been significantly reduced, with less process water required and more process water recovered.

The OPFS mining trials and material deposition tests indicated a water demand of 10.2 Mm³ per annum, almost a 40% decrease in water requirement from the PFS (16.7 Mm³). The effect on the raw water dam wall could be a reduction in volume from 0.79 Mm³ to 0.57 Mm³ and a reduction in dam wall height from 20 metres to 17 metres.

Power
The 2023 PFS envisaged a hybrid hydro-generated grid power plus solar power system solution.

The Malawi grid reliability has improved since completion of the PFS and is expected to further improve considerably with the commissioning of the country’s first HV transmission interconnector to Mozambique in Q2 2025.

This will provide the Project with sufficient power and therefore the OPFS proposes to connect the Project’s power system to the hydro-sourced grid network only. This mitigates any risks associated with commissioning a new solar power project and reducing the overall power tariff by eliminating the need for an Independent Power Producer as per the 2023 PFS.

OPTIMISATION MAINTAINS KASIYA’S GLOBAL LEADER POTENTIAL

Kasiya, located in central Malawi, is the world’s largest known natural rutile deposit and second largest flake graphite deposit.

Natural Rutile is the purest, highest-grade form of naturally occurring titanium feedstock.

Natural Graphite is required for various technological and industrial applications.

Both titanium and graphite have been designated “Critical Minerals” by the USA and the EU.
In December 2024, NATO designated both titanium and graphite as defence-critical, strategic minerals essential for the Allied defence industry.

Over the 25-year LOM, Kasiya is set to produce an average of 222kt of natural rutile and 233kt of natural flake graphite per annum. At steady state throughput of 24 million tonnes of ore per annum the Project is anticipated to produce approximately 246kt of natural rutile and 265kt of natural graphite per annum, positioning Sovereign as potentially the world’s largest producer of natural rutile and natural flake graphite.

Further, the depletion of rutile reserves at Lenoil Company Limited’s Area 1 Mine1 in the coming 2-3 years and the recent cessation of mining activities at Energy Fuels Inc.’s Kwale Operations2 in Kenya means that Sovereign could potentially become the world’s only primary natural rutile producer of scale (see Appendix 2).

The incremental cost of producing a tonne of graphite from Kasiya under the OPFS is US$241/t3. Based on public disclosures by listed graphite companies that have undertaken project studies up to a pre-feasibility stage or later, an incremental graphite cost of production of US$241/t would make Sovereign the world’s lowest-cost graphite producer outside of China (see Appendix 3).

The rutile-graphite-rich mineralisation will be extracted from surface and trucked to the process plant front end to scrub and screen ROM before it enters a Wet Concentration Plant (WCP) where a low-energy requirement, chemical-free process using gravity spirals produces a Heavy Mineral Concentrate (HMC). The HMC is transferred to the dry Mineral Separation Plant (MSP) where premium quality rutile (+95% TiO2) is produced via electrostatic and magnetic separation.

The high quality Kasiya rutile product will be amenable for use in high-end titanium products including aerospace and defence applications.

Graphite rich concentrate is collected from the gravity spirals and processed in a separate graphite flotation plant, producing a high purity, high crystallinity and high value coarse-flake graphite product.

1 In 2024, the previous owner of the Area 1 Mine, Sierra Rutile Limited, was acquired by Lenoil Company Limited, a private company based in Sierra Leone. 2 In 2024, the previous owner of the Kwale Operations, Base Resources Limited was acquired by Energy Fuels Inc., a US-based uranium and critical minerals company.
3 Incremental cost of graphite production is calculated with the following costs attributed to rutile production: all mining costs, all G&A, all material handling costs except for graphitic fines reclamation and graphite concentrate transport, and approximately half of total processing costs. Incremental cost of graphite production therefore includes only those costs incurred on top of primary rutile production to produce an incremental tonne from the process plant and transport the graphite to market. Unit cost of rutile production under this scenario would be US$628/t (FOB Nacala)).

Kasiya’s graphite has been confirmed to produce outstanding anode materials suitable for battery production as well as demonstrating suitability for traditional industrial uses such as the production of refractory materials.

The Project has excellent surrounding infrastructure including sealed roads, a high quality rail line connecting to the deep-water port of Nacala on the Indian Ocean and hydro-sourced grid power.

For the duration of the operation, Kasiya’s highly sought-after rutile and graphite products will be railed directly from a purpose-built rail dry port at the mine site eastward via the Nacala Logistics Corridor (NLC) to the port of Nacala. The southern port of Beira, connecting Kasiya via the recently refurbished Sena Rail Line, offers a secondary export route.

Enquiries
Frank Eagar, Managing Director & CEO
South Africa / Malawi
+27 21 065 1890

Sapan Ghai, CCO
London
+44 207 478 3900

Link here to view full OPFS and Appendices

#BRES Blencowe Resources PLC – Commencement of Drilling

Blencowe Resources Plc (“Blencowe” or the “Company”), is pleased to announce that drilling has now commenced on the Phase 7 exploration programme at its Orom-Cross graphite project in Uganda. This 6,750 metre campaign will be the final drilling programme for the purposes of completing the DFS and establishing an updated JORC Resource to support the expanded mining operations at Orom-Cross.

Highlights:

·    6,750 metre programme designed to substantially increase both Resources and Reserves for inclusion into Definitive Feasibility Study (“DFS”).

·    Infill drilling on existing deposits to upgrade resource base and classification of all Inferred materials to Indicated and Measured.

·    Drilling of new high grade target deposits to define additional Resources.

·    Geotechnical drilling for confirmation of pit slope parameters for mine planning.

·    Trenching and mapping over licences for future resource targeting

·    Upgrade of access roads for all weather access.

·    Permanent exploration camp to be commissioned.

The Phase 7 programme will involve drilling over the identified Camp Lode and Northern Syncline deposits, where the Company has already established an existing JORC Resource of 24.5Mt @ 6%. The objective of this drilling is primarily to upgrade existing Indicated and Inferred resources to Measured, under the JORC guidelines.

The Company will also target extensions to the Northern Syncline (Western Limb) as well as the exciting new prospective Southern GT-01 target. Whilst the current average grade of 6% at Orom-Cross is already in the top quartile globally of graphite projects, historical work undertaken by the Company has highlighted the potential for even higher grades in these areas.

As a component of the programme several holes will be drilled to provide the necessary geotechnical information for the confirmation of pit design parameters and slope stability parameters for the project. These holes will also double as Resource definition information. The drilling and subsequent assessment will be undertaken by local Ugandan drilling firm ADT Drilling, whilst Minrom Consulting from South Africa will undertake the geological assessment alongside Middindi Consulting. Both ADT and Minrom have been associated with the Orom-Cross project since 2012 and have a solid understanding of the project.

Other works planned as part of this programme include trenching and mapping on additional areas outlined from aeromagnetics, designed to identify further areas for future resource expansion, noting the existing JORC Resource sits on just ~2% (as drilled to date) of the broader Orom-Cross licence.

The Company has also commissioned the establishment of a permanent exploration camp onsite, with portable units for accommodation and messing being erected onsite to support ongoing operations.  These constitute the first fixed facilities on-site, representing a key milestone for Blencowe as it drives Orom-Cross towards first production.

Executive Chairman Cameron Pearce commented:

“We have now started the latest drilling programme at Orom-Cross after considerable preparation work undertaken during December.  This extensive campaign will be one of the last key components to wrapping up the DFS and we aim to deliver considerably larger Resources and Reserves to support the higher production levels expected, as well as a longer life of mine.

“We remain on track to complete the DFS in H1 2025 and we expect to begin reporting drilling results during the current quarter.”

Map 1:  Orom-Cross drill programs, including Phase 7 and the new GT 01a drill target 

A map of a city Description automatically generated with medium confidence

 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 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 within 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.

In 3Q 2024 Blencowe introduced a Joint Venture concept with experienced downstream graphite processing partners to ultimately produce upgraded 99.95% SPG (spheronised, purified graphite) in Uganda.  This strategy has several key advantages including additional returns and substantial cost savings which will assist deliver a world class project once DFS is completed.

Blencowe also announced full Minerals Security Partnership (MSP) accreditation in 2024 which provides additional tier-one credibility plus further support from this highly influential quasi-Government organisation.  Together with the US$5 million grant funds received from the US Government via the Development Finance Corporation, the Company is building unique and solid relationships to assist with funding solutions for Orom-Cross project implementation.

#GRX GreenX Metals Ltd – High Grade Antimony Identified at Eleonore North

 GreenX Metals Limited (GreenX or the Company) is pleased to announce that high grade antimony mineralisation has been identified at the Company’s Eleonore North project (Eleonore North or ELN) in Greenland, based on historical results recently released by the Geological Survey of Denmark and Greenland (GEUS). The historical results indicate the potential for a high-grade antimony-gold mineral system at ELN. Antimony prices have been on a rapid uptrend since China announced antimony export controls from 15 September 2024, with antimony prices in the US having rocketed to US$37,500/t from US$18,300/t1 in the past week.

HIGH GRADE ANTIMONY IDENTIFIED AT ELEONORE NORTH PROJECT

·     

GreenX receives outstanding antimony results at Eleonore North project in Greenland.

·     

Antimony price now US$37,500/t from historical prices of ~US$5,000 to 10,000/t.

·     

Critical mineral crisis escalating – China has now restricted export of critical and strategic antimony, graphite, gallium, germanium, tungsten, titanium and rare earths.

·      Historical results from GEUS 2008 fieldwork at ELN have been made available and include grab samples from outcropping mineralised veins with individual specimens grading up to 23% antimony (Sb), and other samples up to 4g/t gold (Au).

·      Previously reported historical data confirmed the presence of gold and high-grade antimony in outcropping veins at ELN including:

14m long chip sample grading 7.2% Sb and 0.53g/t Au2

40 m chip line with a length weighed average of 0.78g/t Au2

·      Antimony mineralisation has been identified along a ~4km trend in veins and structures, that broadly aligns with previously identified gold veining at surface within a 15km trend. 

Figure 1: Newly released GEUS assay results show evidence for high-grade antimony and gold mineralisation above the interpreted Noa Pluton.

·      Significantly, GEUS geologist’s identified stibnite (Sb2S3) as the antimony mineral. Stibnite is well-understood and the predominant ore mineral for commercial antimony production.

·      Antimony is designated a Critical Raw Material by both the EU and the US, with China being the world’s major antimony ore producer and major exporter of refined antimony oxides and metallic antimony.

·      Global strategic interest in antimony has significantly increased in 2024 due to several factors:

China controls ~50% of global antimony mining, most downstream processing and 32% of global resources according to the Lowy Institute.

China’s recent export ban on antimony, effective from 15 September 2024, has caused market disruption3.

Antimony is a crucial material in the defence supply chain, used in various military applications including ammunition, flame retardants, and smart weaponry.

Antimony is essential in renewable energy technologies including more-energy-efficient solar panel glass and in preventing thermal runaway in batteries.

·      The antimony market is expected to grow by 65% between 2024 and 20324. However, the supply side, declining antimony grades and depleting resources for existing mines are becoming increasingly relevant.

In terms of new deposits, antimony is harder to find than most metals because stibnite has no geophysical electrical or magnetic response

·      To aid the Company’s exploration targeting and fieldwork planning for ELN, GreenX’s technical team intend to locate, analyse, and study further historical samples and data within GEUS’s archives in the coming weeks. 

GreenX Metals’ Chief Executive Officer, Mr Ben Stoikovich, commented: “Antimony is of critical importance in multiple defence applications and for the energy transition. Antimony features on both the EU and US critical raw materials lists due to China’s dominance of global antimony supply. Whilst we had previously focussed on the ELN project primarily for gold mineralisation, the newly published historical results with out-cropping vein samples grading up to 23% antimony, indicate the potential for ELN to host viable antimony mineralisation. We plan to now re-focus our exploration program at ELN on both gold and antimony targets.

The Announcement Contains Inside Information

Figure 2: Noa Pluton prospect area within the Eleonore North Licence.

ANTIMONY RESULTS FROM NEWLY PUBLISHED GEOLOGICAL SURVEY ARCHIVE MATERIAL

GEUS’s archives host an extensive collection of rock samples (with and without assays), maps, as well as government and company reports going back many decades. A sub-set of the archive material is available in digital format. GEUS is continuously digitising and publishing its archive material. The newly released data covers 2008 field work at the Noa Dal valley within the Company’s ELN project. Government geologists collected mineralised samples from outcropping veins and scree near to the interpreted Noa Pluton. Selected highlights are presented in Table 1 below.

Table 1: Selected antimony and gold results from 2008 GEUS fieldwork

Sample #

Sb (%)

Au (g/t)

Field description

469506

23.40

0.00

Quartz vein with stibnite. Sample from boulder or scree

496901

22.20

0.44

Massive stibnite from mineralised zone

496918

15.10

0.54

Quartz vein + galena + chalcopyrite

469504

6.65

0.83

Shale with stibnite

496912

0.10

4.10

Clay alteration: hanging wall

496904

0.11

4.70

Clay alteration: footwall

496910

0.04

2.20

Intense clay alteration

These newly released results conform with previously released historical results from the Noa Dal area (previously reported in ASX announcement dated 10 July 2023).

GEOLOGICAL SIGNIFICANCE OF ANTIMONY

GreenX is targeting Reduced Intrusion-related Gold Systems (RIRGS) at ELN. The hypothesised blind-to-the-surface Noa Pluton forms the basis for the RIRGS exploration model. Antimony-gold veins at surface were considered to be supporting evidence for RIRGS at ELN. With the favourable shift in the antimony market, the outcropping veins have become a potentially viable and attractive target.

The antimony-gold mineralisation at ELN could be analogous to Perpetua Resources’ Stibnite Gold Project in Idaho, USA. There, RIRGS and orogenic gold mineralisation styles overprint each other. Prior to the RIRGS model at ELN, the gold-bearing veins at Noa Dal were thought to be of orogenic origin. It is relatively common in gold deposits which are proximal to intrusions to feature characteristics of RIRGS and orogenic gold mineralisation styles.   

The scale and potential of the antimony-gold veins will be evaluated with a follow-up investigation in the next phase of fieldwork.

GEUS is in the process of releasing results from regional mapping and sampling surveys from field seasons in 2022 and 2023 across East Greenland. GreenX plans to use the soon-to-be-released data as part of ongoing evaluation of the antimony and gold potential at ELN and the region.

Given recent developments in the antimony market, GreenX’s exploration strategy at the ELN project in East Greenland will continue with a renewed focus on the known Sb-Au mineral systems at the Noa pluton.

ENQUIRIES

Ben Stoikovich                         Sapan Ghai

Chief Executive Officer             Business Development

+44 207 478 3900                     +44 207 478 3900

-ENDS- 

COMPETENT PERSONS STATEMENT

Information in this announcement that relates to Exploration Results is based on information compiled by Mr Joel Burkin, a Competent Person who is a member of the Australian Institute of Geoscientists. Mr Burkin is a consultant engaged by GreenX. Mr Burkin has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken, to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Burkin consents to the inclusion in this announcement of the matters based on his information in the form and context in which it appears.

FORWARD LOOKING STATEMENTS

This release may include forward-looking statements, which may be identified by words such as “expects”, “anticipates”, “believes”, “projects”, “plans”, and similar expressions. These forward-looking statements are based on GreenX’s expectations and beliefs concerning future events. Forward looking statements are necessarily subject to risks, uncertainties and other factors, many of which are outside the control of GreenX, which could cause actual results to differ materially from such statements. There can be no assurance that forward-looking statements will prove to be correct. GreenX makes no undertaking to subsequently update or revise the forward-looking statements made in this release, to reflect the circumstances or events after the date of that release.

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 (‘MAR’). Upon the publication of this announcement via Regulatory Information Service (‘RIS’), this inside information is now considered to be in the public domain.

Sources:

1 Source: SP Angel 22/11/24 & Asianmetals.com

2 Previously reported – refer to ASX announcement dated 10 July 2023

3 https://chemical.chemlinked.com/news/chemical-news/china-restricts-export-of-antimony-and-related-products

4 https://www.fortunebusinessinsights.com/antimony-market-104295 

Appendix  1: Exploration results and JORC Tables

Table 1: Historical GEUS rock samples from 2008

Sample ID

Easting

Northing

Sb (ppm)

Au (g/t)

Field Description

469501

-25.0093

73.29184

85,100

0

Silicified quartzite with stibnite

469502

-25.0078

73.29173

39,600

0.55

Silicified quartzite with stibnite

469503

-25.0054

73.29182

96,500

0

Silicified quartzite with stibnite

469504

-24.9471

73.2908

66,500

0.83

Shale with stibnite

469505

-25.0675

73.30148

129,000

0

Quartzite with stibnite

469506

-25.0675

73.30148

234,000

0

Vein quartz with stibnite, Sample from boulder or scree

469507

-25.0669

73.30519

987

Vein quartz with galena and chalcopyrite

469508

-24.925

73.29301

577

Silicified limestone breccia

496901

-25.0063

73.29178

222,000

0.44

Massive stibnite from mineralised zone

496902

-25.0063

73.29178

50,900

0

Quartzite  breccia + stibnite

496903

-25.0015

73.28947

274

Footwall quartzite

496904

-25.0064

73.29182

1,130

4.7

Clay alteration: footwall

496905

-25.0063

73.29178

451

1.1

Clay alteration: footwall

496906

-25.0063

73.29178

184

0.07

Quartzite  breccia

496907

-25.0062

73.29173

62

0

Quartzite breccia + stibnite

496908

-25.0061

73.29168

78

2

Stibnite-rich breccia + heavy alteration

496909

-25.0062

73.29166

143

2.4

Clay alteration: hanging wall

496910

-25.0064

73.29171

383

2.2

Intense clay alteration: hanging wall

496911

-25.0065

73.29166

58

0.18

Quartzite hanging wall

496912

-25.0075

73.29166

1,080

4.1

Clay alteration: hanging wall

496913

-24.9465

73.29073

1,180

4

Quartzite breccia + alteration

496914

-24.9471

73.29088

267

0.28

Quartzite breccia + quartz-veining

496915

-24.947

73.29084

65,100

0.66

Quartzite breccia + stibnite

496916

-24.9474

73.29085

63,700

0.65

Wall rock quartzite

496917

-25.0657

73.30175

10,000

Stibnite-rich breccia in quartzite.

Sample from boulder or scree

496918

-25.0658

73.30178

151,000

0.54

Quartz-vein + galena + chalcopyrite

Note:      Coordinates are in WGS 84 decimal degree format.

10,000ppm = 1%

JORC Code, 2012 Edition – Table 1 Report

Section 1 Sampling Techniques and Data

(Criteria in this section apply to all succeeding sections.)

Criteria

JORC Code explanation

Commentary

Sampling techniques

Nature and quality of sampling (eg cut channels, random chips, or specific specialised industry standard measurement tools appropriate to the minerals under investigation, such as down hole gamma sondes, or handheld XRF instruments, etc). These examples should not be taken as limiting the broad meaning of sampling.

GEUS collected grab samples of in situ and loose rocks.

 

Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used.

No QAQC was reported.

 

Aspects of the determination of mineralisation that are Material to the Public Report. In cases where ‘industry standard’ work has been done this would be relatively simple (eg ‘reverse circulation drilling was used to obtain 1 m samples from which 3 kg was pulverised to produce a 30 g charge for fire assay’). In other cases more explanation may be required, such as where there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (eg submarine nodules) may warrant disclosure of detailed information.

Work was not conducted to modern industry standards.

Drilling techniques

Drill type (eg core, reverse circulation, open-hole hammer, rotary air blast, auger, Bangka, sonic, etc) and details (eg core diameter, triple or standard tube, depth of diamond tails, face-sampling bit or other type, whether core is oriented and if so, by what method, etc).

N/A

Drill sample recovery

Method of recording and assessing core and chip sample recoveries and results assessed.

 

N/A

 

Measures taken to maximise sample recovery and ensure representative nature of the samples.

N/A

 

Whether a relationship exists between sample recovery and grade and whether sample bias may have occurred due to preferential loss/gain of fine/coarse material.

N/A

Logging

Whether core and chip samples have been geologically and geotechnically logged to a level of detail to support appropriate Mineral Resource estimation, mining studies and metallurgical studies.

Rock grab samples were described in the field and are not used in any estimates or studies.

 

Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc) photography.

The logging of rock grab samples was qualitative/descriptive in nature. If photos of the samples exist, they have not been released by GEUS.

 

The total length and percentage of the relevant intersections logged.

N/A

Sub-sampling techniques

and sample preparation

If core, whether cut or sawn and whether quarter, half or all core taken.

N/A

If non-core, whether riffled, tube sampled, rotary split, etc and whether sampled wet or dry.

N/A

For all sample types, the nature, quality and appropriateness of the sample preparation technique.

N/A

 

Quality control procedures adopted for all sub-sampling stages to maximise representivity of samples.

N/A

 

 

Measures taken to ensure that the sampling is representative of the in situ material collected, including for instance results for field duplicate/second-half sampling.

N/A

 

Whether sample sizes are appropriate to the grain size of the material being sampled.

N/A

Quality of assay data and laboratory tests

The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total.

All samples are historical in nature and do not comply with modern QAQC protocols.

 

For geophysical tools, spectrometers, handheld XRF instruments, etc, the parameters used in determining the analysis including instrument make and model, reading times, calibrations factors applied and their derivation, etc.

N/A

 

Nature of quality control procedures adopted (eg standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (ie lack of bias) and precision have been established.

N/A

Verification of sampling and assaying

The verification of significant intersections by either independent or alternative company personnel.

 

No verification carried out.

 

The use of twinned holes.

N/A

 

Documentation of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols.

N/A

 

Discuss any adjustment to assay data.

N/A

Location of data points

Accuracy and quality of surveys used to locate drill holes (collar and down-hole surveys), trenches, mine workings and other locations used in Mineral Resource estimation.

Location of samples was collected with a handheld GPS unit. No Mineral Resource estimate is given.

 

Specification of the grid system used.

Location data is provided in the World Geodetic System 1984 (WGS 84) in decimal degrees.

 

Quality and adequacy of topographic control.

N/A

Data spacing and distribution

Data spacing for reporting of Exploration Results.

The samples GEUS collected in 2008 are select rock grab samples. They did not attempt to collect data at regular spacings.  

 

Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied.

N/A

 

Whether sample compositing has been applied.

N/A

Orientation of data in relation to geological structure

Whether the orientation of sampling achieves unbiased sampling of possible structures and the extent to which this is known, considering the deposit type.

The grab samples are point data and were likely collected biased to visible mineralisation. They were collected within and adjacent to mineralised veins and fault structures.

 

If the relationship between the drilling orientation and the orientation of key mineralised structures is considered to have introduced a sampling bias, this should be assessed and reported if material.

No sampling bias.

Sample security

The measures taken to ensure sample security.

The practices of GEUS in 2008 are unknown to GreenX, but are not considered material for the present potential of Eleonore North.

Audits or reviews

The results of any audits or reviews of sampling techniques and data.

GreenX is unaware if any audits or reviews were performed but has no concerns about their absence.

 

Section 2 Reporting of Exploration Results

(Criteria in the preceding section also apply to this section.)

Criteria

JORC Code explanation

Commentary

Mineral tenement and land tenure status

Type, reference name/number, location and ownership including agreements or material issues with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environmental settings.

 The Eleonore North Project is a result of a scientific and systematic reduction of Greenfield Exploration’s (GEX) ‘Frontier’ Project.  Eleonore North comprises two Exploration Licences (MEL2023-39 and MEL 2018-19).  The combined spatial area of licences is 1,220.81 km2.

The boundaries of Eleonore North Project are defined by the points:

 

MEL2023-39 (two polygons: 1,189.77 km2)

73.98333   °N            25.30000   °W

73.98333   °N            25.13333   °W

73.95000   °N            25.13333   °W

73.95000   °N            25.01667   °W

73.91667   °N            25.01667   °W

73.91667   °N            24.86667   °W

73.88333   °N            24.86667   °W

73.88333   °N            24.51667   °W

73.86667   °N            24.51667   °W

73.86667   °N            24.48333   °W

73.85000   °N            24.48333   °W

73.85000   °N            24.43333   °W

73.70000   °N            24.43333   °W

73.70000   °N            24.48333   °W

73.68333   °N            24.48333   °W

73.68333   °N            25.01667   °W

73.70000   °N            25.01667   °W

73.70000   °N            25.05000   °W

73.71667   °N            25.05000   °W

73.71667   °N            25.08333   °W

73.73333   °N            25.08333   °W

73.73333   °N            25.21667   °W

73.75000   °N            25.21667   °W

73.75000   °N            25.26667   °W

73.76667   °N            25.26667   °W

73.76667   °N            25.33333   °W

73.78333   °N            25.33333   °W

73.78333   °N            25.38333   °W

73.80000   °N            25.38333   °W

73.80000   °N            25.48333   °W

73.91667   °N            25.48333   °W

73.91667   °N            25.25000   °W

73.95000   °N            25.25000   °W

73.95000   °N            25.30000   °W

 

73.41667   °N            25.31667   °W

73.41667   °N            25.03333   °W

73.43333   °N            25.03333   °W

73.43333   °N            24.60000   °W

73.23333   °N            24.60000   °W

73.23333   °N            25.60000   °W

73.26667   °N            25.60000   °W

73.26667   °N            25.53333   °W

73.30000   °N            25.53333   °W

73.30000   °N            25.45000   °W

73.31667   °N            25.45000   °W

73.31667   °N            25.31667   °W

 

MEL 2018-19 (two polygons: 31.04 km2)

73.16667   °N            25.11667   °W

73.16667   °N            25.01667   °W

73.15000   °N            25.01667   °W

73.15000   °N            25.05000   °W

73.13333   °N            25.05000   °W

73.13333   °N            25.15000   °W

73.15000   °N            25.15000   °W

73.15000   °N            25.11667   °W

 

73.23333   °N            25.05000   °W

73.23333   °N            24.76667   °W

73.21667   °N            24.76667   °W

73.21667   °N            25.01667   °W

73.20000   °N            25.01667   °W

73.20000   °N            25.05000   °W

The licences are currently in credit due to previous expenditure. Expenditure above the minimum regulatory requirement is carried forward for a maximum of three years.  Eleonore North is in good standing and GreenX owns 100% of the licences following conclusion of a revised option agreement as announced on 15 July 2024.. 

 

GreenX will issue a 1.5% NSR for Eleonore North.

 

The security of the tenure held at the time of reporting along with any known impediments to obtaining a licence to operate in the area.

The licences are in good standing.

Exploration done by other parties

Acknowledgment and appraisal of exploration by other parties.

1953 – lead, copper and zinc bearing veins were discovered in Noa Valley as part of a regional mapping program by Nordisk Mineselskab A/G (‘Nordisk’).

 

1974 – 1976:  Nordisk mapped the Holmesø copper-antimony prospect in Brogetdal, Strindbergland.  Geophysical surveying was performed.  The outcropping mineralisation was blasted a 100kg bulk sample was retrieved, of which 35kg was sent for analysis.  Finally, an attempt was made to drill the mineralisation, and only the top 1.4m of a targeted 17m mineralised horizon was sampled before the rig broke down.  Nordisk concluded that the Holmesø mineralisation is epigenetic.

 

1981 – 1983:  Nordisk discovered the two small, high-grade tungsten and antimony-tungsten deposits on Ymer Island.  These are respectively known as South Margeries Dal and North Margeries Dal.  These deposits were drilled Historical Estimates were made.  Economic studies were performed but concluded that more mineralised material was needed.  The drilled mineralisation is open at depth and along strike.  The historical work on the tungsten and antimony is not material to the understanding of the project’s gold potential.

 

1984 – 1986:  As part of Nordisk’s search for more tungsten mineralisation, a large gold bearing vein was discovered in the southern cliff face of Noa Valley.  The mineralisation in the scree was sampled.  Geochemical sampling was also performed which identified a 10 to 15 km long multielement anomaly dominated by arsenic and antimony, which have a positive correlation with gold.  Nordisk had a strategic shift towards petroleum exploration after this point in time.

 

1992:  With the demise of Nordisk in 1991, the Greenland state owned enterprise, NunaOil A/S in collaboration with Australia’s Pasminco Ltd did additional sampling of the Noa gold veins.  The program was successful in finding additional veins in the valley floor and extending the known mineralisation.  However, the corporate mandate was for ‘high grade gold’ which it was unsuccessful in locating.   This result is unsurprising given that the veins are above the hornfels and correspondingly yield high-grade antimony and low-gold content.  GEX expects the gold content to increase, and antimony to decrease at depth towards the causative pluton.

 

2008 – 2009: GEUS visited Ymer Island and took various rock grab samples in the Noa Dal area. Assay results from these samples were recently made publicly available on the Greenland Portal.

 

2009: NunaMinerals A/S, a public-private spinout from NunaOil A/S, conducted a heliborne magnetic survey over Margeries Valley and Noa Valley.  The purpose of this survey was to directly detect tungsten, and antimony deposits.  Neither of the known deposits were detectable using this method, however a distinct circular magnetic feature was identified in Noa Valley.   This magnetic feature was interpreted to be a granitic/intermediate intrusion.  During this time, samples from the South Margeries Dal deposit were sent for metallurgical analysis, which determined that the material was potentially suited to direct-shipping-ore, and amendable to basic beneficiation methods.

 

2011: Avannaa Resources Ltd (‘Avannaa’) conducted a basin-wide helicopter supported reconnaissance program.  This included visits to the Holmesø mineralisation.  Avannaa concluded that the Holmesø mineralisation was epigenetic and likely related to the mineralisation observed on Ymer Island.

 

2018-2019: Independence Group Ltd (subsequently rebranded as IGO Ltd (‘IGO’) through a joint-venture agreement with GEX, conducted three field programs that were focussed on the sedimentary-hosted copper deposit model.  During this time, IGO managed all geological aspects of the program while GEX managed the logistics in 2018 and 2019.  IGO visited Noa Valley in 2018 and 2019 but focussed on the north slope away from Noa Pluton, and on areas typified by magnetic highs rather than the lows which define Noa Pluton’s circular magnetic signature.  Despite this, quartzite mineralisation reminiscent of Holmesø was identified but no mineralogy is recorded in the documentation.  While in the field with IGO in 2019, GEX alerted IGO to the presence of antimony and gold in the south side of the valley, but no commensurate sampling was performed.   During the IGO earn-in period, GEX located the historical drillhole collars at North and South Margeries Dal tungsten/antimony deposits.

 

The Holmesø prospect was visited by IGO in 2018, 2019 and 2022.  IGO’s Holmesø sampling did not replicate Nordisk’s high-grade blast/bulk sample, or the drill results.  Regional sampling identified diagenetic copper, as well as remobilised epigentic copper that expresses as course blebs of chalcocite within porous, bed-cutting, vuggy conduits.

 

2022:  IGO conducted a structural and geochemical sampling program in Strindbergland (no activity on Ymer Island).  This program correctly concluded that the ‘sediment-hosted copper deposit model’ is not a suitable analogy.  IGO returned to GEX the licences that were in good standing, with the indebted licences being relinquished by IGO.  The remaining licences became the ‘Eleonore North’ project, which is a subset of the original ‘Frontier’ project area.

 

2023:  In May, GEX installed an array of passive seismic nodes on Ymer Island within the licence area. Passive seismic nodes record ambient noise in the crust and accumulate data over many weeks. In September 2023, GEX collected the nodes from Ymer Island. The nodes were returned to the Institute of Mine Seismology (IMS) for data download and processing. IMS produced a 3D velocity model.  

Geology

Deposit type, geological setting and style of mineralisation.

Eleonore North licences, for the most part, cover Neoproterozoic-aged sediments belonging to the Eleonore Bay Supergroup.   These sediments trend from clastics up to carbonates.  The lithology of the sediments is not a primary consideration in the targeting of reduced intrusion related gold systems.  These sediments are intruded by granites and intermediate intrusives that are somewhat shallowly sourced due the Caledonian Orogenic event.  However, geochronology of the South Margeries Dal tungsten indicates that post-orogenic fluid flow occurred.  Post-orogenic granitic intrusions are consistent with RIRGS mineralisation, as the decompression allows for the fluidisation of gold in the mantle while providing conduits to surface.  Elsewhere, such post-orogenic emplacement is associated with deeply sourced lamprophyres, like those mapped in Noa Valley and Brogetdal. GEX identified for the first time, that ~373 Ma post-orogenic mineralisation event is related to the 385 Ma Kiffaanngissuseq hydrothermal event some 1,000 km to the north.  In the north at Kiffaanngissuseq the post-orogenic event was characterised by an east-west fluid flow.  In the south in the Frontier region that hosts Elenore North, the post orogenic event was dominated by magmatic intrusions and little hydrothermal activity.  Separating the two areas is the poorly understood, high-metamorphic grade Eclogite Province where peak metamorphism is of similar age to the Frontier and Kiffaanngissuseq processes.

Drill hole Information

A summary of all information material to the understanding of the exploration results including a tabulation of the following information for all Material drill holes:

easting and northing of the drill hole collar

elevation or RL (Reduced Level – elevation above sea level in metres) of the drill hole collar

dip and azimuth of the hole

down hole length and interception depth

hole length.

No drilling is reported with these results. 

 

If the exclusion of this information is justified on the basis that the information is not Material and this exclusion does not detract from the understanding of the report, the Competent Person should clearly explain why this is the case.

No information was excluded from the announcement.

Data aggregation methods

In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (eg cutting of high grades) and cut-off grades are usually Material and should be stated.

No data aggregation has been undertaken.

 

Where aggregate intercepts incorporate short lengths of high grade results and longer lengths of low grade results, the procedure used for such aggregation should be stated and some typical examples of such aggregations should be shown in detail.

No data aggregation has been undertaken.

 

The assumptions used for any reporting of metal equivalent values should be clearly stated.

No metal equivalent results have been reported.

Relationship between mineralisation widths and intercept lengths

These relationships are particularly important in the reporting of Exploration Results. If the geometry of the mineralisation with respect to the drill hole angle is known, its nature should be reported.

No drilling is reported with these results.  The reported results are grab samples from within or adjacent to mineralised veins and structures. They do not characterise the geometry of the mineralisation.

 

If it is not known and only the down hole lengths are reported, there should be a clear statement to this effect (eg ‘down hole length, true width not known’).

N/A

Diagrams

Appropriate maps and sections (with scales) and tabulations of intercepts should be included for any significant discovery being reported These should include, but not be limited to a plan view of drill hole collar locations and appropriate sectional views.

Appropriate maps and tables are included in the main body of this announcement.

Balanced reporting

Where comprehensive reporting of all Exploration Results is not practicable, representative reporting of both low and high grades and/or widths should be practiced to avoid misleading reporting of Exploration Results.

All results are reported in Appendix 1: Table 1.

Other substantive exploration data

Other exploration data, if meaningful and material, should be reported including (but not limited to): geological observations; geophysical survey results; geochemical survey results; bulk samples – size and method of treatment; metallurgical test results; bulk density, groundwater, geotechnical and rock characteristics; potential deleterious or contaminating substances.

All substantive data are reported.

Further work

The nature and scale of planned further work (eg tests for lateral extensions or depth extensions or large-scale step-out drilling).

In Noa Valley, the target pluton(s) is constrained by seismic, magnetic and geochemical data.  The depth to the pluton is thought to be around 150m below surface based on the seismic results.  Field confirmation of potential host structures is warranted ahead of a subsequent drilling program. Future fieldwork will be planned and/or undertaken in conjunction with expert consultant(s).

 

At the South and North Margeries Dal prospects, a higher resolution digital terrain model should be obtained prior to generating Exploration Targets based on the historical drilling. 

 

Bulk sampling at the prospects will also be considered.

 

Diagrams clearly highlighting the areas of possible extensions, including the main geological interpretations and future drilling areas, provided this information is not commercially sensitive.

These diagrams are included in the main body of this release.

 

#BRES Blencowe Resources PLC – 6,700m Drilling Programme to Commence

Blencowe Resources Plc (LSE: BRES) is pleased to announce that it has commenced the 6,700 metre resource drilling programme, marking the final major workstream required for the completion of the Definitive Feasibility Study (“DFS”) for the Orom-Cross graphite project in Uganda.

With the funding received from the recent capital raise the Company has now triggered the drilling programme, seeking a significant expansion of the JORC Standard Resource and Reserves for Orom-Cross.  The drill programme will target extensions to the existing Northern Syncline and Camp Lode deposits as well as upgrading the overall Resource classification.  There will also be a step-out campaign to outline additional resources in a nearby target zone which, if successful, will add an exciting new high grade deposit into the Orom-Cross Resource.

The additional Reserves will allow Blencowe to both increase the scale of production tonnage earlier in the mine life and to extend the life of mine, delivering a substantial impact on project economics and the final DFS results.

Highlights:

·    Value Addition: Additional resources will underscore the scale and continuity of the graphite deposit at Orom-Cross, estimated at 2-3 billion tonnes overall.

·    Step-Out: Drilling in new target areas within the tenement aims to increase mineral resource and confirm extensions within this vast graphite deposit.

·    Further Resources and Reserves: Incremental drilling on the existing deposits can significantly increase the JORC Standard Reserve, translating to higher production volumes and an extended life of mine

·    Enhanced DFS Economics: Increased production volumes and longer life of mine would have a materially positive impact on the DFS result.

 

Blencowe has commenced mobilisation and execution for its latest drilling campaign at the Orom-Cross project.  Experienced drilling partner ADT Africa (www.adtafrica.com) will once again undertake this programme, under the guidance of Minrom Consulting (www.minrom.com), Blencowe’s geological and technical partner.

The programme aims to expand both the JORC Standard Resource and Reserves, which currently stand at 24.5Mt at 6.0%TC (total carbon).  Drilling will also support data required for geotechnical design confirmation for pit designs, as well as material strength characteristics for crushing and milling designs within the DFS.

ADT Africa will now mobilise drill rigs and personnel to site shortly and commence drilling thereafter.  The entire programme is scheduled to span approximately 2-3 months, with regular market updates to follow.  A revised JORC Resource is anticipated after drilling and assays are completed.  Additionally, Blencowe will establish the first permanent camp at Orom-Cross, in preparation for the construction phase, targeted for 2H 2025.

 

Cameron Pearce, Executive Chairman, commented;

“We are confident this programme will significantly extend our JORC Resource and Reserve base and we will be working closely with our technical partners to deliver the best results possible in the shortest timeframe, feeding directly into the DFS.  We are especially excited to be drilling a new deposit which may ultimately deliver further higher grade tonnes into our project.  Higher production volumes will make a substantial difference to the NPV within the DFS modelling.” 

 

“As a result of successfully completing bulk sample test work over the past 12 months to become pre-qualified, combined with our evolving downstream SPG strategy that will give Orom-Cross a nearby offtaker for life of mine, we can now expect sell more product than we originally believed was possible within the PFS.  This increase in demand supports our decision to build up Reserves beyond initial PFS expectations, aligning with the significant market need for high-quality graphite.”

 

 

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.

In 3Q 2024 Blencowe introduced a Joint Venture concept with experienced downstream graphite processing partners to ultimately produce upgraded 99.95% SPG in Uganda.  This strategy has several key advantages plus substantial cost savings which will assist deliver a world class project once DFS is completed.

I would like to receive Brand Communications updates and news...
Free Stock Updates & News
I agree to have my personal information transfered to MailChimp ( more information )
Join over 3.000 visitors who are receiving our newsletter and learn how to optimize your blog for search engines, find free traffic, and monetize your website.
We hate spam. Your email address will not be sold or shared with anyone else.