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LONDON (Alliance News) - Resources investor Blencowe Resources PLC has signed heads of terms for the acquisition on a graphite project in northern Uganda, it said Monday.
Shares were suspended from trading in London, as the deal represents a reverse takeover.
Blencowe will be buying Consolidated African Resources Uganda Ltd, a subsidiary of Consolidated Africa Ltd, for GBP2.0 million.
The consideration is entirely in shares, with Blencowe issuing the seller 33.3 million new shares at a price of 6 pence each. The stock was last quoted at 4.50p.
Blencowe said the deal is conditional on it securing funding to further develop the Orom graphite project, with no firm amount yet agreed.
Blencowe Non-Executive Chair Cameron Pearce said: "Blencowe was formed for the purposes of acquiring a natural resources asset and the board is fortunate, having reviewed several projects, to now be in a position to reach an investment decision, subject to due diligence.
"We are pursuing a metal that has a strong future for the next 20 years given graphite is the largest component of the lithium battery. We believe the Orom graphite project can be globally significant due to the high-quality product and scale of the target resource. The graphite is characterised by large and jumbo flake size with both high grade and purity that is in short supply for the battery metals sector."
"Also, we expect the grant of a mining licence imminently by the Ugandan government who are very keen to develop their mining sector. The board of Blencowe looks forward to keeping shareholders informed of further developments in what we believe is a very exciting company making transaction," Pearce concluded.