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Short - yes it talks about alternate materials for batteries. There is always going to be drives to improve batteries and use alternate materials. I am sure when the Tesla Roadster went into mass production in 2008 there was talk that lithium would be superseded by now. And one of the main reasons they are looking at alternatives is because they know there will be a shortage of graphite.

We now see today pretty much all vehicle manufacturers have an electric vehicle offering. Some are just getting to the stage where they are releasing their first e vehicles. Jeep for example. The market is still very much in its infancy. Along the drive to increase electric vehicles different OEMs will be at different stages in the evolution of batteries if and when things move forward. Nobody is currently model a graphite market that matures in the next 10 years. All models expect exponential growth through 2035.

The paper i posted was to highlight the OEMs and how they committed to tie up long term supply of lithium via offtakes, some with upfront payments, equity investments and loan offerings. There was a discussion at the time regarding offtakes and how blencowe may close any funding gaps. BRES are in a strong negotiation position so if there is competition from OEMs BRES can dictate their terms and with the increasing urgency for OEMs to tie up supply, there could be some very attractive deals in the making, Graphite may well follow the Lithium pattern and with around 10 times more graphite in a lithium ion batter, Blencowe will be in position A.

Pre decision to mine.....

but we have US Gov to fund it, highest quality graphite, trade friendly location with local government engaged and on board, low cost low capex mine with a clear strategy on green sustainable mining and one of the largest resource projects around and planning on delivering an upgraded NPV of around $1bn. Add in the expected supply and demand shortfall and barriers to entry for other projects.

It's highly unlikely they will say, nah lets not bother.

Blencowe is unaffected by this.

Uganda is a member of the World Trade Organisation

Graphite is tariff free for members if the WTO.

There are no special sanctions under AGOA and therefore nothing can be taken away.

Check out page 7 on the attached. This is for lithium. Graphite spouted as Lithium 2.0. and around 10 times more graphite required in a Lithium ion battery than lithium. Look at the OEMs involved and the deals and remember Graphite is about to go on the same journey as lithium.

BRES are currently working with OEMs.

These OEMs are big players with big budgets and a big problem on their hands that they need to secure supply chain of graphite. Attached shows different funding models of OEMs securing their supply chain.

BRES have a first class asset producing a first class project and low cost margin with relative low capex requirement, with US Government onboard as a funding partner.

This is being position beautifully and we should not worry about short term or long term funding requirements.

The race is on for OEMs to secure graphite and they will have to pay. Lack of projects and barriers to entry and expected graphite price increase because of it means they need to act now. It is in all stakeholders interest that BRES have the funds required to get this project up and running. By scrapping the pliot plant and testing in China they save millions and equity dilution. By securing DFC partnership they have saved significant dilution. We are looking at a tier one project that we are retaining significant if not 100% ownership of.

https://worldmaterialsforum.com/files/Presentations2023/WMF2023-Opening-Frank-Bekaert-McKinsey.pdf

How about the most recent RNS announcement 10 October that says:

"I would like to emphasise once again that the Grant Agreement with DFC does not require Blencowe to match funds input by them"

"This first US$1 million received is of significance firstly because it is completely undilutive funding for Blencowe and its shareholders"

"We are already well advanced in our achievement of the next milestone which would access and release another US$1 million payment from DFC."

So shortly they would have received $2m of the $5m grant.

If you look at the presentation with the stages of the DFS, the more costly items will be further down the line when it comes to more drilling etc. Stage one is all about pre-qualification, enhancing the project plan to increase project plant size and tonnage. This will lead to offtakes and funding in order to deliver an updated DFS and enhanced NPV. So the $2m should get them far enough down the line to add value before moving forward with the more costly parts of stage 2 and 3 of the new enhanced DFS.

https://blencoweresourcesplc.com/wp-content/uploads/2023/09/Blencowe-Presentation-Sept-2023.pdf

Looking at other companies that have received funding from the DFC, we could see a situation where they make a conditional unbinding loan offer in the near term to complete after closure of the DFS and further DD. Following the same pattern with the Technical Assistant Grant. News on this may be closer than many thing. Particularly as they have been in Washington meeting with the DFC this week.

Slide 7 on their corporate presentation almost suggests it's a done deal, preserving all project equity. Conservative broker target set at 73p for full project ownership, base on the $492 NPV - they are looking to at least double that.

https://blencoweresourcesplc.com/wp-content/uploads/2023/09/Blencowe-Presentation-Sept-2023.pdf

Perfect timing releasing this today when i think someone said Mike travelling to the US to see DFC this week.

Another milestone smashed by Blencowe. Proving a high quality product that will be in high demand.

Seems the delay was well worth it with 2 test programmes on 2 continents with 2 techniques. My guess is they have 2 techniques to choose from to plug into the DFS plan and ultimately the SPG process plant. So looks like Chicago thermal processing is the front runner to take the IP into the in country processing plant. They van now move forward with the plan as well as move forward with OEM testing and offtakes

Regarding some comments on BRES supplying China as well as the US and other markets....

I think the answer here is that the larger the offtake agreements that BRES can secure the larger the project that they can move forward with quicker. It's in the plan in the presentation. The initial plan was 50k tn per annum rising to 100k tns. They are now looking at starting at 100k tns ad rising to 150k tns. In the early stages US demand may not enable this to happen at this scale so quick. With China offtakes it can happen. So it is actually in the interest of the US that BRES get offtakes for the higher amount so that the financials of the project are improved and it derisks the project and cuts production and capital costs. Offtake agreements with upfront payments may fund additional drilling increasing mine life or enabling even greater capacity.

So BRES are in a great position that the year Africa based, with US investment and interest for supply take up, especially once able to supply uncoated SPG direct to market, and also the ability to sell into the mature Chinese market and benefiting from expert partnership/consultancy in that market. You couldn't ask to be positioned better.

"So the DFC, supporting US businesses, is going to sit back and allow BRES to ship graphite product back to China, when US EV manufacturers can't access Chinese graphite exports from December 1st?"

This will be a different beast to TGR in the business plan, the way its funded and the quality of the project and product. US Gov funding and Chinese interest is validation of that.

It doesn't need 12 months for the DFS to complete to add value. It will complete in stages.

The new DFS is 3 stages. Stage one is effectively the old DFS but with the combined stage 1 and 2 production plan doubling production to 100k initially which is well under way and will complete within the next 3-6 months.

Value adding milestones along the way:

99.95% uncoated SPG confirmation

Offtake agreements (This will happen in stage 1 as this is needed to enable project expansion to stage 2)

Funding agreements. (DFC already lined up - Mike mentioned in the latest interview that this is being worked on and news of this may well come sooner than may think)

Move to double NPV with updated commercials

Includes plan to process to SPG on site, therefore significantly increased selling price.

Recovery and grades already improve from latest NPV

Further drilling increasing mine life

Chance to build some momentum now.

SPG results will confirm 99.95% battery grade. Should be due any day. Major value added milestone confirming commercial opportunity,

2nd $1m to follow.

Offtakes and full project funding due. The main value added points.

Larger project plan with NPV >2 times the PFS.

DFS and decision to mine in 2024. Don't get caught out thinking you have a year to get in. As SPG results and OEM testing comes to an end, offtake partners will want to get their business done early. This will drive the enlarged scale of the project which will make it more attractive to funding partners. Funding partner will be secured in order to move forward with the larger plan. Offtake upfront payments or other funding may provide cash for further drilling and improved resource and mine life.

Lot's of milestones already achieved not priced in and lots of milestones to be achieved in the next 12 months. Now is the perfect time to get in, it's much clearer to see the direction now and it has been heavily derisked.

The resolve research coverage is highly conservative.

At 12% it is using the highest derisked discount factor.

After assuming 20% equity dillution there is a further 65% derisking haircut.

So assuming only around 20% valuation of the discounted npv.

The project plan is moving on more ambitiously than the .$482m PEA plan.

Npv will grow because recoveries and grade are improved

There is nothing factored in here for SPG processing, effectively taking their output from a $700 product to a higher margin $2500 product. This will also reduce costs.

Combining stage one and 2 saves on capex and increases early stage revenues. Will improve npv.

Further drilling can increase mine life.

In summary, your getting a good deal at around 5p based on a conservative target that the company will be delivering upgrades to regularly over the coming months.

People are worrying about how they may fund another few million, but that few million will add probably another $500m+ to the npv, so however they fund it, it will be a good deal!

What rest of the cash?

Per proactive interview Mike has confirmed we do not need to match the $5m. The $5m is delivered in $1m tranches based on milestones. 1 delivered. 1 very close.

Off we go.

Target now must be to achieve the 100,000 tonne offtakes between US and china in order to meet the requirement to merge stage 1 and 2.

I think the sticky point is the right of first refusal the DFC would have on project funding. You would expect other clauses also securing product supply. That doesn't fit with the increased comms on China interest. It may not be in BRES best interest to proceed with the DFC and i suspect until all options have been considered, this will be on hold. If BRES pick another route it must be pretty good to turn down the DFC, so this doesn't worry me at all.

Unusually Mike has not done an interview on the back of Bulk sample results which i would expect would be a great opportunity to discuss and talk about china. The lack of an interview suggests to me there is more that he cant say than what he can.

DFS is really about proving up the commercials of the project in order to achieve a positive decision to mine ahead of completing finance.

Bulk sample testing was a key milestone to prove up the product. With this flow sheet and plant optimization work carried out in order to optimize the plant design.

During the process recoveries and grades were improved from the pre feasibility study improving the commercials. So already they have added vale to the $482m NPV in the pre feasibility study.

SPG results are due confirming battery grade. This will further enhance the financials as it confirms the commercialization of the product reducing risk.

OEM testing final validation of testing by end users. We know following the bulk sample there is product being sent to several interested parties.

Signing offtake agreements is part of the DFS. Having proven the quality of the product proving up that you have customers ready and waiting enhances the financials as it reduces the risk. Potential for upfront payments, or even equity partners at this stage can bridge short term financing gaps and ultimately full project finance. With competition for supply, i expect offtake partners will want to secure contracts quickly.

They are looking at processing options in and out of country.

Options to increase the scale of the project having only drilled 1-2%.

They have already done work on sustainability and environmental assessments.

There seems to be a lack of knowledge about what the DFS is and an idea that lack of news on the DFC grant means things are standing still. All this progress the company have been talking about is part of the DFS. There is a lot more to it but much of which is an extension of the work already carried out in the PFS.

Mike Ralston talked about a larger project with DFC involved. Whether they will be or China steps in, they have previously stated that if offtake agreements can be signed for 100ktn per annum rather than the initial 50ktn estimated, they will amalgamate stage 1 and 2 of the project achieving capex savings. With the level of interest this has attracted it's certainly possible that there are grounds to move the project forward more ambitiously than planned.

It might not seem like it but there is a lot going on and a lot of progress made, and we are now at the stage where a couple of more developments will reveal a lot and move this forward quickly. Bres still own 100% of the project and the dilution to get here is very minimal compared to other companies achieving similar success.

Because that's the timetable the company have given - Admittedly they are always behind their timetables. They have already delivered on milestones in the DFS and other key parts are well under way. The urgency to get things moving will shift at some point.

100% - dont forget the plan is to complete DFS by end of this year. Offtakes is a key part of that and will likely provide funding. Decision to go ahead and mine should be early next year with the required project funding.

All the groundwork is done here. Only SPG results confirming battery grade is required.

This is not about proving up the asset any more. They have done that and have generated significant interest in a resource that is at the very start of its growth phase and soon to be under pressure for supply. They somehow failed to build any growth in the valuation of the company in doing so which is an anomaly.

I am sure they could get someone to write them a cheque for Orom cross today for several times the current market cap if they wanted.

BRES have options here. This project and the product is clearly highly sought after. They have now completed all the necessary drilling and bulk samples required. They could have raised more and spent more to prove up more resource but the added dilution at this stage was not good value.

SPG results are overdue confirming battery grade. This is the last piece required to prove up a high quality product.

From there we have the issue of funding, firstly to complete the DFS and then to finance the build and production. Important to understand the DFS has already past some key milestones.

DFC was an unexpected angle. No word on this since the initial RNS. My take on this is there are 3 possible scenarios. All going as announced and delays, something bigger going on with US china link or bres have the potential for a better option with china. If they walk away from the DFC grant, how good must the alternative be?! It may be more favourable to go with an industry expert from china.

The level of interest from other parties is such a luxury for bres. They are not at the mercy of trying to find a deal out of desperation to get this off the ground. They have choice and they are in a strong position to negotiate as the product is in demand and they are putting themselves to the top of the shopping list for potential suppliers.

I suspect that fairly soon they will announce some finance that will take the market by storm. An offtake agreement could well come with a prepayment in excess of the current mcap.

It may be frustrating that we still await clarity on partners and funding, but i believe they are holding on for the best deal giving away as little dilution as possible. They will show their hand soon.