Member Info for Pauliewonder

The DFC money isnt ring fenced for the DFS. There is a total committment of funds for the DFS and this includes the DFC monies. BRES has been running with the DFS for some time now (from memory around Sept 2022) and therefore they have already committed a lot of funds towards the DFS. That said, I expect that BRES will need to raise further funds and also use the DFC money towards the DFS due to the cost that is required (up to $12m all in all), but a large proportion of this has already been paid as I understand it.

There will be dilution and MR nor CP has suggested there wont be. The difference here is that MR has stated he will not go back to the retail market at a low price placing. Instead, he has continually looked for other alternatives, DFC, strategic investors etc.

CP's comments today reinforce this statement and for me are a positive that we will not be flooded with lots of confetti shares at bargain basement prices. Instead, we will be diluted, but by institutional investors who will be long term holders, at a price that is acceptable to both management and shareholders alike.

Remember, in the recent interview MR did about the China / Asia trip, he mentioned that they visited a number Korean banks, who can provide debt funding. So first we get more non-binding offtake agreements, then we get debt funding and more II investment.

All in all, a positive statement in my eyes and not one that is prepping us for a raise.

Seems rude not to. One for the SIPP this time.

Forrest - we wont get a placing, MR has stated this multiple multiple multiple times.

Agree this is very frustrating now and we just shouldnt be down at these levels. For balance, I'll post a fairly recent response re: the situation.

Essentially, the strategic investor is do still want to invest it is just timing on their part, MR is working on this and trying to get it across the line.

The brokers Tavira have advised that after running all the KYC etc, that the fund has opened with them to hold their shares.

The last point is likely to be important because it needs to be set up before the shares can be held. Furthermore, any subsequent share raises can be held here so it wont take as long. I expect that MR is also working on other funding options (regardless of whether this funding goes ahead or not) i.e. was speaking with Korean Banks etc.

Yes it’s interesting to see that they mentioned the name of the SPG processing partner. MR suggested that they were speaking to someone about it but didn’t want to mention names.

I trust that people are concluding the DFS is $12 based on the following comment (taken from half year report):

"This is a US$5 million grant awarded to Blencowe to assist with DFS costs and it is with pleasure I note that Blencowe is the first pre-production graphite company to receive such a grant from the US Government. Aside from the obvious advantages of having approximately 40% of our overall DFS costs being funded for free the credibility of both our Company and our Orom-Cross project are both significantly raised by having a partner of this calibre. Blencowe wishes to state once again our appreciation to DFC for this grant and all efforts will be made to deliver a first class DFS as a result".

Therefore, $12 x 0.4 = $5m

So that leaves $7m remaining, toi fund the whole DFS. What people arent grasping here, is that the DFS started in September 2022:

https://www.mining-journal.com/exploration-development/news/4072045/blencowe-starts-ugandan-orom-cross-graphite-dfs

Since September 2022, BRES has already invested a substantial amount into the DFS, including the 600 tonne shipment to China. We are potentially within 7 months of the DFS completing, and as such, I expect that there is only a reasonably nominal amount of additional capital to find, say $2.5m from BRES side.....queue Strategic Investor.

However, that said, MR has already spoken to a number of Korean banks (note, Korean banks, not Chinese banks), about funding. I think this is important as it will provide debt (not equity funding). I do expect that MR will raise further funds (with IIs) along the way, but dont expect these at lower than 5p and most likely at significantly higher (note warrants are at 8p), which would provide additional funding too. Also, MR got the funding terms at 5p when the SP was at 3.8p, so that reflects the appetite for those want wanting in.

I also think that some dont fully appreciate the nature of the first offtake. This is non-binding, of course it is, it has to be because BRES doesnt yet have a mine. Also, this agreement is likely to come into place in about 18 months time. So those suggesting that an agreed price or proce range should be set, are taking rubbish because BES doesnt have any control whatsoever on the price of graphite 18 months down the line. We have seen the erratic price of Lithium over the past 18 months, so why on earth would BRES comit to something that they have no idea about??

So what is the use of a non-binding offtake agreement and why is it so important?

Ju,p back to the funding question, what is the one thing that banks and financiers are likely to ask for when offering terms for finance? Erm......any orders in the bag? Well yes we already have a non-binding agreement in place with a huge graphite company for 15k tonnes pa. That would provide some comfort to me.

Secondly, it validates the product quality and the network that BRES has. I am a big holder of BRES, and I am very relaxed and looking to ad

#BRES Processing of the 600t commercial scale sample will complete by end of June

Small flake concentrate will then be upgraded to 99.95% by a top Chinese SPG producer & distributed to tier-1 buyers & OEMs

We look forward to updating on our 600t testing & further on offtakes

https://x.com/blencoweres/status/1801502210041299144?s=46&t=EvXh7V_bl0KSecPP7wKHJg

Agree, just cannot understand why someone would sell a large chunk now given today's news. Only thing I can think of is that they have been in since low 4p levels and needed the liquidity. Very odd. Has to turn at some point. Im gobsmacked with today's shocking SP response to excellent news.

Proactive interview: https://youtu.be/1K4WEZVL6FA?si=yTTkMl3IurOle2_Q

Agree non-binding, but they will all be non-binding as the plant is not up and running yet. Until the DFS is completed, we cant get binding agreements as no one is going to commit to something that is still relying on funding. Still hugely positive.

Taken from p7 (https://blencoweresourcesplc.com/wp-content/uploads/2024/05/Blencowe-Presentation-June-2024.pdf), assumes $1,300 per tonne and this is for15,000 per annum. So a basic calculation which show the following:

$1,300 x 15,000 = $19.5m per annum

3 year contract: $58.5m

Looking at margins, the margins are much higher for large flake. Assuming a marning of $700 per tonne. That equates to a pre-tax of the following:

$700 x 15,000 = $10.5 per annum

3 year contract: $31.5m

All the above is subject to confirming pricing, movements in the price and demand of graphite etc. However, super positive.

Huge moment for BRES and great to see the size and scale of the MOU. Very be pleasantly surprised. Is this the start of a love to double digits? Surely we must at least finish on the 6p+ area today.

Hopefully the strategic investor comes through, no reason to think otherwise. However, another point to consider here is that BRES are speaking with a number of Korean banks re: debt funding and hopefully that will be a partial funding solution (in addition to IIs and the DFC).

I’m expecting constant news flow from here on in. Strong buy for me.

What interview? Can you provide a link please

#BRES Video 🎥 CEO Mike Ralston outlines the progress at the Orom-Cross #Graphite project to @MiningOnline, with upcoming milestones to include offtake agreements, feasibility work, funding discussions & strengthening the concept of downstream production

https://t.co/BfSPOARr7G

Reserved,

That’s a very useful comparison, thanks for posting.

What I was struck with on the recent interview with MR was the complete and utter change of direction from being your a graphite concentrate producer to processing downstream SPG. Previously he had suggested that being a producer of concentrate would yield very good returns for the company, and clearly this is reflected by the PFS. However, MR was clearly excited about the prospect of doing something different and addressing an area in which almost no western firms operate. For those that weren’t on the call, he mentioned that producing graphite concentrate isn’t the issue, its downstream SPG processing and refining the concentrate into something that can be used within EV batteries that is causing the west a major head ache. As such, this is an area that BRES need to get involved in.

Clearly, BRES don’t have the knowledge and experience of being able to execute downstream SPG without a joint venture, again, referenced on the call. However, he seemed to think that processing downstream SPG would be a game changer for BRES, which for me is very exciting because the NPV is huge at present (under PFS), so area I am keen to find out more on.

A final point is that the all in cost of producing graphite concentrate is likely to drop from around $500 per tonne to just over $400 per tonne. This again is likely to have a material impact on the already impressive NPV and return profile of the project. So even if BRES start with a 5k tonne per annum plant (lets say for the first year), then this would still yield a huge return (given the current market cap.

Say cost per tonne to BRES: $400

Selling price per tonne: $1,100

Net return per tonne: $700

Net return x5k tonnes: $3.5m

BRES Market Cap: $15m

Return % vs Market Cap: 23.3%

There are a number of short term factors that will cause a re rate:

1. Off take agreements - yes not binding until DFS is completed (as we all knew) but it can hugely de risk the project - and by the way they can potential forward sell to secure finance. To suggest that this will not impact the share price is missing the point in my view. If they were to land say POSCO, then not only does it validate the product, but it secures an indicated route to commercialisation and opens up possible financing. This is as close as two weeks away from the first non binding agreement.

I tell you what legal, at the BRES £1 share price party (which we absolutely should celebrate if it ever gets there), If we get an a non bonding off take agreement with POSCO and we don’t bag that day, I will buy your drinks all night. Vice versa too.

2. SPG - a game changer make no doubt. The PFS showed $492 NPV life of mine. This will be smashed with a downstream SPG facility (and I mean well and truly smashed) - news on this likely in short term.

3. Additional drilling - this is likely to increase life of mine, increase NPV and potentially expose other high quality results (outside Camp Lode). The DFC are encouraging this and will likely provide financing on this. Let’s face it, it they want US to have this resource otherwise they wouldn’t be involved. So it’s logical that they will look to encourage BREs to increase it

4. Graphite shortage - slipping into a supply deficit, will impact graphite prices

5. Funding - if they can outline how they will fund the mine, this will re rate the share price. The market is still worried about dilution. Wrongly so in this case because MR has said he will only raise through small and well timed placing a, not to retail as we are seeing with many AIM and small main listed firms at the moment

6. There are lots of other factors that can cause a re rate including further testing of results, completion of DFS, further financing agreed with the other DFC dept, securing, further strategic investment, updated broker notes, market cottons onto how under rated we are.

And by the way, MR didn’t say it was Q1 2025 for DFS completion for definite. What he said was Q4 2024 but there are some items that are out of his control that “may” slip into Q1 2025.

We have to remember that BRES doesn’t have a £100m market cap. We sit just over £10m, although Mike did say that at the point the DFS is completed (say eight months ish), he expects this to be worth £50-100m. That’s a x4 to x7bagger from here if it goes as MR suggests. So I’m not categorically saying you are wrong Legal, I just have a materially different outlook.

Agree with pwlx. The company I work for does this and we are encouraged by our marketing team and external PR company to do this. I would argue that it’s good marketing content that gives the company ongoing marketing material to encourage ongoing online engagement.

I agree it’s frustrating that we aren’t seeing more from the company in terms of news flow although this can be the hardest time to hold. Clearly there is a lot going on with BRES and we just need to be patient and wait for this to materialise into RNS. The biggest gains are made not through trading, but through holding.

I would expect that these are simply balancing trades and nothing to get excited about. It happens on most stocks at some point.