Member Info for Pauliewonder

Interesting, and good find. Wonder if we can expect an update of some description prior to the AGM

Yes you are correct, having listened back this morning.

It’s a completely dysfunctional market at the moment and there is going to have to be a change some time soon. BRES could be five times the current share price and still cheap based on potential / what they will deliver when they are actually producing and selling graphite.

As MR said in the interview, BRES should really have a market cap of £50-100m and this won’t just happen at the point they start producing, it will have to change soon.

But this is a problem with other shares too. I hold ALL who recently rejected two bids of 33p when the share price was about 22p. Since then, the share price has dropped to 19p. Mind boggling and I just don’t understand why.

For those that are interested, MR is doing a live interview on Thursday:

https://x.com/themoneysponge/status/1757451451725468111?s=46&t=Wymq-mXXF7iw-0QeZ6wyzA

Is this the link you mean? There is reference to March 2024: https://www.modernghana.com/amp/news/1286298/ratification-of-the-ewoyaa-lithium-deal-by-hon.html.

Good find. MR suggested that the 600 tonne sample coming back would lead to off take agreements. They already have over 100 tonnes of sample so to me it suggests that they are engaging with some tier one companies re: some material off take contracts.

I think MR previously mentioned POSCO (Korea) and that they could take all of BRES supply and still need more. The market never really got excited about that, but talk about game changers. That news would multi bag the share price in a day, because it would likely come with funding or strategic investment attached.

Thanks for the upload. Agree with the video that ALL isn’t fully understood and that the potential here is very good. Double sp from here in the short term should hopefully not be an issue even without the Assore bid.

Below post continued…

The above is either in reference to in country SPG processing or something else. It could be downfield SPG but MR did suggest that they may need to incorporate this into a separate bolt on DFS due to the material impact that this would have on the financials. For reference, he was quoted as saying that graphite margin is circa $700 per tonne for concentrate but on site processing can have significantly higher margins (selling at $2,500 per tonne) https://blencoweresourcesplc.com/wp-content/uploads/2023/09/Blencowe-Presentation-Sept-2023.pdf.

BRES are also very close to becoming a producer versus an explorer. Once we have a decision to mine, we will go into production, probably mid 2025. This will return huge amounts of free cash flow and result in BRES likely starting to pay a healthy dividend.

Regardless, it’s exciting times ahead for BRES and we are in a much better place than what we were two weeks ago.

I take my hat off to MR who has done a great job and delivered what he has said he would for the company. It’s now time to sit back and wait for the SP to catch up to that 23-46p recent broker target price - https://blencoweresourcesplc.com/wp-content/uploads/2023/10/FE-BRES-research-note-TP-23p-to-46p.pdf.

Have a great weekend all.

This last two weeks have been truly transformational for BRES from a risk perspective.

25 January: BRES receive $1m from DFC

29 January: BRES receive LOI from DFC re: project funding

31 January: BRES Annual Report

6 February: Subscription and & conditional subscription

3 of those new articles are hugely positive however, the share price is the same as it was before all of this news (and actually took an initial dip on 31 January due to market not understanding the Annual Report RNS).

Ultimately BRE are doing what they need to do, and what gives me confidence is that the company are clearly looking at the most non-dilutive ways to raise project finance. Yes they placed shares with strategic investors, but this was at a premium (5p) and removed the risk of a hugely discounted and dilutive retail placing. Also, these shares are now in safe hands and won’t be flipped as soon as they increase above 5p for a small profit.

The DFS is now fully funded with the $5m grant from DFC and also the $3.15m strategic investment. This removes funding risk.

Going forward, I would expect that the results of the 600 tonne will be very similar to the previous 100 tonne sample as it is being tested at the same place (Jilin):

https://www.proactiveinvestors.co.uk/companies/news/1037247/blencowe-resources-sends-more-graphite-for-bulk-testing-moving-closer-on-us-grant-funding-1037247.html

I’m not clear exactly why we needed to test another 600 tonne of graphic given that the 100 tonne previous sample was to prove that the quality would remain consistent and could be delivered for greater tonnage of samples. The only two things I can think of as to why they are testing the 600 tonnes would be:

1. they have some huge potential off-take agreements in place and the clients are asking for larger amounts of graphite for testing

2. It’s as part of the DFC tranche funding requirements - don’t think that this is the case but could be wrong

What I am very interested in is the previous references BRES have made to expanding the resource, additional drilling and particularly downstream SPG which is likely to have a material impact on the projects financials (which are very strong to start with and one of the reasons I massively increased my stake in the company). I think BRES are likely to report on this in the near term and this is probably the focus of the current discussions that they are having with the DFC.

Note the following, which was in a recent RNS:

“I believe it is testament of the quality of the Orom-Cross project that we have been able secure funding partners like this at a time when the junior mining sector continues to face significant difficulties with respect to sourcing capital. We are hoping to deliver an NPV in the DFS significantly higher than the post-tax NPV of US$482M achieved in the Pre-Feasibility Study and will keep shareholders updated on our progress.”

The above is either in reference to in country SPG pro

Not sure what you are talking about 2-3 years to production. The intention is production in 2025! Maybe read the corporate presentation as a starter.

Surprising price action today, even for BRES. Really cant understand why we are still at these prices. The news is getting better and better by the month and yet we are still very lowly rated. Im also surprised that MR didnt do any interviews with the media based on today's announcements. He might not have wanted to give any details away about who the strategic investor is, but could have simply sidestepped the question. I wonder if we are expecting more news imminently and thats the reason for no interview?

Really interesting point that one. Whoever this investor is has got circa 20% of the company for 5p per share. Theoretically, if they get to 30% then they need to make a mandatory offer for the full share capital. Interesting take on developments, but resgardless of how you look at this, 5p or under is cheap as chips.

Reat spot. So principle remains the same but line 7 should now read:

7. So by 31 March 2024, BRES are likely to have £5.3m cash on balance and a market cap of £11.89m. That means circa 45% of BRES market cap will be cash.

OK so looking at todays development, and assuming that all goes through as stated. This would mean the following:

1. BRES receives $3.15m (going to assume that this is next month at some point - say 31 March 2024)

2. BRES likely to receive additional $1m grant funding by 31 March 2024 also

3. Company currently has circa $2m in the bank (following recent grant payments)

4. 3.15m + $1m + $2m = $6.15m (or £4.9m) cash

5. Following 7,847,000 and 50,000,000 shares issued (see today's announcement), there will be a total of 267,226,950 shares in issue (not taking into account warrants as the funding of these warrants is also not taken into account)

6 At todays midprice of 4.45p, that gives a market cap of £11,891,599

7. So by 31 March 2024, BRES are likely to have £4.9m cash on balance and a market cap of £11.89m. That means just over 41% of BRES market cap will be cash.

This is incorrectly priced and I would expect that we would at least double from here in the short term.

Agree. The strategic investor will need to be announced shortly, because they will own more than 3% of the company. POSCO possibly? although they would likely invest in $ rather than £. Note that we will also get an update on things before the Prospectus. I think this is going to provide a bit more meat on the bones re: downstream SPG particularly given todays comments re:

"We are hoping to deliver an NPV in the DFS significantly higher than the post-tax NPV of US$482M achieved in the Pre-Feasibility Study and will keep shareholders updated on our progress."

All

23182 cost 8441 = 0.364

18891 cost 3874 = 0.20444

42073 cost 12315 = 0

Agree nc. And clearly funding was a concern for the market. We have a clear path to complete the DFS now without the need to raise more. This gets us to end of 2024 but more importantly allows us to agree project funding once the 600 tonne sample results are back with off takers and strategic investors (in addition to the majority probably coming from the DFC).

Love this bit:

“I believe it is testament of the quality of the Orom-Cross project that we have been able secure funding partners like this at a time when the junior mining sector continues to face significant difficulties with respect to sourcing capital. We are hoping to deliver an NPV in the DFS significantly higher than the post-tax NPV of US$482M achieved in the Pre-Feasibility Study and will keep shareholders updated on our progress.”

Clearly taking about downstream SPG but I Wonder what they know?

Hats off

Wow, what an excellent RNS. This is absolutely huge and de risks the project massively. We should see a massive move up to 5p today and then beyond in the coming days. Companies are struggling to raise money at anything but a large discount at the moment, and then BRES pulls this off. Hard off to MR, this is incredible news.

Agree completely. In BRES case, they need financing. However, they are doing all the right things to get it from a tier one institution. It’s huge, and very few companies have such a great funding partner whom is clearly very supportive.

The fall yesterday was based on people having a lack of understanding about how the company and its accounts works.

It’s simple, the company (in September) had very little cash, at the point accounts were recorded. The company then received x2 $1m payments from the DFC, which means they now have a very healthy balance.

It was then mentioned that for some crazy reason, these $1m payments cannot be used and must solely be used for DFS work. Utter nonsense, as has been clarified.

Talk about every day being a school day, yesterday I felt that I was actually at school with some comments.

Sasha - a he not a she. Confirmed that there are no restrictions on what cash can be spent on. The way I see it, BRES have a decent cash pile and this will increase going forward