Blencowe Resou. Regulatory News (BRES)

28 April 2020

Blencowe Resources Plc

("Blencowe" or the "Company")

Acquisition of the Orom-Cross Graphite Project

Completion of oversubscribed £2m fundraise at 6p per share

Fully-Funded 2020 Work Program to enable maiden JORC Resource

Readmission to the Standard List of the LSE 

Blencowe Resources Plc (LSE: BRES), a special purpose acquisition company formed to undertake one or more acquisitions of a company or business in the natural resources sector, is pleased to announce that it has completed the transaction to acquire the Orom-Cross Graphite Project and in conjunction raise £2m of gross proceeds, thereby enabling its readmission today to the Standard List of the LSE.

A copy of the Prospectus for the transaction can be found on the Company's website, along with a new corporate presentation (https://blencoweresourcesplc.com/).

To view the press release with the illustrative maps and diagrams please use the following link:

https://blencoweresourcesplc.com/project/

Highlights

· The Orom-Cross Graphite Project is a potential world class graphite project both by size and end-product quality, with circa 75% of the resource expected to comprise of the most desirable and high value jumbo, extra-large and large flake product.

· The deposit presents as a large, shallow open-pitable mine, with anticipated low strip ratio and free dig operations, suggesting future OPEX and CAPEX within the lowest quartile when compared to other producers.

· A 21-year Mining Licence was awarded in 2019, significantly derisking any development.

· Situated in Uganda, the Orom-Cross deposit has the added benefit of being in one of the more stable jurisdictions to house significant graphite deposits.

· The Company will undertake a significant and fully funded drilling campaign during 2020 to define a maiden JORC Resource on part of the broader 3.7 billion tonne graphite deposit.

· Blencowe will also complete further metallurgical studies, targeting recoveries of 80% and 96- 97% TGC (Total Graphite Content), thereby confirming a high value product and enabling discussions with potential off takers to commence.

· The Company acquired the Orom-Cross Graphite Project for consideration of £2m through the issue of 33,333,333 shares at 6p. The vendor's shares are locked-in for 12 months and will be retained by Blencowe during this period.

· The Company has raised Gross Proceeds of £2m at 6p per share through a placing of £1.5m via Brandon Hill Capital and subscription by an African based strategic investor for £500,000.

· With an Enterprise Value of less than £4m and approximately 70% of outstanding shares held by either the Board or significant investors, Blencowe is well positioned to add value for shareholders in the event of operational success.

Background on the Orom-Cross Graphite Project

The Project lies within the Orom District, of Northern Uganda, 75km northeast of the regional centre at Kitgum (Figure 1). The Project tenements cover an area of approximately 520,000 Ha and the project's exploration target is centred within a granted Mining Lease (ML1959) and Exploration Licences (Figure 2). Orom-Cross is a potential world class graphite project both by size and end- product quality, with a large component of high value jumbo and large flake product. 

Figure 1: Project Location

Since discovery in 1964 whilst targeting base metals, the following exploration activities have been undertaken:

· Field mapping;

· Geophysical surveys (VTEM and Aeromagnetic);

· Geological logging and geochemical analyses of drill core samples;

· Geological logging and geochemical analyses of trench samples;

· Metallurgical testwork of composites; and

· Determination of Exploration Target ranges. 

Figure 2: Project Target Areas

Orom-Cross Project Highlights

· The deposit presents as a large, shallow open-pitable mine, with anticipated low strip ratio and free dig operations. This presents a huge advantage as it means operating costs will likely be very low for Orom-Cross.

· The deposit contains a large proportion of Jumbo, Extra Large and Large flakes, which typically deliver a significantly higher price in the market as they are in shorter supply.

· The Company's strategy is to combine a low-cost mining operation with a higher weighted average price for its end product, to ultimately deliver a substantial margin per tonne from a pure, high grade concentrate.

· This graphite will be produced from a project that has a very long mine life and is located in a safe, stable country in comparison to where most other graphite is produced. These factors would all provide key points of differentiation from the majority of graphite delivered into world markets.

Fully Funded Work Programme

Blencowe will be targeting drilling in the north-eastern mineralized lode of GT03 (Figure 2), identified in historic works and more recently in initial drilling in the Q1 2020 work programme. The focus of the campaign will be on:

· Defining a maiden JORC (2012) Resource in 2H 2020;

· Completion of metallurgical test work, which began in H2 2019, to confirm composition of the final product (in terms of a graphite concentrate);

· Increasing overall metallurgical recoveries; and

· Commencing feasibility studies to determine the commercial parameters of the project.

The Transaction

The Company's entire issued ordinary share capital of 98,333,326 ordinary shares of 0.5 pence each ("Ordinary Shares") will today be readmitted to the Standard Listing segment of the Official List and to trading on the Main Market for listed securities of the London Stock Exchange (together, the "Readmission"). Dealings will commence at 8.00 a.m. today under the TIDM code "BRES" (ISIN: GB00BFCMVS34).

· This follows the completion of the acquisition of the entire issued share capital of Consolidated African Resources (Uganda) Ltd (the "Acquisition"), a Ugandan registered company, which was the previous owner of the Orom-Cross Graphite Project in northern Uganda. The total aggregate consideration payable by the Company is £2m and has been satisfied in full by the issue of 25,000,000 Ordinary Shares to Consolidate Africa Limited and 8,333,333 Ordinary Shares to New Energy Minerals Africa Pty Ltd at a price of £0.06 per share.

· In conjunction with the Acquisition, the Company has raised £2m before expenses, through the issue of 24,999,994 Ordinary Shares to placees and 8,333,333 Ordinary Shares to subscribers at a price of £0.06 per share

· The issued share capital of Blencowe prior to the Acquisition and Readmission was 31,666,664 shares.

· Blencowe has granted subscribers and placees 16,666,666 warrants to subscribe for shares at 8p per share, valid for 5 years.

Cameron Pearce, Executive Chairman commented:

"We are delighted to have successfully completed the transaction and look forward to rapidly building value by advancing the Orom-Cross Graphite Project in Northern Uganda. The graphite sector places a premium value on the flake sizes that we have at Orom and we believe the mining operation will be well positioned in the lowest quartile on the cost curve.

Also, it is particularly timely that global consumers of graphite are discussing new supply channels. In the near term, we are going to rapidly build the project with our fully funded work programme with the aim of engaging with industrial users towards the end of the year. Moreover, we have been very fortunate to receive the support from a number of sophisticated and strategic long-term investors that will help us build this company. We look forward to updating the market in due course as we unlock value and complete our work programmes."

For further information please contact:

Blencowe Resources Plc

Cameron Pearce / Mike Ralston / Sam Quinn

www.blencoweresourcesplc.com

Tel: +44 (0)1624 681 250

info@blencoweresourcesplc.com

Brandon Hill Capital Limited

Jonathan Evans (Corporate Finance)

Tel: +44 (0)20 3463 5000

jonathan.evans@brandonhillcapital.com