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MoU signed for Graphite Beneficiation in Uganda

5 Sep 2024 07:00

RNS Number : 9396C
Blencowe Resources PLC
05 September 2024
 

Date: 5 Sept 2024

Blencowe Resources Plc

("Blencowe" or the "Company")

 

 MOU Signed to Pioneer Graphite Beneficiation in Uganda

Strategic Initiative to Drive Increased Commercial Returns at Orom-Cross

 

Blencowe Resources (LSE: BRES.L) has signed a Memorandum of Understanding ("MOU") with Singaporean graphite sales and marketing specialist Triessence Limited ("Triessence") and a leading Asian SPG and Anode material producer ("SPG Partner"). This partnership aims to establish Joint Venture (JV) for a graphite beneficiation facility in Uganda producing 99.95% purified graphite for lithium-ion batteries. This venture will set Blencowe apart from competitors focused solely on producing graphite concentrate and provides a life-of-mine offtake partner near the Orom-Cross Project, offering significant additional commercial advantages.

With this JV, Blencowe's has strategically aligned with two highly experienced Asian graphite specialists to ensure successful delivery.

Highlights:

· JV Formation: Blencowe and Triessence will each hold a 50% stake in in the SPG facility, with the SPG Partner providing operational expertise. Blencowe retains 100% ownership of Orom-Cross.

· Value Addition: Upgrading 96% graphite concentrate to high-value battery ready 99.95% uncoated SPG significantly enhances commercial returns compared to selling concentrate.

· Risk Mitigation: Partnering with graphite industry experts mitigates operational risk.

· Capital Investment: Triessence will fund 50% of capital costs for the SPG facility.

· SPG Offtake Secured: Triessence will purchase all end product, ensuring consistent revenue and premium pricing for some of the first 99.95% SPG produced ex-China.

· Non-China Focus: SPG product ultimately to be sold to OEMs outside China via Triessence, providing strong political, commercial and funding advantages.

· Next steps:  Definitive Feasibility Study (DFS) for the SPG facility will be integrated with Orom-Cross DFS for a comprehensive development strategy.

 

Executive Chairman Cameron Pearce commented:

"Blencowe has long recognised the substantial advantages downstream upgrading of graphite in-country can offer and securing experienced partners who have the expertise to help us deliver successful SPG production was essential. I am delighted to say that this MOU is another significant milestone in enhancing both the value and distinctiveness for our Company."

"Our JV team will now focus on the SPG facility feasibility study and integrating it with the Orom-Cross DFS, providing a comprehensive solution that adds considerable value. We anticipate minimal additional costs for this study as we are utilising our partners' existing vast experience for all costings and design work, and no further bulk sample testing or further resource drilling is needed."

 

In-Country SPG Strategy

Selling 99.95% uncoated SPG (spheronised purified graphite) unlocks significantly higher returns than small flake 96% concentrate, leveraging the value from additional processing. Providing high-value SPG products into world markets, and particularly products generated outside of China, addresses a significant market gap, especially if China restricts purified graphite exports.

Blencowe's exclusive sale of Orom-Cross concentrate to the proposed SPG facility ensures a life-of-mine offtake partner, whilst also allowing the Company to benefit by participating in the downstream sale of higher-value 99.95% uncoated SPG products. As one of the only ex-China producers of uncoated SPG this facility will likely command premium prices from OEMs seeking to diversify their SPG supply chains outside of China.

This downstream SPG strategy focuses only on upgrading the lower value small flake concentrate, which is roughly half of Orom-Cross's output, while the more valuable large flake concentrate will continue to be sold into traditional graphite markets as concentrate. Blencowe recently announced its first MOU for sale of 15,000tpa large flake concentrate.

 

SPG Joint Venture

A new Ugandan company will be established for the JV to develop the SPG facility.

A feasibility study for the SPG facility, using Orom-Cross concentrate, will be initiated and will leverage the SPG Partner's experience for costing and design work, with Blencowe handling in-country requirements. With the upgrade of substantial Orom-Cross concentrate to uncoated SPG as part of the 600-tonne bulk sample test process, a key part of the technical DFS has already been completed and paid for. This SPG study will later integrate into the broader Orom-Cross DFS, aligning both projects. Triessence will finance 50% of construction and handle international SPG sales. The SPG Partner, a global leader and one of the largest graphite companies in the world currently producing around 100,000tpa of uncoated SPG, will oversee operations under a management contract.

The SPG facility's proximity to the Orom-Cross mine considerably reduces logistics costs for Blencowe and access to low-cost Ugandan hydropower supports a premium grade green 99.95% SPG product.

 

Commercial Advantages

By channelling Orom-Cross small flake concentrate into the nearby JV SPG facility Blencowe bypasses pricing pressures that other graphite peers will face selling their concentrate into competitive Asian markets. This will secure both sales volumes and favourable market pricing for Orom-Cross.

With a 50% stake in the SPG facility, Blencowe will further benefit from selling uncoated 99.95% SPG at a higher ~US$2,000 per tonne compared to ~US$500 per tonne for 96% concentrate. Proximity to the SPG facility will materially lower Orom-Cross current logistics and operating costs, enhancing overall project economics.

This downstream processing strategy, backed by experienced partners, may attract additional funding options from entities who recognise this long-term value opportunity. The U.S. International Development Finance Corporation (DFC) remains the preferred funding partner for Orom-Cross and supports this strategy, as does the Ugandan Government. Both offer valuable backing.

 

 

For further information please contact:

Blencowe Resources Plc

 Sam Quinn

 

www.blencoweresourcesplc.com

Tel: +44 (0)1624 681 250

info@blencoweresourcesplc.com

Investor Relations

Sasha Sethi

Tel: +44 (0) 7891 677 441

sasha@flowcomms.com

Tavira Financial

Jonathan Evans

Tel: +44 (0)20 3192 1733

jonathan.evans@tavira.group

Twitter https://twitter.com/BlencoweRes

LinkedIn https://www.linkedin.com/company/72382491/admin/

 

Background

Orom-Cross Graphite Project

Orom-Cross is a potential world class graphite project both by size and end-product quality, with a high component of more valuable larger flakes within the deposit.

A 21-year Mining Licence for the project was issued by the Ugandan Government in 2019 following extensive historical work on the deposit and Blencowe is now within the Definitive Feasibility Study phase as it drives towards first production.

Orom-Cross presents as a large, shallow open-pitable deposit, with a maiden JORC Indicated & Inferred Mineral Resource deposit of 24.5Mt @ 6.0% Total Graphite Content. Development of the resource is expected to benefit from a low strip ratio and free dig operations, thereby ensuring lower operating and capital costs.

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AGREZLFBZKLBBBE
Date   Source Headline
8th Oct 20247:00 amRNSGlobal MSP Accreditation
5th Sep 20247:00 amRNSMoU signed for Graphite Beneficiation in Uganda
2nd Sep 20247:00 amRNS600 tonne Processing Graphite to Battery Ready SPG
22nd Jul 20247:00 amRNSIssue of Equity
15th Jul 20247:00 amRNSDFC Grant Fourth Tranche
5th Jul 20247:00 amRNSConversion of 600t bulk sample to concentrate
25th Jun 20247:17 amRNS600t Bulk Sample Nearing Completion
14th Jun 20247:00 amRNSHalf-year Report
10th Jun 20247:00 amRNSFirst offtake for 15,000 tonnes
3rd Jun 20247:00 amRNSCorporate Presentation Updated
28th May 20249:00 amRNSCEO Video Interview
15th Apr 20247:00 amRNSBulk Sample Update
10th Apr 20247:00 amRNSReceipt of Third Tranche from DFC
26th Feb 20248:52 amRNSResult of AGM
9th Feb 20247:00 amRNSSubscription & Conditional Subscription - Replace
6th Feb 20247:00 amRNSSubscription & Conditional Subscription
31st Jan 20247:00 amRNSAnnual Financial Report
29th Jan 20247:00 amRNSDFC LOI Regarding Project Financing
25th Jan 20247:00 amRNSReceipt of further $1m Tranche from the DFC
2nd Jan 20247:00 amRNSProject Update
11th Dec 20237:00 amRNSDFS Update
30th Oct 20237:00 amRNSSPG Test Work Completed
10th Oct 202312:16 pmRNSReceipt of $1m Grant First Tranche from DFC
22nd Sep 20237:05 amRNSCorporate Presentation
22nd Sep 20237:00 amRNSDFC Grant Completed
4th Sep 20237:00 amRNSBulk Sampling Completed
23rd Aug 20237:16 amRNSHolding(s) in Company
14th Aug 20237:57 amRNSBulk Sampling Update & China Visit
18th Jul 20237:00 amRNSWarrants Update
22nd Jun 20231:49 pmRNSCEO Interview
19th Jun 20237:00 amRNSMetallurgical test work results
2nd Jun 20237:00 amRNSHalf-year Report
24th May 20238:59 amRNSHolding(s) in Company
18th May 20237:46 amRNSPlacing to Raise £635,000
9th May 20237:00 amRNSWebinar Today
2nd May 20237:11 amRNSInvestor Webinar & Updated Presentation
27th Apr 20233:22 pmRNSStrategic Funding Partner for Orom-Cross
18th Apr 20237:00 amRNSWarrant Expiry Extension
2nd Mar 20237:49 amRNSResearch Note
27th Feb 20237:00 amRNSBulk Sampling Complete
15th Feb 202310:17 amRNSResult of AGM
23rd Jan 20237:00 amRNSAppointment of Leading Engineering Firm to DFS
16th Jan 20237:00 amRNSFinal Metallurgical Testing Programs
13th Jan 20237:00 amRNSAnnual Results 30 September 2022 & Notice of AGM
11th Jan 20234:40 pmRNSSecond Price Monitoring Extn
11th Jan 20234:35 pmRNSPrice Monitoring Extension
11th Jan 20237:00 amRNSExport Approval for Bulk Samples
6th Dec 20227:00 amRNSMetallurgical Test Work Update
17th Nov 20229:00 amRNSPrice Monitoring Extension
27th Oct 202211:10 amRNSIssue of Options

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