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Strategic Party

3 Oct 2022 07:00

RNS Number : 5047B
Blencowe Resources PLC
03 October 2022
 

Date: 03 October 2022

Blencowe Resources Plc

("Blencowe" or the "Company")

 

Approach from Potential Strategic Party in China

 

Highlights

· Approach received from a strategic party in China with extensive experience in graphite.

· Potential to provide offtake contracts and project funding solution for Orom-Cross.

· Additional bulk samples to be delivered to China for further off-site testing.

· Pilot plant strategy in Uganda suspended, removing material near-term capital requirement.

· End-product samples as 96% LOI concentrate to be shipped to Chinese and European firms for trials to lift to 99.9995% LOI product for batteries.

· Technical Data Sheets sent to prospective end users to confirm interest and support for Orom-Cross concentrates. Feedback, interest and discussions already underway.

 

Blencowe Resources Plc ("Blencowe Resources" or the "Company") (LSE: BRES) is pleased to announce it has received an approach from a group in China that has the potential to ultimately provide an offtake, funding and development scenario for its 100% owned Orom-Cross graphite project in Uganda.

Based on these discussions, the Company has agreed to send a bulk sample of ~100 tonnes from Orom-Cross to China as soon as possible to enable further metallurgical test work to be undertaken by the potential strategic party. This is subject to the Company receiving necessary permits to move this raw material from Uganda, which are being sought immediately.

Blencowe has already been able to share significant data with the potential strategic party having previously completed two stages of bench scale metallurgical testing with SGS in Canada (30kgs) and more recently a further round of testing via a small pilot plant (130kgs) in Perth, Australia. This next-level proposed test in China, using their existing infrastructure and experience, would be done on a considerably larger scale which will give all parties more knowledge of the end product that can be produced in an enlarged scenario from Orom-Cross. It is hoped that this program will initially lead to non-binding MOUs for offtake, and ultimately to binding sale agreements for a substantial portion of the initial 50,000tpa product to be produced from stage one within Orom-Cross. There may also be potential for EPC and funding contracts emanating from this relationship, potentially providing a solution to the CAPEX requirement to production.

Given this interest out of China and the relatively short period to complete this test work over the next 6-9 months the Company has taken the decision to postpone its plans to build an on-site pilot plant facility of 2,000tpa at Orom-Cross. Binding offtake contracts to purchase Orom-Cross graphite would likely remove the need for a pilot plant, as the principal rationale for its implementation was to provide product to would-be offtakers to enable them to assess its viability for their own uses. A direct impact of this decision is that there is no longer a requirement to raise substantial cash (circa US$10M) in the near term via the equity markets to fund the on-site pilot plant.

The Company will continue to keep the market informed of progress on these discussions, as well as further key milestones achieved from the ongoing DFS (please see RNS of 26 September 2022 for further information).

 

Cameron Pearce, Executive Chairman commented;

"China is currently the most mature graphite market worldwide and entering into an offtake relationship there would be very valuable to us given the highly attractive economics at Orom-Cross, which already has an NPV8 of US$482M based on a 14-year mine life from just 2% of our broader graphite resource as currently drilled out.

 

We believe this bulk sample trial will prove highly significant and is potentially a precursor to a full offtake agreement and subsequent project funding, which in turn would enable us to kick start production with a critical mass of product sold to drive profitability and cash flow".

 

The graphite market is evolving very quickly and we will see a lot of change ahead as the world drives towards 100 million expected electric vehicles by 2030. The Chinese market remains the largest by far, and will remain so for some time. Establishing a strong and commercial relationship with Chinese partners is therefore decisive and is a natural progression for the Company. Given this positive development we have elected to postpone any decision on a pilot plant on-site until these trials and discussions have reached a conclusion as it is expected a positive result will remove the need for a pilot plant, with the project instead moving straight into full development. This decision will not only save us considerable cash outlay right now, but potentially expedite the development of Orom-Cross."

 

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 Securities 

Jonathan Evans

Tel: +44 (0)20 3192 1733

jonathan.evans@tavirasecurities.com

 

First Equity Limited

Jason Robertson

Tel: +44(0)20 7330 1833

jasonrobertson@firstequitylimited.com

 

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 coarse 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 moving into 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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END
 
 
MSCFIFIEIELVIIF
Date   Source Headline
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
26th Oct 20227:00 amRNSStrategic Investment
24th Oct 20224:41 pmRNSSecond Price Monitoring Extn
24th Oct 20224:36 pmRNSPrice Monitoring Extension
6th Oct 202212:45 pmRNSWebinar Call
3rd Oct 20229:06 amRNSSecond Price Monitoring Extn
3rd Oct 20229:00 amRNSPrice Monitoring Extension
3rd Oct 20227:00 amRNSStrategic Party

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