Blencowe Resou. Regulatory News (BRES)

Date: 11 April 2022

Blencowe Resources Plc

("Blencowe" or the "Company")

Mineral Resource Upgrade at Orom-Cross Graphite Project

Blencowe delivers a 50% increase to JORC Resource tonnes at Orom-Cross Graphite Project, including a significant uplift in Resource Categorisation.

Highlights

· Total Resource increased by 50% (8.1Mt) to 24.5Mt at 6.0% TGC

· 24.5Mt at 6.0% TGC contains sufficient Measured and Indicated Resource for the first 15 years life of mine

· 340% (9.4Mt) increase in Indicated and Measured Resources to 13.2Mt, giving a higher level of accuracy and confidence in the deposits to be mined

· Grade remains consistent over the extended zones drilled at both deposits

· High-grade zones evident within the Northern Syncline, including 3.4Mt @ 8.4% TGC

· The Mineral Resource now circa three times larger than initial 8-10Mt targets for the Northern Syncline deposit.

· Drilling at Camp Lode delivers consistent outstanding high grade graphite results in the oxide zone including:

o OREA-L1302, 11 metres at 9.73%TGC from 3 metres including 6 metres at 10.97% TGC

o OREA-L1401, 5 metres at 10.30% TGC from surface

o OREA-L1501, 14 metres at 11.81% TGC from 4 metres

o OREA-L701, 19 metres at 9.78%TGC from 2 metres

o OREA-L1201, 17 metres at 10.35% TGC from 2 metres including 7m @12.21% TGC

o OREA-L401, 19 metres at 9.49% TGC from surface

· 100% conversion of potential mineralisation from the weathered zones in the Camp Lode into JORC Standard Indicated Resource.

· Global Measured, Indicated and Inferred Resource for higher grade Camp Lode is 2.5Mt @ 7.4% TGC at a 3.5% TGC cut-off.

· Further 4.2Mt potential resource available at Camp Lode with additional drilling.

Blencowe Resources (Blencowe or the Company) is pleased to report that results for its revised JORC Standard Resource estimation for the Orom-Cross Graphite Project located in northern Uganda have substantially exceeded expectations.

A comprehensive infill drilling programme (Phase 6) was completed in 2H 2021 and the results have significantly increased the previously reported Mineral Resource to a position where sufficient ore tonnes required for the first 15 years life of mine are now available within the Indicated and/or Measured category. The modelling has also confirmed the robustness of the two higher grade zones within the main Northern Syncline deposit which surround a zone of medium grade graphite. The Measured, Indicated and Inferred Resources commence from surface outcrop to depth of current drilling at 30m, and the ore body remains open below this which represents considerable future potential tonnes into the future.

These results, which come from the weathered, close-to or at-surface zone of the deposit, highlight the quality of the Project's mineralisation and its ability to be a low-cost producer. The nature of the ore body will enhance the commercial outcome for the early years of operations at Orom-Cross by mining this higher-grade ore.

Blencowe had initially targeted a Mineral Resource of 20Mt from Phase 6, with 10Mt in the Measured and/or Indicated categories, in order to provide the start-up ore for a 25Kt per annum operation with potential for expansion subsequent to commencement of production. The 24.5Mt overall, with 13.2Mt as Measured and/or Indicated Resources has outperformed this expectation. The Company is happy with the initial assessment of Resources located in an area specifically targeted as close to the potential plant site within an extensive mineral field.

Furthermore, Blencowe is also looking at all options to deliver green graphite products via a Project that will utilise renewable energy and other sustainable components. This is seen as a very important objective within the Pre-Feasibility Study ("PFS") and the strategy moving beyond.

All other areas within the PFS are going to plan, with work underway on all key areas including infrastructure, energy, roads, water, tailings, logistics, sales and marketing, plus plant and camp design. Completion is targeted for mid-2022.

Executive Chairman Cameron Pearce commented;

"Our Phase 6 exploration results have added considerable further value to the Orom-Cross Graphite Project as all of the Key Performance Indicators for this latest drilling programme were either met or exceeded. 

We have now included the higher-grade Camp Lode deposit into the overall JORC Resource for the first time; we significantly increased the overall JORC Resource tonnage by 50%; we re-classified a full 13.2Mt into the higher confidence Indicated and Measured categories, and we maintained our in situ grade throughout."

As a result of this programme we now have enough tonnes ready to mine that will cover our first fifteen years life of mine, which is an exceptional position for Orom-Cross as we head towards delivering our Pre-Feasibility Study by mid-year, and thereafter our first sale of graphite concentrates from a pilot plant from 2023 onwards. Full production from the main plant is targeted from 2025."

Mineralisation Zones

The Orom-Cross Graphite Project is located in the Kitgum District in north-eastern Uganda. Previous exploration activity identified and named at least five major graphite mineralised zones within the Project property which are underpinned by 21-year Mining Licence (ML) already awarded, namely:

o Northern Syncline

o Camp-Lode

o Central Anticline

o Synformal Saddle

o Southern Anomaly

The Phase 6 Resource Delineation Programme (2021) targeted:

1. Confirming and upgrading the resources in the Camp Lode to include within the JORC Resource.

2. Upgrading the resource classifications in the Northern Syncline and;

3. Completing the investigation of the near surface, free dig graphite mineralised material within a portion of the overall Northern Syncline Lode and the Camp-Lode mineralised zones.

The Phase 6 drilling was based upon each mineralised zone being divided into four sub-zones based on the subsurface level of oxidation and weathering. Field observations, phase 5 drilling and the phase 6 drilling results confirmed the initial analysis suggesting a mean global weathering depth of ~15m (with a range of ~9m to ~25m in some instances) and a transition zone approximately 6 to 10m in depth. 

The Graphitic Carbon grade population within the investigated mineralised zones indicates that the graphite grade for the deposit ranges from 0.01% to 24.1% GC with a mean grade of 5.6% GC and a mode of 6.0% GC.

The JORC compliant resource estimate for these two graphite mineralised areas has been completed and is based on the drill hole spacing, grade variability and geological confidence. The resultant of the modelling and estimation process is the declaration of Mineral Resources as noted.

Resource Estimates

Blencowe undertook an additional drill program (Phase 6) in August 2021 which consisted of an additional 38 holes into the Northern Syncline for 1,140 metres and 36 additional holes into the Camp Lode for 1,080 metres. Geostatistical analysis of the data allowed for both the Camp Lode and Northern Syncline to be estimated and reported according to the JORC code. 

A Resource block model was constructed for both which was dependant on the data spacing and a final block size of 10m x 20m x 3m was selected with a rotated grid to match the orientation of the graphite mineralisation zones. An Ordinary Kriged estimation was performed and resulted in the reporting of Inferred, Indicated and Measured Resources for the Camp Lode and Northern Syncline. The Resources for the Northern Syncline have been tabulated at various cut-off grades starting at 3% GC through to 10% GC.

The previous drilling at the Camp Lode was focussed on delineation of the lode and to check the presence, depth and general shape of the deposit. The majority of the Phase 5 drilling was in the central areas of the Camp Lode in a line which passed through a good patch of mineralisation but since it was the only information available at that stage it introduced a high bias on the mean grades in the reporting of the mineralisation.

With the infill drilling Blencowe defined the high-grade zone and surrounds and in so doing applied better definition on both tonnes and grade and removed the high-grade zone basis.

Table 1: Phase 6 - Revised (2022) JORC Standard Mineral Resources, Orom-Cross Project

· GC - Graphitic carbon, TC - Total carbon.

· No geological loses applied.

· A conservative cut-off grade of 3.5% GC has been applied based on metallurgical testing & preliminary mining parameters.

· Mineralised tonnes have been rounded off and contained graphite metal tonnages have been rounded off to the nearest 1000 (Kt).

· Contained graphite has been reported without the application of cut-off grades, loss factors, or beneficiation yields.

Potential (Additional) Mineralisation

The Phase 6 drill program was focused on a clearer delineation of the resources and an upgrade of resource classification. To this end the program was successful in being able to fully upgrade the previously reported Northern Syncline potential mineralisation of 6,995,000t, in the weathered zone into JORC 2012 reportable Resources.

The program was also successful in upgrading the full weathered potential mineralisation in the Camp Lode into reportable Resources. As the focus in the Camp Lode area was at understanding the geological complexity of the deposit and defining the graphitic carbon units this meant that the majority of drilling was in the weathered zones. A potential further mineralisation of some 4.2Mt higher grade graphite in the Camp Lode remains to be added ahead, which the Company will consider converting into JORC Standard Resource as part of the DFS works. The better understanding built from the 100% conversion of the weathered material is expected to also result in the full conversion of this remaining 4.2Mt.

Therefore, the Potential Mineralisation for both areas can be summarised as follows:

GC - Graphitic carbon, TC - Total carbon

** Mineralised tonnes have been rounded off

Competent Person's Statement

The information in this release, which is related to Mineral Resource estimation, was compiled under the supervision of Mr JP van den Berg who is an employee of Minrom Consulting (Pty) Ltd; he is Member of the Geological Society of South Africa (GSSA) and a Certified Professional Natural Scientist (Pr.Sci.Nat) with the South African Council for Natural Scientific Professions (SACNASP). 

Mr Van den Berg has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity that he has undertaken to qualify as a Competent Person as defined by the JORC (2012) Code. Mr Van den Berg consents to the inclusion in this report of the matters based on his information in the form and context in which it appears

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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 moving through the Feasibility Study phase as it drives towards first production targeted for 2023.

Orom-Cross presents as a large, shallow open-pitable deposit, with a revised JORC Measured, 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.

Akelikongo Nickel Project

Akelikongo is a highly prospective nickel sulphide exploration project that has previously had considerable work completed by Rio Tinto and Sipa to establish three mineralised lenses to date. It represents an opportunity for Blencowe to add further value through a targeted work programme that will seek to delineate higher grade and thicker intercepts of nickel.

Nickel sulphide deposits are rare and valuable and the prospect of further exploration success gives Blencowe suitable incentive to develop this asset under a structured earn-in agreement, whereby 100% of the asset can ultimately be acquired for US$1.5m, 100% payable in shares.