Blencowe Resources PLC Strategic Party (5047B)
October 03 2022 - 2:00AM
UK Regulatory
TIDMBRES
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 NPV 8 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 www.blencoweresourcesplc.com
Sam Quinn Tel: +44 (0)1624 681 250
info@blencoweresourcesplc.com
Investor Relations Tel: +44 (0) 7891 677 441
Sasha Sethi sasha@flowcomms.com
Tavira Securities Tel: +44 (0)20 3192 1733
Jonathan Evans jonathan.evans@tavirasecurities.com
First Equity Limited Tel: +44(0)20 7330 1833
Jason Robertson 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
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