REG - Blencowe Resources - Export Approval for Bulk Samples

Blencowe ResourcesAnnouncement

11/01/2023 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230111:nRSK3154Ma&default-theme=true

RNS Number : 3154M  Blencowe Resources PLC  11 January 2023

Date: 11 January 2023
Blencowe Resources Plc

("Blencowe" or the "Company")

 

Government Approval to Export Bulk Samples from Orom-Cross Graphite Project
Kick Starts Final Stage Metallurgical Testing

 

Highlights

·    Ugandan Government approves landmark one-off permit for Blencowe to
export bulk sample graphite from Orom-Cross for key final testing

·    Underlines huge support for Orom-Cross advancement to production at
all levels within the country

·    Blencowe has successfully completed two rounds of smaller sample
metallurgical testing on Orom-Cross graphite during 2022, using technical
firms in Canada and Australia.

·    Mandate signed with experienced Chinese graphite processing
specialist Jilin Huiyang New Material Technology Company Ltd to use its
existing bulk pilot facility for final metallurgical testing.

·    100 tonnes of bulk sample to be mined immediately and sea-freighted
to China.

·    Additional 150kgs sample to be mined and fast-track delivered to
China by air freight for initial off-site testing in same facility.

 

Blencowe Resources Plc ("Blencowe Resources" or the "Company") (LSE: BRES) is
pleased to announce it has received an approval from the Ugandan Ministry of
Energy and Mineral Development to export materials from its Orom-Cross
Graphite Project to Chinese testing facilities to enable final bulk
metallurgical test work to be undertaken in 2023.  Blencowe has mandated
Jilin Huiyang New Material Technology Company Ltd ("Jilin") to complete this
test work in their existing pilot plant facility, which negates the
requirement for the Company to build its own bulk testing facility on-site in
the near term.

Jilin has over 30 years direct experience in graphite processing and has
completed similar bulk sample testing for other leading international graphite
companies in the past.  This is a key step in the process to pre-qualify
Orom-Cross end-products as concentrates through to OEMs in order to ultimately
achieve binding offtake contracts for production from the Project.

As Ugandan Mining Law does not allow for the export of unprocessed raw
materials this approval is a landmark decision by the Government, who fully
understand the need and requirement for this testing to occur as a key action
for the advancement of Orom-Cross towards first production.  Blencowe
acknowledges and appreciates the support of the Government of Uganda and the
Ministry of Energy and Mineral Development in this matter.

The export permits for 100t of bulk raw ore materials and 400 litres of local
groundwater will enable the Company to export a representative bulk sample
from the initial 5 years of production, which will be used to assess the
metallurgical processes on a commercial scale including differing plant
components to maximise the grade, recovery and flake sizing from the Project.
The addition of the groundwater sample will enable the test facilities to
assess the water characteristics in terms of the reagents required under
proposed site operating conditions.

Works to excavate and transport the bulk samples will begin immediately and
will be freighted by sea to China to have the testing completed as quickly as
practically possible.  In addition, 150kgs of the same samples will be
air-freighted to same Jilin facility more quickly to undergo metallurgical
testing and build knowledge before the larger samples arrive.

Blencowe has already been able to share significant data with Jilin 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, will be done on a
considerably larger scale, which will give all parties more knowledge of the
end concentrates that can be produced on a production scale 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 one solution to the
CAPEX requirement for initial stage production.

 

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 an initial 14-year mine life, from just ~2% drilled from our
broader graphite resource.

 

This bulk sample trial is significant as a precursor that ultimately leads us
to a full offtake agreement, which in turn would enable us to kick start
production with a critical mass of product sold to drive profitability and
cash flow.  If successful it can also lead to building an EPC relationship
and potential funding solutions.

 

The graphite market is evolving very quickly and we will see a lot of change
ahead as the world expands from current 15-20 million electric vehicles (EVs)
towards the targeted 100 million by 2030. This in turn will drive up the
demand for flake graphite as a non-replaceable input required to produce
lithium-ion batteries to power these EVs and leading analysts forecast a 300%
rise in world demand for graphite by 2030.  We are already seeing prices rise
in anticipation of this looming shortage.  The Chinese graphite market
remains the largest and will likely remain so for some time ahead, thus
establishing a strong and commercial relationship with both Chinese and other
Asian partners is decisive for Orom-Cross and a natural progression for the
Company."

 

For further information please contact:

 

 Blencowe Resources Plc   www.blencoweresourcesplc.com

 Sam Quinn                Tel: +44 (0)1624 681 250

                          info@blencoweresourcesplc.com (mailto:info@blencoweresourcesplc.com)

 Investor Relations       Tel: +44 (0) 7891 677 441

 Sasha Sethi              sasha@flowcomms.com (mailto:sasha@flowcomms.com)

 Tavira Securities        Tel: +44 (0)20 3192 1733

 Jonathan Evans           jonathan.evans@tavirasecurities.com
                          (mailto:jonathan.evans@tavirasecurities.com)

 First Equity Limited     Tel: +44(0)20 7330 1833

 Jason Robertson          jasonrobertson@firstequitylimited.com
                          (mailto:jasonrobertson@firstequitylimited.com)

Twitter https://twitter.com/BlencoweRes (https://twitter.com/BlencoweRes)

LinkedIn https://www.linkedin.com/company/72382491/admin/
(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
completed a successful Pre-Feasibility Study in 2022.  The Company has now
moved 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, with only a small percentage of the overall deposit drilled
to date. Development of the resource is expected to benefit from a low strip
ratio and free dig operations, thereby ensuring lower operating and capital
costs.

 

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  MSCBMMTTMTMBTJJ