REG - Jangada Mines PLC - Investee Company Update: Blencowe Resources PLC

Jangada MinesAnnouncement

05/09/2024 10:00

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RNS Number : 0716D  Jangada Mines PLC  05 September 2024

Jangada Mines plc / EPIC: JAN.L / Market: AIM / Sector: Mining

5 September 2024

Jangada Mines plc ('Jangada')

 

Investee Company Update: Blencowe Resources PLC

 

Jangada Mines plc, a natural resources development company with interests in
Brazil and elsewhere, is pleased to note the announcement released by Blencowe
Resources PLC (LON:BRES) in which it holds a c. 10% interest.

 

Jangada Executive Chairman, Brian McMaster, said: "Blencowe has delivered more
positive news by forming a strategic partnership with two highly experienced
Asian graphite specialists. This collaboration not only mitigates operational
risks but also secures a strong commercial future for Orom-Cross, positioning
the project to supply premium battery-grade graphite to OEMs outside of China,
and offering significant political, commercial, and operational advantages."

 

Start of Blencowe Resources PLC announcement

 

5 September
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 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.

 

End of Blencowe Resources PLC announcement

 

**ENDS**

 

For further information please visit www.jangadamines.com
(http://www.jangadamines.com/)  or contact:

 

 Jangada Mines plc                     Brian McMaster (Chairman)  Tel: +44 (0)20 7317 6629
 Strand Hanson Limited                 Ritchie Balmer             Tel: +44 (0)20 7409 3494

 (Nominated & Financial Adviser)       James Spinney

 Tavira Securities Limited             Jonathan Evans             Tel: +44 (0)20 7100 5100

 (Broker)

 St Brides Partners Ltd                Ana Ribeiro                jangada@stbridespartners.co.uk

 (Financial PR)                        Isabel de Salis

 

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