REG - Jangada Mines PLC - Strategic Investment

Jangada MinesAnnouncement

26/10/2022 07:00

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RNS Number : 0933E  Jangada Mines PLC  26 October 2022

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

26 October 2022

Jangada Mines plc ('Jangada' or 'the Company')

 

Strategic Investment

 

Jangada Mines plc is pleased to advise it has increased its shareholding in
London-listed Blencowe Resources PLC (LON:BRES) ("Blencowe") by 15,250,000
ordinary shares through an investment of £610,000 (the "Subscription") into
Blencowe. The Subscription was made as part of a broader £750,000 placing by
Blencowe at a price of 4p per ordinary share with an attaching half warrant
per ordinary share with an exercise price of 8p and a 3-year life (the
"Transaction").

 

Following the closing of the Transaction, the Company will have a holding of
18,750,000 ordinary shares in Blencowe, representing approximately 9.5% of
Blencowe's enlarged outstanding issued share capital.

 

About Blencowe Resources

 

Blencowe's principal asset is the 100% owned Orom-Cross graphite project in
Uganda (the "Project"). The Project has established a JORC resource of 24.5Mt
@ 6.0% TCG based on drilling undertaken on less than 5% of the Project area,
part of which already benefits from a 21-year mining licence. On 19 July 2022,
the company released a Pre-Feasibility Study ("PFS") on the Project, which
provided a Net Present Value of US$482m, based on the existing 14-year mine
life. The PFS also outlined capex to first production of US$62m, average
EBITDA of US$100m per annum and a return of US$1.1bn in free cash over the
14-year life. Blencowe recently confirmed it has received an approach from a
potential strategic partner in China and will look to deliver bulk samples for
further testing ahead of potentially entering into an agreement that could
provide the funding solution for Orom-Cross. Work on a Definitive Feasibility
Study is currently underway.

 

For the year ended 30 September 2021, Blencowe reported nil revenue and a loss
before tax of £694,726. As at 31 March 2022, Blencowe reported gross assets
of £7,032,220.

 

For more information on Blencowe, please visit its website, which contains the
corporate presentation and recent RNS outlining the development strategy of
the Project: https://blencoweresourcesplc.com/
(https://blencoweresourcesplc.com/)

 

Brian McMaster, Executive Chairman of Jangada, commented: "I am pleased to
have increased Jangada's ownership in Blencowe Resources to 9.5% through this
£610,000 investment. The purchase price of 4p per ordinary share values
Blencowe at £7.1m, or approximately US$8m, prior to its capital raise. This
valuation is some 60 times lower than the Net Present Value valuation of
US$482M ascribed to Blencowe's Orom-Cross graphite project by the independent
third party PFS released earlier this year. I believe the purchase has the
potential to be a highly accretive investment for Jangada and its
shareholders.

 

"The demand for graphite is expected to see a dramatic uptick over the coming
years with significant supply deficits forecast from 2025 onwards, as the roll
out of electric vehicles accelerates and a number of the planned 300 battery
megafactories come online. To date, graphite is yet to witness the price
movements of other battery metals such as lithium and nickel, despite being
the largest component within the anode of lithium-ion batteries. Accordingly,
we see further upside potential to the already very attractive margins at
Orom-Cross.

 

"Given the not unsubstantial cash resources currently held by Jangada
following the disposal of the Pedra Branca asset to ValOre, we believe now is
the ideal time to increase Jangada's exposure to Blencowe, and graphite, as
part of our broader focus on battery metals, which includes our vanadium
assets in Brazil."

 

This announcement contains inside information for the purposes of Article 7 of
EU Regulation 596/2014 (withdrawal). Upon the publication of this
announcement, this inside information is now considered to be in the public
domain.

 

**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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