TIDMBRES
RNS Number : 0432L
Blencowe Resources PLC
28 April 2020
28 April 2020
Blencowe Resources Plc
("Blencowe" or the "Company")
Acquisition of the Orom-Cross Graphite Project
Completion of oversubscribed GBP2m fundraise at 6p per share
Fully-Funded 2020 Work Program to enable maiden JORC
Resource
Readmission to the Standard List of the LSE
Blencowe Resources Plc (LSE: BRES), a special purpose
acquisition company formed to undertake one or more acquisitions of
a company or business in the natural resources sector, is pleased
to announce that it has completed the transaction to acquire the
Orom-Cross Graphite Project and in conjunction raise GBP2m of gross
proceeds, thereby enabling its readmission today to the Standard
List of the LSE.
A copy of the Prospectus for the transaction can be found on the
Company's website, along with a new corporate presentation
(https://blencoweresourcesplc.com/).
To view the press release with the illustrative maps and
diagrams please use the following link:
https://blencoweresourcesplc.com/project/
Highlights
-- The Orom-Cross Graphite Project is a potential world class
graphite project both by size and end-product quality, with circa
75% of the resource expected to comprise of the most desirable and
high value jumbo, extra-large and large flake product.
-- The deposit presents as a large, shallow open-pitable mine,
with anticipated low strip ratio and free dig operations,
suggesting future OPEX and CAPEX within the lowest quartile when
compared to other producers.
-- A 21-year Mining Licence was awarded in 2019, significantly derisking any development.
-- Situated in Uganda, the Orom-Cross deposit has the added
benefit of being in one of the more stable jurisdictions to house
significant graphite deposits.
-- The Company will undertake a significant and fully funded
drilling campaign during 2020 to define a maiden JORC Resource on
part of the broader 3.7 billion tonne graphite deposit.
-- Blencowe will also complete further metallurgical studies,
targeting recoveries of 80% and 96- 97% TGC (Total Graphite
Content), thereby confirming a high value product and enabling
discussions with potential off takers to commence.
-- The Company acquired the Orom-Cross Graphite Project for
consideration of GBP2m through the issue of 33,333,333 shares at
6p. The vendor's shares are locked-in for 12 months and will be
retained by Blencowe during this period.
-- The Company has raised Gross Proceeds of GBP2m at 6p per
share through a placing of GBP1.5m via Brandon Hill Capital and
subscription by an African based strategic investor for
GBP500,000.
-- With an Enterprise Value of less than GBP4m and approximately
70% of outstanding shares held by either the Board or significant
investors, Blencowe is well positioned to add value for
shareholders in the event of operational success.
Background on the Orom-Cross Graphite Project
The Project lies within the Orom District, of Northern Uganda,
75km northeast of the regional centre at Kitgum (Figure 1). The
Project tenements cover an area of approximately 520,000 Ha and the
project's exploration target is centred within a granted Mining
Lease (ML1959) and Exploration Licences (Figure 2). Orom-Cross is a
potential world class graphite project both by size and end-
product quality, with a large component of high value jumbo and
large flake product.
Figure 1: Project Location
Since discovery in 1964 whilst targeting base metals, the
following exploration activities have been undertaken:
-- Field mapping;
-- Geophysical surveys (VTEM and Aeromagnetic);
-- Geological logging and geochemical analyses of drill core samples;
-- Geological logging and geochemical analyses of trench samples;
-- Metallurgical testwork of composites; and
-- Determination of Exploration Target ranges.
Figure 2: Project Target Areas
Orom-Cross Project Highlights
-- The deposit presents as a large, shallow open-pitable mine,
with anticipated low strip ratio and free dig operations. This
presents a huge advantage as it means operating costs will likely
be very low for Orom-Cross.
-- The deposit contains a large proportion of Jumbo, Extra Large
and Large flakes, which typically deliver a significantly higher
price in the market as they are in shorter supply.
-- The Company's strategy is to combine a low-cost mining
operation with a higher weighted average price for its end product,
to ultimately deliver a substantial margin per tonne from a pure,
high grade concentrate.
-- This graphite will be produced from a project that has a very
long mine life and is located in a safe, stable country in
comparison to where most other graphite is produced. These factors
would all provide key points of differentiation from the majority
of graphite delivered into world markets.
Fully Funded Work Programme
Blencowe will be targeting drilling in the north-eastern
mineralized lode of GT03 (Figure 2), identified in historic works
and more recently in initial drilling in the Q1 2020 work
programme. The focus of the campaign will be on:
-- Defining a maiden JORC (2012) Resource in 2H 2020;
-- Completion of metallurgical test work, which began in H2
2019, to confirm composition of the final product (in terms of a
graphite concentrate);
-- Increasing overall metallurgical recoveries; and
-- Commencing feasibility studies to determine the commercial parameters of the project.
The Transaction
The Company's entire issued ordinary share capital of 98,333,326
ordinary shares of 0.5 pence each ("Ordinary Shares") will today be
readmitted to the Standard Listing segment of the Official List and
to trading on the Main Market for listed securities of the London
Stock Exchange (together, the "Readmission"). Dealings will
commence at 8.00 a.m. today under the TIDM code "BRES" (ISIN:
GB00BFCMVS34).
-- This follows the completion of the acquisition of the entire
issued share capital of Consolidated African Resources (Uganda) Ltd
(the "Acquisition"), a Ugandan registered company, which was the
previous owner of the Orom-Cross Graphite Project in northern
Uganda. The total aggregate consideration payable by the Company is
GBP2m and has been satisfied in full by the issue of 25,000,000
Ordinary Shares to Consolidate Africa Limited and 8,333,333
Ordinary Shares to New Energy Minerals Africa Pty Ltd at a price of
GBP0.06 per share.
-- In conjunction with the Acquisition, the Company has raised
GBP2m before expenses, through the issue of 24,999,994 Ordinary
Shares to placees and 8,333,333 Ordinary Shares to subscribers at a
price of GBP0.06 per share
-- The issued share capital of Blencowe prior to the Acquisition
and Readmission was 31,666,664 shares.
-- Blencowe has granted subscribers and placees 16,666,666
warrants to subscribe for shares at 8p per share, valid for 5
years.
Cameron Pearce, Executive Chairman commented:
"We are delighted to have successfully completed the transaction
and look forward to rapidly building value by advancing the
Orom-Cross Graphite Project in Northern Uganda. The graphite sector
places a premium value on the flake sizes that we have at Orom and
we believe the mining operation will be well positioned in the
lowest quartile on the cost curve.
Also, it is particularly timely that global consumers of
graphite are discussing new supply channels. In the near term, we
are going to rapidly build the project with our fully funded work
programme with the aim of engaging with industrial users towards
the end of the year. Moreover, we have been very fortunate to
receive the support from a number of sophisticated and strategic
long-term investors that will help us build this company. We look
forward to updating the market in due course as we unlock value and
complete our work programmes."
For further information please contact:
Blencowe Resources Plc
Cameron Pearce / Mike Ralston / Sam Quinn
www.blencoweresourcesplc.com
Tel: +44 (0)1624 681 250
info@blencoweresourcesplc.com
Brandon Hill Capital Limited
Jonathan Evans (Corporate Finance)
Tel: +44 (0)20 3463 5000
jonathan.evans@brandonhillcapital.com
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END
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