Date: 5 Sept 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's 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.
For further information please
contact:
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 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 within 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.
