Blencowe Resources PLC Akelikongo Nickel Project Update (3998Y)
06 September 2022 - 4:00PM
UK Regulatory
TIDMBRES
RNS Number : 3998Y
Blencowe Resources PLC
06 September 2022
Date: 06 September 2022 Blencowe Resources Plc
("Blencowe" or the "Company")
Blencowe relinquishes Akelikongo Nickel Project to focus on
Orom-Cross
Blencowe Resources Plc ("Blencowe Resources" or the "Company")
(LSE: BRES) announces that is has terminated its agreement with
SIPA Resources ("SIPA") with respect to the Akelikongo nickel
project.
The decision by Blencowe to terminate the agreement means it is
no longer required to issue US$350,000 of shares to SIPA as part of
the consideration following the completion of Stage 1. It also
means that the US$500,000 spend obligation by February 2023, for
Stage 2, is no longer required.
The decision to relinquish its exposure to the Akelikongo
project has been driven primarily by the truly exceptional results
from the Pre-Feasibility Study (PFS) on the Company's flagship
Orom-Cross graphite project, which yielded a post-tax NPV 8 of
US$482M and an IRR 49% (for more information please see 19 July
2022 RNS). Accordingly, the Company believes it is in the best
interests of its shareholders to focus all of its attention and
resources on unlocking the inherent value at Orom-Cross.
Blencowe has targeted bringing Orom-Cross into initial
production before the end of 2023, in order to commence the
pre-qualification process of selling end product as concentrate
into offtake parties. Given the disconnect between plc market
valuation (US$5M market cap) and the value of the Orom-Cross
Project (NPV US$482M) the Company is focused on completing an
asset-level transaction to fund the project through development and
into production. Further updates will be provided as and when
appropriate.
Cameron Pearce, Executive Chairman commented;
"We have considered the merits of running two projects in
parallel and at this particular point we believe that concentrating
solely on our priority graphite project makes most sense. The
excellent PFS results for Orom-Cross reaffirmed its value. Whilst
this has yet to be reflected in our public markets valuation, we
are now seeing heightened interest from industry and private
equity. Accordingly we believe now is the appropriate time to focus
solely on Orom-Cross, whilst removing any unnecessary plc dilution
at this depressed level.
We do still see the synergistic benefits of another battery
metal project near to Orom-Cross and we may revisit a nickel
strategy in the future. However, we are seeing a fundamental shift
in the graphite market right now with the price of small fines
rising substantially over recent months as projected demand-supply
issues finally begin to impact. The resource used in our US$482M
NPV represents less than 2% of the total Orom-Cross resource base.
We believe the scalability of Orom-Cross will hold significant
appeal for prospective partners, particularly given a mining
licence is already in place. We are focused on reaching this
milestone and unlocking the value for all our stakeholders and look
forward to updating shareholders in due course."
For further information please contact:
Blencowe Resources Plc www.blencoweresourcesplc.com
Sam Quinn Tel: +44 (0)1624 681 250
info@blencoweresourcesplc.com
Investor Relations Tel: +44 (0) 7891 677 441
Sasha Sethi sasha@flowcomms.com
Tavira Securities Tel: +44 (0)20 3192 1733
Jonathan Evans jonathan.evans@tavirasecurities.com
First Equity Limited Tel: +44(0)20 7330 1833
Jason Robertson jasonrobertson@firstequitylimited.com
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 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 is moving into the studies phase shortly 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.
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