Over-Subscribed £2m Capital Raise
Company now fully funded through next 12 months of Project development, including Pre-Feasibility Study
12 November 2021
Blencowe Resources Plc
(“Blencowe” or the “Company“)
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Highlights;
- Over-Subscribed £2m fund-raise, including subscriptions from Blencowe Board
- Orom-Cross now fully funded through to completion of PFS
- Outlook for graphite market continues to strengthen, driven by EV sector
Blencowe Resources (LSE: BRES) (Blencowe or the Company) is pleased to announce the successful completion of an over-subscribed capital raise for £2 million at 5p through the issue of 40,000,000 new ordinary shares (“Fundraise”). This includes a subscription of £75,000 from the Directors and CEO. The Fundraise is subject to a simplified prospectus that is currently being approved by the FCA ahead of the seeking of shareholder approval at a general meeting to be arranged. The Company anticipates that admission of the new ordinary shares will be in approximately 21 days.
Use of Funds
These funds will be used for the further development of the Company’s flagship Orom-Cross graphite project in Uganda, including:
- an updated JORC Resource early next quarter; and
- Delivery of a Pre-Feasibility Study (“PFS”) by mid-2022.
Blencowe announced results of the Preliminary Economic Assessment (“PEA”) for Orom-Cross in September 2021, which highlighted a long-life, low-cost graphite project that delivers significant operating margin per tonne; the resultant NPV (US$317 million) and IRR (49%) are considered exceptional and as such the Company has moved into PFS stage. The Company will further refine the project economics in the PFS and continue to use these studies to engage with strategic and industrial parties that are seeking graphite product.
Terms of the Fundraise
The capital raise was managed by the Company’s brokers First Equity and Brandon Hill Capital and was completed at 5p per new ordinary share with half a warrant per new ordinary share that is exercisable at 8p for 3 years from admission to trading. This price represents a minimal discount to the 10-day VWAP and illustrates the strong support for both the project and the wider battery metals market. Blencowe is also pleased to announce the inclusion of several institutional funds that have participated in the Fundraise.
A further announcement will be made regarding the timetable for admission of the shares to the LSE and issue of the prospectus following the expected near-term approval by the FCA.
Graphite is an essential, non-replaceable input material into lithium-ion batteries which will be manufactured in ever-increasing quantities ahead to power electric vehicles (EVs). Analysts forecast that the current 14 million EVs worldwide will rise to somewhere between 100 – 500 million by 2030, all of which will require batteries. Over the past three years the number of megafactories, designed and built to mass produce lithium-ion batteries, has risen from circa 50 worldwide to over 250 either in production or being commissioned, and the number continues to grow monthly. Together these megafactories represent a substantial future demand for graphite.
With Orom-Cross representing a renewable energy source material there has been considerable interest from funds who wish to become more involved in green energy including the battery metals market. This represents a significant milestone as the Company develops its profile, and it further underlines the potential within the Orom-Cross graphite project.
Cameron Pearce, Executive Chairman commented:
“We are grateful to all the existing and new shareholders that have supported the Fundraise. The Company is now fully funded through its next important phase of development and as we continue to develop Orom-Cross and it becomes increasingly apparent what a standout graphite project it is, I would expect to see the gap between our current market cap of circa US$9M and PEA-derived NPV of US$317M progressively converge.
We are focused on continuing to optimise the economics of Orom-Cross further, with the next step in this process being an updated JORC Resource early next quarter, targeting both resource expansion and further grade uplift”
For further information on please contact:
Blencowe Resources Plc Sam Quinn | www.blencoweresourcesplc.com Tel: +44 (0)1624 681 250 |
Investor Relations Sasha Sethi | Tel: +44 (0)7891 677 441 |
Brandon Hill Capital Limited Jonathan Evans | Tel: +44 (0)20 3463 5000 [email protected] |
First Equity Limited Jason Robertson | Tel: +44(0)20 7330 1883 |
Twitter https://twitter.com/BlencoweRes
LinkedIn https://www.linkedin.com/company/72382491/admin/
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Background
Orom-Cross is a poten al 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 following delivery of excep onal metallurgy test results (July 2021 and an outstanding Preliminary Economic Assessment (September 2021) Blencowe is moving into the Pre-Feasibility Study (PFS) stage as it drives towards first produc on.
Orom-Cross is a large, shallow open pitable deposit, with an es mated overall resource between 2-3 billion tonnes of graphite with 16.3Mt already drilled to JORC Resource standard, covering an ini al 13-year life of mine. Development of the resource is expected to benefit from a low strip ra o and free dig opera ons thereby ensuring lower opera ng and capital costs.
Blencowe’s Preliminary Economic Assessment (PEA) for Orom-Cross presents the project as low-cost with robust financials and the Company is confident that Project economics can improve further, notably by extending the life of mine and/or increasing the levels of produc on. The September 2021 PEA delivered an NPV8 of US$317M and IRR 49% with an average nameplate produc on of 75,000tpa graphite sold as concentrate, with ability to extend this a er further drilling.