Date: 10 June
2024
Blencowe
Resources
("Blencowe" or the
"Company")
First Offtake MOU Signed for
15,000 Tonnes of Large Flake Per Annum
Agreement provides for sale of
significant percentage of large flake end
products
Blencowe Resources signs its first non-binding
Memorandum of Understanding ("MOU") for natural large flake
concentrate offtake from the Orom-Cross Graphite Project.
Partnering with Jilin New Technology Graphite Co.
("Jilin"), a prominent
global graphite consumer, this initial MOU is the first of several
offtake agreements anticipated to complete in the near future ahead
of completing the DFS.
Highlights:
·
Offtake Supply
Agreement: MOU to supply 15,000t/annum of
blended large flake graphite, covering 66% of Orom Cross initial
large flake production for up to three years from start.
·
Industry
Leader: Jilin is a leading processor of battery
anode materials and expandable graphite based in north east
China.
·
Pricing Terms to
Follow: Pricing to be agreed under the terms of
a formal agreement to be entered into following completion of the
Orom-Cross Definitive Feasibility Study ("DFS").
·
Higher Revenue
Contribution: As large flake concentrate
commands substantially higher prices than small flakes this MOU
covers approx. 50% of the total revenue from Orom-Cross.
·
Product Validation through
Testing: Initial offtake MOU follows
substantial test work, validating product quality.
·
Advanced Pilot Plant
Progress: 600-tonne bulk sample test program
nearing completion, facilitating direct engagement with potential
customers for small flake concentrate.
·
Ongoing Tier-One
Discussions: Following successful trip to China
and South Korea, Blencowe maintains positive discussions with
tier-one offtakers worldwide for the balance of its planned annual
graphite production.
Jilin
MOU
The Jilin MOU follows extensive discussions
between Blencowe senior management during the recent visit to
China, and follows successful bulk testing of graphite concentrate
produced by Orom-Cross.
Jilin, a leading vertically integrated graphite
producer, is the parent company of the group that completed the 100
tonne bulk sample for Blencowe in 2023 and is currently undertaking
the 600t bulk sample processing program which is nearing
completion.
The 600t bulk sample will generate commercial
scale graphite concentrate divided into large and small
flakes. The small flake concentrate will be upgraded to
99.95% by a leading Chinese SPG (spheronised purified graphite)
producer, to be distributed to OEMs thereafter for their own
testing. Completion of this exercise will be in Q3 2024,
facilitating qualification of Orom-Cross small flake products with
tier-one offtakers and paving the way for offtake agreements
(currently under discussion). This small flake
qualification process leading to offtake agreements, which often
takes several years, has been expedited by Blencowe who will have
completed it in a much shorter timeframe than other graphite
companies.
Unlike small flake product, large flake
products do not require the same qualification process, hence the
more rapid move to signing this first MOU.
Orom Cross
Production
The Pre-Feasibility Study envisages Orom-Cross
initially delivering 50,000tpa of concentrate post commencement of
full mining operations. Approximately 45% of this will be
delivered as large flake products which means that the Company will
have up to 22,500t per annum of large flake capacity to
sell.
This Jilin MOU thus encompasses two-thirds of
the company's proposed steady state production of large flake
graphite products (+100mesh, +80mesh and +50mesh) within the first
three years. Thereafter it is anticipated the overall
production volume will ramp up substantially. Given that
large flake concentrate commands substantially higher prices than
small flakes, this 15,000tpa to Jilin represents nearly 50% of the
anticipated initial total revenue from Orom-Cross, underscoring the
MOU's significance in the context of future project financing and
returns.
Other
MOUs
Blencowe is currently in advanced negotiations
with multiple leading OEMs in China and South Korea regarding the
sale of its remaining large flake products and smaller flake
products utilised in batteries. These discussions have been
positive and the Company anticipates delivering further MOUs with
leading buyers of graphite products worldwide with the aim of
securing offtake partners for the entire production output from
Orom-Cross.
Executive
Chairman Cameron Pearce commented:
"This MOU is
a key milestone for the Company and it is just the beginning. We
anticipate announcing several more agreements over the next few
months. Jilin is a leading graphite company globally and this is a
strong endorsement of the graphite product from
Orom-Cross.
The 600-tonne
bulk testing program will allow us to provide concentrate to
qualify our small flake products through a rigorous qualification
process so that we can progress offtake discussions with other
tier-one consumers of graphite. We have been able to fast-track
what is typically a lengthy process and look forward to completing
this qualification process shortly by delivering the relevant
concentrate and SPG to these groups.
"This
key milestone reflects the rapid progress we have made. Over the
coming months we expect to maintain momentum by securing further
MOUs and advancing the DFS. Each step brings us closer to unlocking
more value and further de-risking the Orom-Cross project. We look
forward to delivering further updates on project key components
particularly results of our 600-tonne testing programme and further
on offtakes."
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 has moved into 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.