Blencowe Resources (BRES.L) Results of Metallurgical Test Work

Met Test Results Completed

*First Equity Limited act as Joint Broker to the Company. 

This morning, Blencowe Resources (BRES.L) announced that metallurgical test work on its 100% owned Orom-Cross graphite project in Uganda had been successfully completed by technical consultants SGS Lakefield, with all 5 key objectives being met or exceeded.

The management also outlined the next stages in the project’s advancement, including an internal preliminary economic assessment, followed by a pre-feasibility study.

RNS Update


One important objective is the confirmation of a high enough Total Graphite Content (TGC) percentage, given that a significant premium on market price can be obtained for each additional 1% TGC. A concentrate grade at 97-98% TGC was derived from the test work, which exceeded the objective of reaching 95%-97%, with a healthy headroom over an entry level concentrate of 94%. The ticking of the boxes for other key objectives, such as a high recovery rate of 80% to 90%, low to no impurities, a standard processing facility and a high percentage of jumbo/XL/large flakes all bodes well so far, for the advancement of this project towards commerciality.

Looking ahead, we anticipate an acceleration in news-flow from Blencowe, as its 2,000-metre drill programme is completed this month and then an internal preliminary economic assessment is undertaken ahead of a pre-feasibility study. All this news should outline both the economic case for Orom-Cross and the world class potential of the graphite deposit in terms of size (potentially 2 to 3 billion tonnes) and end-product quality.

The news-flow which may move the dial most significantly in the near term could from the securing of an offtake party(s), the discussions for which can now take place using the test data produced by SGS Lakefield.

With today’s news strengthening the economic potential of Orom-Cross and its ability to fuel the impending Electric Vehicle (EV) age, we believe that a sizeable market re-rating awaits Blencowe Resources. Before the stock-market opened this morning, the market capitalisation sat at an early-stage resource exploration valuation of just £7.4m, rather than a figure which should, in our view be at least £25m to £50m prior to the details of a preliminary economic assessment being known, to therefore represent a mid to late-stage resources valuation. With such compelling thoughts in mind and a wealth of potential high-impact news-flow on the horizon, we continue to rate the shares as a ‘Buy’ with an initial price target guidance of 21p per share.

Jason Robertson

D: +44 (0)20 7330 1883
E: [email protected]

*First Equity Limited act as Joint Broker to the Company.

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