Blencowe Resources has secured a grant of US$5 million from the US government-supported Development Finance Corporation (DFC) for a definitive feasibility study on its Orom-Cross graphite project in Uganda.
This financial support is a component of a strategy spearheaded by President Biden, aiming to ensure the US has dependable sources of essential metals. This occasion marks the first time DFC has backed a pre-production graphite project, according to Blencowe.
Of the total US$5 million, provided as a Technical Assistance Grant (TAG), the DFC retains a right of first refusal to organize project financing for the Orom-Cross project on commercial terms. An initial sum of one million from the grant is to be disbursed immediately, with the balance following as the feasibility study reaches certain milestones.
- Ground-breaking technical assistance agreement signed with tier one financial institution to provide Blencowe with significant funding for DFS programme.
- US$5 million to be input by the DFC as a grant, with a 20% upfront contribution (US$1 million) to be paid immediately.
- Further DFC payments will be made upon as-agreed feasibility study milestones being achieved.
- DFC is the United States of America’s (“US”) leading development finance institution that partners with the private sector to provide finance solutions for project development in markets deemed as critical to US interests.
- DFC is geared to provide funding assistance for Orom-Cross as part of the US Government’s strategic drive to secure a reliable supply chain of critical minerals and metals, within its wider US$1 trillion Biden-renewables strategy.
- As part of the US$5 million Technical Assistance Grant (“TAG”) the DFC has a right of first refusal on commercial terms to arrange project financing for the Orom-Cross project, which may deliver Blencowe with a potential full funded solution to bring Orom-Cross into production with support from the tier 1 major financial institution.
- The DFC partnership opens up the potential for Blencowe to consider a larger scale project with potentially far greater returns within the DFS. This will have material ramifications on overall Orom-Cross project value ahead.
Blencowe’s Executive Chairman, Cameron Pearce, remarked on the funding partnership with the DFC as a pivotal and unprecedented development for the company. He noted that, to their knowledge, no other graphite project globally has received a similar grant from the DFC to date.
Pearce reflected on the promising US$482 million NPV Blencowe had projected for Orom-Cross in the Pre-Feasibility Study the previous year, expressing optimism for achieving an even higher value NPV in the Definitive Feasibility Study. He highlighted the increasing demand for graphite, given its essential yet often underappreciated role in lithium-ion batteries.
With an estimated 2-3 billion tonnes of graphite, the Orom-Cross project boasts one of the largest and highest quality deposits worldwide
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