TIDMJAN
RNS Number : 3512N
Jangada Mines PLC
22 September 2023
Jangada Mines plc / EPIC: JAN.L / Market: AIM / Sector:
Mining
22 September 2023
Jangada Mines plc ('Jangada')
Investee Company Update: Blencowe Resources PLC
Jangada Mines plc is pleased to note the announcement released
by Blencowe Resources PLC (LON:BRES) in which it holds a c. 10%
interest. The announcement is set out below without material
changes.
Start of Blencowe Resources PLC announcement
Date: 22 September 2023
Blencowe Resources Plc
("Blencowe" or the "Company")
Blencowe Awarded US$5 Million Grant from Development Finance
Corporation for Orom-Cross Graphite Project
Orom-Cross is the first pre-production graphite project to
achieve DFC (US Govt) funding support
DFC to co-fund the Definitive Feasibility Study and also to be
lead partner for the project financing ahead to take Orom-Cross
project into production
Highlights:
-- Ground-breaking technical assistance agreement signed with a
tier one financial institution to provide Blencowe with significant
funding for the Definitive Feasibility Study ("DFS") programme.
-- US$5 million to be input by Development Finance Corporation
("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.
-- US International Development Finance Corporation is America's
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 full funded solution to bring Orom-Cross
into production with support from a major financial
institution.
-- The DFC partnership opens up the opportunity 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 Resources Plc ("Blencowe" or the "Company") (LSE: BRES)
is pleased to announce it has signed a US$5 million agreement with
the DFC in order to provide substantial funding for the Orom Cross
DFS programme, via a Technical Assistance Grant. The DFC is a proxy
for the US Government which funds the organisation and ultimately
sets its vision, parameters and funding distribution.
Cameron Pearce, Executive Chairman commented;
"This funding relationship with the DFC is a unique and
game-changing event for Blencowe. To the best of our knowledge
there has been no other graphite project worldwide that has
received a similar type grant to date from the DFC. We appreciate
and we value this support and we will do everything we can to build
their trust within this relationship, to ensure we deliver a high
quality project together.
We believe that having DFC as our strategic project partner
substantially de-risks Orom-Cross and provides us with the means to
deliver a world class project from here. Blencowe presented an
excellent US$482 million NPV for Orom-Cross within the
Pre-Feasibility Study last year but we are now optimistic that we
can deliver an even greater value NPV within the Definitive
Feasibility Study as we can significantly expand the project
horizons.
With the support of the DFC we can address one of the major
challenges and risks to any mining operation, being the clear
pathway to fund the project into production. We now have the
opportunity to build Orom-Cross with the comfort of having a
partner with the means to deliver this."
Mr Pearce added "Graphite demand is rising fast and will
continue to do so. It is one of the under-rated but key components
of the lithium-ion battery and it is irreplaceable in this regard.
As such any future anticipated surge in demand for these batteries,
not just for electric vehicles but for energy storage in all other
renewable capacities, will continue to accelerate demand for
graphite. We now have the means to deliver one of the leading
graphite projects in the world and a highly incentivised tier one
partner with whom we will work with to do that."
DFC Technical Assistance Grant (TAG)
This is an innovative funding mechanism for the DFC to become
involved at an early stage with key projects that they consider to
be within their direct scope and strategy. As Orom-Cross contains
an estimated 2-3 billion tonnes of graphite and is one of the
largest, high quality deposits worldwide it has considerable long
term appeal to the DFC. Graphite remains high on the US Government
critical metals and minerals list, hence this relationship with
Blencowe opens a potential supply chain for high value end-product
over a very long life of mine.
DFC has been working closely with Blencowe through this TAG
process and both the Company and the Orom-Cross project have been
subjected to all necessary due diligence in order to progress DFC
interest into this monetised initial funding solution. Both parties
see considerable long term value in their association with one
another and Blencowe is confident this relationship will assist to
provide a larger project funding solution ahead. One of the key
terms within the TAG Agreement is for DFC to be mandated to provide
financing for the full Orom-Cross project on commercial terms.
Prospective new graphite producers need to think outside the box
to find innovative funding solutions in order to deliver their
projects and the DFC relationship provides this for Orom-Cross. Not
only does the US$5 million grant cover a significant portion of the
DFS costs, which materially reduces the dilutionary impact to
Blencowe of funding the full DFS itself, but it also provides a
highly motivated full mine implementation funding partner ahead.
Furthermore, the credibility associated with partnering one of the
leading tier one financial institutions worldwide will open a
variety of other relationships ahead as key players in the graphite
market (including end user OEMs) can see a new high quality
graphite project emerging that now has a more certain pathway to
production.
Blencowe will immediately request the upfront payment of the
initial 20% of the TAG (US$1 million), which together with the
Company's existing funds provides the means to continue DFS work
underway and deliver the next as-agreed milestone payment with DFC.
Once this next milestone is achieved further DFC funds are unlocked
and so on, until the full grant is utilised and ultimately the DFS
is completed.
One substantial advantage that now comes into play with the DFC
relationship is that Blencowe is able to consider a larger-scale
production strategy than it could do under the base-case scenario
that the Company was considering whilst funding solo. The
implications of this are enormous and the Company will provide a
further update on this once the revised strategy is finalised. The
expectation would be for a larger project from day one with a
downstream processing facility built in-country to produce an
uncoated battery-ready 99.95% SPG product. These factors above will
ultimately deliver a considerably higher Net Present Value than the
US$482 million NPV achieved within the 2022 Pre-Feasibility
Study.
About International Development Finance Corporation
The DFC is the primary US Government finance institution set up
to provide financially sound funding solutions for private-sector
initiatives pertaining to critical challenges facing the world, in
this case the drive towards increased sustainability across the
planet. It is an agency of the United States federal government and
represents US interests.
DFC's lending capacity is used to provide loans, guarantees,
equity investments and political-risk insurance for private-sector
led development projects, feasibility studies and technical
assistance. DFC invests across several sectors with stated goals of
empowerment, innovation, investment into Africa, green energy and
climate change.
Orom-Cross is directly linked with several of these goals. This
project may ultimately become one of the largest graphite producing
operations in the world over a very long mine life, delivering an
end-product in a sustainable manner which is a non-replaceable
input component to lithium-ion batteries. Demand for graphite is
accelerating at a rate where it is doubling every few years, and is
expected to continue growing exponentially into the future.
Graphite is therefore high on the US Government critical metals and
minerals list and assisting to open up long term supply chain of
graphite is a key strategy.
Orom-Cross will also deliver a 'green' graphite product through
a variety of production initiatives, including the use of
hydro-electric power for all mining and processing energy
requirements. Orom-Cross aims to become one of the leading
sustainable mining projects worldwide and this is a very important
component of the DFC charter and critical within a rapidly changing
landscape where every participant along the EV supply chain will be
audited on their sustainability credentials by OEMs.
Orom-Cross's potential ability to aid in the further development
of the Ugandan economy, empowering its population and driving
investment and future development has also proved attractive to the
DFC.
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. Blencowe completed a successful Pre-Feasibility Study
on the Project in July 2022 and is now within the Definitive
Feasibility Study phase as it drives towards first production.
Orom-Cross presents as a large, shallow open-pitable deposit,
with an initial JORC Indicated & Inferred Mineral Resource of
24.5Mt @ 6.0% TGC (Total Graphite Content). This Resource has been
defined from only 2% of the total tenement area which presents
considerable upside potential ahead. Development of the resource is
expected to benefit from a low strip ratio and free dig operations
together with abundant inexpensive hydro-electric power off the
national grid, thereby ensuring low operating costs. With all major
infrastructure available at or near to site the capital costs will
also be relatively low in comparison to most graphite peers.
End of Blencowe Resources PLC announcement
**ENDS**
For further information please visit www.jangadamines.com or
contact:
Jangada Mines plc Brian McMaster (Chairman) Tel: +44 (0)20 7317 6629
Strand Hanson Limited Ritchie Balmer Tel: +44 (0)20 7409 3494
(Nominated & Financial James Spinney
Adviser)
Tavira Securities Jonathan Evans Tel: +44 (0)20 7100 5100
Limited
(Broker)
St Brides Partners Ana Ribeiro jangada@stbridespartners.co.uk
Ltd Isabel de Salis
(Financial PR)
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September 22, 2023 02:33 ET (06:33 GMT)
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