Blencowe relinquishes Akelikongo project to focus on Orom-Cross

6th September 2022

By: Creamer Media Reporter


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London-listed Blencowe Recources has terminated an agreement with SIPA Resources to earn a stake in the Akelikongo nickel project, in Uganda, in order to focus on its nearby flagship Orom-Cross graphite project.

Blencowe had entered into an agreement with SIPA in February this year to earn a stake in the Akelikongo project, as it believed there were good synergies between Akelikongo and its own Orom-Cross project.

However, the “exceptional” results of a prefeasibility study (PFS) into Orom-Cross convinced Blencowe that it would be in the best interest of its shareholders to focus all its attention and resources on unlocking the value at Orom-Cross.

Blencowe intends to start initial production at Orom-Cross before the end of 2023.

"We have considered the merits of running two projects in parallel and, at this particular point, we believe that concentrating solely on our priority graphite project makes most sense. The excellent PFS results for Orom-Cross reaffirmed its value.

“While this has yet to be reflected in our public markets valuation, we are now seeing heightened interest from industry and private equity. Accordingly, we believe now is the appropriate time to focus solely on Orom-Cross, while removing any unnecessary dilution at this depressed level,” comments Blencowe chairperson Cameron Pearce.

He adds that the company still sees the synergistic benefits of developing another battery metal project near Orom-Cross and it may revisit a nickel strategy in future.

“However, we are seeing a fundamental shift in the graphite market right now, with the price of small fines rising substantially over recent months as projected demand-supply issues finally begin to impact. The resource used in our $482-million net present value represents less than 2% of the total Orom-Cross resource base.

“We believe the scalability of Orom-Cross will hold significant appeal for prospective partners, particularly given a mining licence is already in place. We are focused on reaching this milestone and unlocking the value for all our stakeholders and look forward to updating shareholders in due course."

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online


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