Akelikongo Nickel Project Update

Date: 06 September 2022                                   Blencowe Resources Plc

("Blencowe" or the "Company")

Blencowe relinquishes Akelikongo Nickel Project to focus on Orom-Cross

Blencowe Resources Plc ("Blencowe Resources" or the "Company") (LSE: BRES) announces that is has terminated its agreement with SIPA Resources ("SIPA") with respect to the Akelikongo nickel project.

The decision by Blencowe to terminate the agreement means it is no longer required to issue US$350,000 of shares  to SIPA as part of the consideration following the completion of Stage 1.  It also means that the US$500,000 spend obligation by February 2023, for Stage 2, is no longer required.

The decision to relinquish its exposure to the Akelikongo project has been driven primarily by the truly exceptional results from the Pre-Feasibility Study (PFS) on the Company's flagship Orom-Cross graphite project, which yielded a post-tax NPV8 of US$482M and an IRR 49% (for more information please see 19 July 2022 RNS). Accordingly, the Company believes it is in the best interests of its shareholders to focus all of its attention and resources on unlocking the inherent value at Orom-Cross.

Blencowe has targeted bringing Orom-Cross into initial production before the end of 2023, in order to commence the pre-qualification process of selling end product as concentrate into offtake parties.  Given the disconnect between plc market valuation (US$5M market cap) and the value of the Orom-Cross Project (NPV US$482M) the Company is focused on completing an asset-level transaction to fund the project through development and into production. Further updates will be provided as and when appropriate.

Cameron Pearce, Executive Chairman commented;

"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. Whilst 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, whilst removing any unnecessary plc dilution at this depressed level. 

We do still see the synergistic benefits of another battery metal project near to Orom-Cross and we may revisit a nickel strategy in the 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 US$482M NPV 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."

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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 and Blencowe is moving into the studies phase shortly 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.