Blencowe Resources (BRES ) has received positive results from metallurgical test work currently underway in regard to its Orom-Cross graphite project in Northern Uganda.
The group said the ongoing metallurgical test work program is currently nearing completion at graphite specialist SGS Lakefield in Canada. To date, the work has gone according to plan with results confirming ‘the exceptional nature of the end product quality.’
This is considered critical to the project as a high-quality end product provides the basis for more significant offtake interest as well as overall better pricing in the market, it said.
While work to date previously completed during in stage one last year delivered a 94% total graphitic carbon (“TGC”) concentrate with modest recoveries, stage two results at SGS Lakefield have confirmed the potential to achieve a concentrate grade between 95-96% TGC with low impurities and high recoveries, from both the Northern Syncline and Camp lodes.
Additionally, the company said the higher grade and recoveries have not impacted the recovery of the large to jumbo flakes and a revised approach to the processing methodology has enabled these higher value larger flake sizes to be mostly preserved in the upgrading.
Blencowe highlighted that the process to deliver this concentrate is similar to other graphite projects and that the ‘relatively simple design circuit lends additional credence to the proposed Blencowe approach of a modularised plant that is easily expandable,’ it noted.
It explained that this would allow for a more modest start-up position to ensure lower risk via a lower capital requirement for initial production but would allow for a quick ramp up process at any stage thereafter if market demand increases as forecast and requires higher production levels of graphite concentrate.
Blencowe and SGS Lakefield will continue to build on these results to achieve the optimal outcomes as final stages of test work nears completion while thereafter, further test work will commence on the quality of a sphericalised product from the smaller fines, Blencowe noted.
Specifically, Blencowe explained that the high quality sphericalised graphite is used within the anode for lithium-ion batteries where supply is forecast to be in a significant deficit to demand ahead as the electric vehicle (EV) expansion gathers pace over the next decade.
"We entered this metallurgical test work with the goal of achieving best possible results for each of the four critical items under review, namely delivery of a high-grade concentrate with low impurities, high recoveries, and the preservation of large flakes.
To achieve all of these together in an end product would be a stellar result as it would put Orom-Cross right up there with the better graphite projects worldwide. We are working through each part of this exercise and the results to date are positive and we are very encouraged with the test work results,” said Executive Chairman, Cameron Pearce.
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In a recent research note, analysts at independent broking firm First Equity highlighted that results from Blencowe’s metallurgical test work should tell us if the Orom-Cross project is suitable for producing spherical graphite which are used in electric vehicle batteries.
Today’s news comes weeks after Blencowe Resources announced its maiden JORC resource at Orom-Cross, which was around double the management’s expectation of 8 to 10m tonnes.
Earlier this month, Blencowe Resources initiated the second stage of its diamond drilling program at the Orom-Cross Graphite Project which involved drilling 2,200m, or 74 holes.
Analysts say that both drilling news in the coming months from its stage two programme, along with today’s results could provide the catalysts for the market to reprice the shares.
Phase two drilling is underway to upgrade the JORC Standard resource estimate already achieved in parallel to metallurgical test work underway to deliver a high-grade end product. Both are expected to move the project into the feasibility study stage over the next 6-12 months.
Shares in Blencowe Resources have gained over 5% in value since the beginning of 2021. The stock was trading 10.00% higher this morning at 6.875p following the announcement.
Reasons to BRES
Blencowe is a mineral resources company focused on fast-tracking its 100% owned Orom Cross Jumbo Graphite Project in Uganda to production. Orom Cross is an advanced exploration stage project which was awarded a 21-year mining licence in October 2019.
The development company which is currently focused on bringing the Orom-Cross graphite project into production, completed its 69-hole (1,950m) diamond drill programme into the Eastern Limb Lode and the High-Grade Camp Lode in September 2020.
The size and scale from exploration work that has already been completed in the licence area has clearly demonstrated that Orom Cross has the potential ‘to become one of the largest graphite projects in the world based on both size and the quality of the end product.’
Blencowe is fast tracking the project through to defining a maiden JORC-compliant resource, completing further metallurgical test work with a plan to deliver a Preliminary Economic Assessment (PEA) in Q1 2021 followed shortly after by a Pre- Feasibility Study (PFS).
Align Research describes Graphite as ‘an important battery metal’ since it represents around 50% of Li-ion batteries by mass, which uses the smaller sized flakes. In recent years there have been some racy growth rates suggested for graphite demand for lithium ion batteries.
Meanwhile, the group said demand for electric vehicles (EV) is rising on the back of green legislation being adopted by the UK, India, Germany, France, Norway and China, which is expected to lead to an increasing demand for Li-ion batteries and in turn for graphite.
Another integral factor is that Uganda’s economy is believed to hold ‘great potential’ with this whole region of East Africa viewed as a key African growth platform by the World Bank, hosting significant natural resources including copper, cobalt, gold, nickel and platinum.
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