Blencowe Resources (BRES) has conditionally raised £290,000 through the issue of 7.25 million shares at 4p.
The placing was undertaken by Tavira Financial Limited, and was limited to two existing investors, including the company's largest shareholder, RAB Capital Ltd.
The net proceeds of the capital raise will be applied to settle in full a legacy capital gains tax charge of approximately £342,751.
This legacy capital gains tax of £342,751 was to be paid by the prior owners of Consolidated African Resources Uganda during the time of the sale of CARU to Blencowe in 2019.
This capital gains tax liability was recognised in Blencowe's audited annual report in 2023 and 2024, and it was noted "Following an inspection by the Ugandan tax authorities of the tax affairs of CARU covering the period between January 2014 and December 2022, the group has incurred a capital gains tax charge of £392,425. This related to the acquisition by the company of CARU in 2019. The amount was chargeable to the former owners; however, this was not settled by them and under Ugandan legislation the liability is reclaimable from the acquirer if it cannot be obtained from the seller."
The company has now decided to settle the legacy tax so that it can remove any hurdles to discussions with project financiers.
As part of the placing, Investors will be issued one warrant for each placing share, resulting in the issue of 7.25 million warrants, exercisable at 5p and valid for two years from the date of admission.
Tavira also gets warrants at 4p.
"It is very pleasing to see continued support from our shareholders, particularly RAB Capital, in this small capital raise, which addresses a long-standing legacy tax matter that we inherited from the acquisition in 2019,” said Blencowe’s executive chairman Cameron Pearce.
“We now have a clean balance sheet and have removed a hurdle with respect to project financing discussions. It also underlines our commitment to good governance and to meeting our obligations in-country, where we have maintained excellent relationship with the Ugandan authorities. With this liability settled, we can remain fully focused on advancing value-accretive workstreams. Our recently completed drilling campaign exceeded expectations, and we look forward to releasing the first in a series of assay results shortly. These will feed into what we anticipate will be a material JORC upgrade.”
View from Vox
This was a tidying up exercise that leaves Blencowe in a stronger position when it comes to next steps at Orom-Cross. The big news will be the drill results, the upcoming resource upgrade, and the definitive feasibility study. There’s already plenty of interest globally in the Orom-Cross product.