Broker Cavendish has set a 47.9p price target for Blencowe Resources (BRES ), following the appointment of chief operating officer Iain Wearing to the post of interim chief executive.
Wearing played a key role in helping Blencowe complete a definitive feasibility study on its Orom-Cross graphite project in Uganda.
“We regard Mr Wearing as a ‘safe pair of hands’, with this non-board appointment providing continuity across the 100%-owned Orom-Cross project’s technical, operational and funding workstreams while the board searches for a permanent CEO”, said Cavendish in a flash note following the announcement.
“Mr Wearing has led the technical and operational development of the project through the definitive feasibility study process and has personally invested c£0.5 million of his own cash in Blencowe and the development of Orom-Cross. The recent updated DFS estimated capex for Orom-Cross’s Phase 1 at US$45 million. Following recent exercises of warrants and options, with no major work programmes planned, Blencowe considers its current cash position sufficient to finance its corporate overheads, ongoing product qualification and the P1 funding process. The immediate priority remains to secure project-level funding for P1. To this end, discussions and due diligence are progressing across several strategic, institutional and development-finance counterparties. Blencowe’s local Uganda team recently met President Museveni, with the company continuing to engage constructively with the Ugandan government on the development of Orom-Cross, local value addition and potential financing or other government support.”
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Cavendish’s target is a reminder that there is much upside on offer at Blencowe as financing talks advance. The shares moved up by just over 8% on news of Wearing’s temporary replacement to 6p. That’s still a country mile away from what Cavendish thinks Blencowe is worth. So, much food for thought for investors as we look ahead into the fourth quarter.