Broker Oak Securities has set a price target of 33.7p for Blencowe Resources (BRES), which is developing the Orom-Cross graphite project in Uganda.
Oak notes that Orom-Cross is slated to go into production before the first quarter of 2027, based of a 23 million tonne reserve and a 26 million tonne resource.
However, recent drilling undertaken on the newly discovered Beehive and Iyan deposits has the potential to double the JORC resource once incorporated into another upgrade early this year.
Even more significantly, Blencowe’s 2025 definitive feasibility study showed a post-tax net present value of US$1.087 billion for Orom-Cross.
The post-tax internal rate of return was set at 96%, based on a weighted average selling price of US$1,240 per tonne of graphite.
Oak reckons the mine life at Orom-Cross at an initial 15 years, but given that the resource base comes from just two percent of the license area, it will likely extend far beyond this.
Blencowe plans to build the mine in staged developments over five phases, which will see production increase from initial levels of 20,000 tonnes of concentrate to 175,000 tonnes in five-six years.
This staged approach allows the company to de-risk the initial capital cost exposure by keeping it low, at US$40 million, then increasing the capital expense once the mine is operational and cash flow is being generated.
Blencowe has already signed a series of non-binding Agreements for the offtake of a natural graphite concentrate for its initial production quantity, demonstrating the saleability of its potential products.
The company is well funded, having raised £3.0 million in early December and an additional £1.4 million from the exercise of warrants since 1 October 2025. In the company’s recent prospectus dated 25 November, it reported net cash of £1.1 million.
“Fourteen leading graphite development companies are currently trading on an average of 14.8% of their projects' NPV, ranging from 2.8% to 64.5%,” says the Oak analysis.
“Applying the average of the peer group to the NPV of Orom-Cross, US$1.087 billion, we arrive at a valuation of US$161 million or 33.7p per share in issue, for Blencowe, an upside of 362% or 4.6 times the current share price.
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A bullish assessment from Oak, which has also been instrumental in raising funds for Blencowe. The broker notes that various funding options for the development of Orom-Cross are under consideration, and argues that phase 1 will be developed via “non-Blencowe PLC equity structures.” Blencowe’s shares have increased by around 75% over the past year or so, but it looks like there could be much more to come.