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Blencowe Resources cuts exposure to Akelikongo nickel project to focus on its flagship Orom-Cross graphite project

Stock Markets Sep 06, 2022 08:12
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© Reuters. Blencowe Resources cuts exposure to Akelikongo nickel project to focus on its flagship Orom-Cross graphite project
 
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Blencowe Resources Plc (LON:BRESB) said it terminated its agreement with Sipa Resources (ASX:SRI) relating to the Akelikongo nickel project so that it can focus on its flagship Orom-Cross graphite project.

Blencowe, which bought the right to earn in to the Akelikongo project in February, said the decision to relinquish its exposure to the project had been driven mainly by the “truly exceptional results” from a pre-feasibility study (PFS) for Orom-Cross, which is located near Akelikongo in Northern Uganda.

"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,” said Blencowe executive chairman Cameron Pearce.

“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.”

Blencowe is seeking to bring Orom-Cross into initial production before the end of 2023 in order to start the pre-qualification process of selling end product as concentrate into offtake parties.

It noted the disconnect between its own market valuation of about US$5mln and the net present value of Orom-Cross of US$482mln and said it is focused on completing an “asset-level transaction” to fund the project through development and into production.

Blencowe said it is now seeing heightened interest from industry and private equity.

The decision to terminate the agreement with SIPA means that Blencowe 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 is also no longer required to spend US$500,000 by February 2023 on Stage 2.

Read more on Proactive Investors UK

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Blencowe Resources cuts exposure to Akelikongo nickel project to focus on its flagship Orom-Cross graphite project
 

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