Jangada Mines increases shareholding in Blencowe Resources to 9.5%

LONDON, UK: Jangada Mines plc it has increased its shareholding in London-listed Blencowe Resources by 15.25 million ordinary shares through an investment of £610,000 into Blencowe.

The subscription was made as part of a broader £750,000 placing by Blencowe at a price of 4p per ordinary share with an attaching half warrant per ordinary share with an exercise price of 8p and a 3-year life.

Following the closing of the Transaction, the Company will have a holding of 18,750,000 ordinary shares in Blencowe, representing approximately 9.5% of Blencowe’s enlarged outstanding issued share capital.

Blencowe’s principal asset is the 100% owned Orom-Cross graphite project in Uganda (the “Project”). The Project has established a JORC resource of 24.5Mt @ 6.0% TCG based on drilling undertaken on less than 5% of the Project area, part of which already benefits from a 21-year mining licence. On 19 July 2022, the company released a Pre-Feasibility Study (“PFS”) on the Project, which provided a Net Present Value of US$482m, based on the existing 14-year mine life.

The PFS also outlined capex to first production of US$62m, average EBITDA of US$100m per annum and a return of US$1.1bn in free cash over the 14-year life. Blencowe recently confirmed it has received an approach from a potential strategic partner in China and will look to deliver bulk samples for further testing ahead of potentially entering into an agreement that could provide the funding solution for Orom-Cross. Work on a Definitive Feasibility Study is currently underway.

For the year ended 30 September 2021, Blencowe reported nil revenue and a loss before tax of £694,726. As at 31 March 2022, Blencowe reported gross assets of £7,032,220.

Brian McMaster, Executive Chairman of Jangada, commented: “I am pleased to have increased Jangada’s ownership in Blencowe Resources to 9.5% through this £610,000 investment. The purchase price of 4p per ordinary share values Blencowe at £7.1m, or approximately US$8m, prior to its capital raise. This valuation is some 60 times lower than the Net Present Value valuation of US$482M ascribed to Blencowe’s Orom-Cross graphite project by the independent third party PFS released earlier this year. I believe the purchase has the potential to be a highly accretive investment for Jangada and its shareholders.

“The demand for graphite is expected to see a dramatic uptick over the coming years with significant supply deficits forecast from 2025 onwards, as the roll out of electric vehicles accelerates and a number of the planned 300 battery megafactories come online. To date, graphite is yet to witness the price movements of other battery metals such as lithium and nickel, despite being the largest component within the anode of lithium-ion batteries. Accordingly, we see further upside potential to the already very attractive margins at Orom-Cross.

“Given the not unsubstantial cash resources currently held by Jangada following the disposal of the Pedra Branca asset to ValOre, we believe now is the ideal time to increase Jangada’s exposure to Blencowe, and graphite, as part of our broader focus on battery metals, which includes our vanadium assets in Brazil.”