Developing Large-scale Orom-Cross Graphite Project - August 2020
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LSE: BRES
Developing Large-scale
Orom-Cross Graphite
Project
August 2020
1
Disclaimer
This presentation has been prepared by Blencowe Plc (“Blencowe”). This document contains background information about Blencowe current at the date of this presentation. The presentation is in
summary form and does not purport to be all inclusive or complete. Recipients should conduct their own investigations and perform their own analysis in order to satisfy themselves as to the
accuracy and completeness of the information, statements and opinions contained in this presentation.
This presentation is for information purposes only. Neither this presentation nor the information contained in it constitutes an offer, invitation, solicitation or recommendation in relation to the purchase
or sales of shares in any jurisdiction.
This presentation does not constitute investment advice and has been prepared without taking into account the recipient’s investment objectives, financial circumstances or particular needs and the
opinions and recommendations in this presentation are not intended to represent recommendations of particular investments to particular persons. Recipients should seek professional advice when
deciding if an investment is appropriate. All securities involve risks which include (among others) the risk of adverse or unanticipated market, financial or political developments.
To the fullest extent permitted by law, Blencowe, its officers, employees, agents and advisors do not make any representation or warranty, express or implied, as to the currency, accuracy, reliability
or completeness of any information, statements, opinions, estimates, forecasts or other representations contained in this presentation. No responsibility for any errors or omissions from this
presentation arising out of negligence or otherwise are accepted.
This presentation may include forward-looking statements. Forward-looking statements are only predictions and are subject to risks, uncertainties and assumptions which are outside the control of
Blencowe. Actual values, results or events may be materially different to those expressed or implied in this presentation. Given these uncertainties, recipients are cautioned not to place reliance on
forward looking statements. Any forward looking statements in this presentation speak only at the date of issue of this presentation. Subject to any continuing obligations under applicable law,
Blencowe does not undertaken any obligation to update or revise any information or any of the forward looking statements in this presentation or any changes in events, conditions, or circumstances
on which any such forward looking statement is based.
Competent Persons Statement
The geological information in this announcement that relates to Orom Graphite Project is based on information compiled and fairly represented by Mr Oscar Van Antwerpen, who is a Member of the
Geological Society of South Africa and a registered professional scientist at the South African Council of Natural Scientific Professions. Mr Van Antwerpen is employed by Minrom Consulting Pty Ltd
and has sufficient experience relevant to the style of mineralisation and type of deposit under consideration, and to the activity which he has undertaken, to qualify as a Competent Person as defined
in the 2012 Edition of the Joint Ore Reserves Committee (JORC) Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Van Antwerpen consents to the
inclusion in this report of the matters based on this information in the form and context in which it appears.
2
CORPORATE
Corporate Highlights Significant Shareholders %
Ticker BRES.L Orom-Cross Vendor (12-month lock up) 33.9%
New Cash raised (April 2020) £2.0m Board & Management (12-month lock up) 13.7%
Market Cap @ 6p c. £5.9m John Story 13.6%
Enterprise Value £3.9m
Enlarged Issued Share Capital 98,333,326 Approximately 50% of the Company’s issued
shares are locked in for 12 months
Warrants 32,375,001
VWAP of outstanding warrants is approximately
6.5p and would provide a further £2.1M (approx.)
to the Company if all are exercised
3
PROJECT OVERVIEW
Orom-Cross flake graphite project was acquired in April 2020 for £2m; 100% paid
for in shares
Further £2m of equity also raised to fund an extensive work programme in 2020
Orom Project
Orom-Cross was granted a 21-year mining licence in 2019 and has the scope to
become a world class graphite project both by size and by end product quality
(circa 3 billion tonnes)
The project is a shallow open pit deposit, with low strip ratio and free digging,
suggesting very low operating costs
Orom-Cross contains a large component of high value jumbo and large flake
product, which are more scarce and sell at a premium to smaller flakes
Uganda is a stable African country, with a strong mining code, low royalties and a
stable currency, making Orom-Cross attractive long term to potential strategic
investors and offtake partners
Strong management team to deliver project with significant African / mining
experience
4
KEY MILESTONES
Completed within first three
months
Underway
2021
5
OROM-CROSS WORK PROGRAMME
21 year Mining licence awarded in 2019 – key risk removed
o Land compensation agreement signed with locals and full pre-mining payment made
Historical exploration work completed (2012 – 2019):
o 1,078kms of VTEM (airborne magnetic survey)
o Numerous anomalies tested and proven giving confidence to overall numbers
o 600m diamond drilling
o 4,200m trenching programme
1,950m (69 hole) diamond drilling programme recently completed to provide;
o 8-10Mt JORC Indicated Resource for PFS
o Delivers enough graphite for first ~10 years life of mine.
o Resource will represent < 1% of overall deposit
o Size and scale = ability to ramp up production at any time as market conditions dictate.
74% Orom-Cross graphite in Jumbo/XL/Large categories.
Larger flake size = better prices and likely higher demand.
Phase 2 metallurgical test work underway targeting:
o 96-97% TGC (total graphite content) with low impurities (thorium, vanadium)
o ~80% recoveries
o Majority Jumbo/XL/Large flakes within concentrate
6
USE OF FUNDS (FROM IPO)
Project £ % Funds
Drilling (JORC Indicated Resource) & Phase 2 metallurgical test work 900,000 45
Tenement costs and compensation (mining license) 200,000 10
Scoping/Pre-Feasibility Study 300,000 15
Corporate
IPO related transaction costs 350,000 17.5
G&A (including board fees) 250,000 12.5
Total 2,000,000 100
Exercising 4p-6p Warrants can deliver £0.63m of additional funds
Exercising 8p Warrants can deliver circa £1.5m of additional funds
7
SHIFTING DEMAND FOR FLAKE GRAPHITE
2020 : graphite required for EVs = 27% world demand 2025 : graphite for EVs = forecast 58% world demand
Other Uses – 30,000 Other Uses – 50,000
TOTAL TOTAL
Electric Vehicles – Steel Mills / Expandables –
270,000 ~1Mtpa World ~2Mtpa World
800,000
Demand Demand
4X growth requirement for
flake graphite over next 5
years forecast for EVs
Electric Vehicles –
Steel Mills / Expandables – 1,150,000
700,000
Flake graphite demand forecast to double with almost
all attributable to EV growth (Li-ion batteries)
Source - Benchmark Minerals Intelligence (2019)
8GLOBAL GRAPHITE MARKET
Total flake graphite market size is currently ~1,000,000 T p.a.
o Growth in graphite demand for EVs forecast 20% per annum
o Growth in graphite demand for other uses forecast 5% per annum
Goldman Sachs forecasts 25% of all car sales to be electric vehicles (EVs) by 2025.
World Graphite Market forecast demand to double to 2,000,000 T p.a. over next 5 years
o 1,000,000 T pa new product required for world markets
o Graphite market estimated in 600,000 T p.a. net deficit by 2025
No major (>200,000 T p.a.) new graphite producer forecast coming online in next 5 years;
o Market defined by smaller producers in higher risk locations;
o Syrah Resources (largest producer worldwide) cut back production to 60,000 T pa in 2019 due to operational cost blow-outs and lower
prices
o No forward market to sell graphite into restricts debt funding for new projects
o Higher risk locations will inevitably restrict other new project startups (60% flake graphite forecast to be produced from high risk
locations such as Mozambique, Madagascar and Tanzania).
Opportunity exists for a large-scale producer from 2024 in a safe location that may be considered for supply chain diversification
9GRAPHITE SUPPLY DEFICIT BY 2025
Timing for likely first production at
Orom-Cross coincides with
emerging shortfall of flake graphite
forecast by BMI.
Source – Benchmark Minerals Intelligence 20 year demand-supply forecast (July 2019)
10JORC RESOURCE DRILL PROGRAM
56 holes in zone A
ML 1959 –
21 year mining
license
13 holes in high
grade zone B
• Target 8Mt JORC Indicated Resource for first 10 years’ Mine Life, from drilling outPEER COMPARISONS
Pathway to delivering Value 36 months ahead of Blencowe
Completed
Definitive Feasibility Study
Offtake Partners
18 months ahead of Blencowe Project Funding
Completed Completed
JORC Resource drilling JORC Resource drilling
Scoping and Pre-Feasibility Scoping and Pre-Feasibility
Studies Studies
2-3Bn tonnes deposit 2-3Bn tonnes deposit 2-3Bn tonnes deposit
Market Market Market
Shallow – low cost operations Shallow – low cost operations Shallow – low cost operations
Cap Cap Cap
Mainly Jumbo-Large flake Mainly Jumbo-Large flake Mainly Jumbo-Large flake
£6m £30-50m £30-50m
Uganda Malawi Tanzania
Blencowe Resources Sovereign Metals Walkabout Resources
(LSE:BRES) (ASX:SVM) (ASX:WKT)
Blencowe will complete its JORC Resource drilling and Phase 2 metallurgical test work by end 2020 – thereafter moving immediately to
Feasibility Study Stage in 2021
12MARKET PRICES (A PRIL 2020)
Mesh Size 2020 2020
CIF China CIF China
USD USD
95% TGC 97% TGC
Jumbo +32 1,850 2,200
Blencowe is targeting 50% of Jumbo and X-Large flakes
X-Large +48 1,400 1,750 at 95-97% TGC
Large +80 880 1,100
Medium +100 730 875
Small - 100 600 725
CIF China prices typically 10% lower than CIF Europe
Approximately 10% higher prices for every 1% greater purity of concentrate above 94%
Orom-Cross targeting a weighted average price circa usd1,000 / T for all products sold
Orom-Cross targeting a total operating cost (Mombasa port) usd3,00 / T
Source: Benchmark Minerals Intelligence / Blencowe – March 2020
13BOARD & MANAGEMENT
Cameron Pearce – Chairman
Mr Pearce is a Chartered Accountant with extensive professional experience in the finance sector in Australia and the UK. His particular focus and experience is in the setup, listing and
development stage of public companies, specifically in the junior resources market, and he has been instrumental in raising capital for various listed companies over the past decade. Mr
Pearce has had previous experience managing the transitionary stage of several UK-listed companies, including most recently Emmerson Plc.
Mike Ralston – CEO
Mr Ralston is a Chartered Accountant with 25 years’ experience successfully developing businesses worldwide, including in Africa. He has been a senior executive and board member for
several junior listed resource companies over the past 15 years and he has raised ~A$300m in debt and equity over that period. He brings a wealth of corporate and management experience
and he has been involved in developing at least three mining companies from start-up through to production. Mr Ralston was previously MD Balamara Resources Ltd (2011-2017), which
developed two large scale coal projects in Poland, and before that CFO Kangaroo Resources Ltd, which developed several coal projects in Indonesia into production, before trade sale to a
major Indonesian coal producer for ~A$600m in 2010. Mr Ralston is the founder and Non-Executive Chairman of ASX-listed Trigg Mining Limited.
Alex Passmore – Director
Mr Passmore is a geologist with significant technical experience developing early stage mining projects worldwide. He has been involved in a number of junior resource companies, working
in both technical and corporate positions. He brings a range of knowledge in the battery metals sector having been a Director of Cobalt One Ltd, which merged with First Cobalt in 2017 to
form the largest Canadian cobalt exploration company. Mr Passmore is currently Managing Director of ASX-listed Rox Resources, a gold exploration company in Australia.
Sam Quinn - Director
Mr Quinn is an experienced corporate lawyer based in UK who focusses primarily on the setup and development of junior resource companies. He has been involved in several junior listed
exploration companies in UK over the past decade, with emphasis on legal, administrative, corporate and strategic advice and capital raising. Mr Quinn is currently a Non-Executive director of
Red Rock Resources Plc.
14KEY MANAGEMENT & ADVISORS
Iain Wearing – COO
Mr Wearing is a Mining Engineer with 30 years experience in the resource industry, including significant project
experience in Africa. He has been involved in the technical management of African projects for several companies,
including Resolute Mining and Barrick Gold, and he has managed studies for several major projects including the Kibali
Gold Project for Moto Gold, Syama Project in Mali, and Golden Pride in Tanzania.
Iain brings a wealth of technical expertise to the team. His knowledge in Study management, operations planning and
costing, as well as operations management, will be critical to Orom moving forward as Blencowe moves towards first
production.
Oscar Van Antwerpen - Technical
Mr Van Antwerpen is a geologist and a Member of the Geological Society of South Africa and a registered professional
scientist at the South African Council of Natural Scientific Professions . He is the founder and Managing Director of
Minrom Consulting (South Africa), which is a specialist service provider to resource companies working assets within
the African continent.
Minrom has been the technical advisor to CRA on Orom-Cross Project for the majority of the exploration work
conducted there over the past five years. Mr Van Antwerpen is a resource expert within the African market and he has
advised successful international mining companies such as BHP Billiton, Goldfields, Samancor, and DRA International.
Mr Van Antwerpen will remain in a consulting position with Blencowe to ensure that the knowledge gained at Orom over
the past five years is brought forward and utilised. He will be a key part of the planning and execution team going
forward.
15APPENDIX
16APPENDIX 1 – BENCHMARK MINERALS
“Graphite is the number one raw material input into a Li-ion battery”
Reporting from the Prospectors and Developers Association of Canada (PDAC), Benchmark Minerals Intelligence Managing Director,
Simon Moores, reiterates the importance of the battery metal as approximately 50% of Li-ion batteries by mass require graphite.
• Currently, the global market offers 165kpta anode material for existing manufacturing capacity, which needs to rise to 1.8Mtpa by
2030.
• Anode formation relies on synthetic and natural blending, however, the higher cost of synthetic and the difficulty scaling production
will boost the significance of natural sources.
• Simon Moore also emphasises capital market investment is one of the greatest risks to global electrification as sustained funding is
falling short for the “biggest trend in the 21st century, which is energy storage”.
• The rise of battery Megafactories is huge, with 71 currently under development and 45 operating at multi-GWh scales.
• Scaling the supply chain presents huge challenges as speciality markets grow from niche 100ktpa industries to multi-million tonne
scale.
• The trends cumulatively indicate there is a major supply risk across the battery metal space, particularly across the US and Europe
where the four metals (lithium, cobalt, nickel and graphite) are designated critical metals, requiring sustained and significant global
investment to advance capacity.
Simon Moores is a leading authority on lithium ion battery and energy storage supply chains with a specialist focus on lithium, graphite, and cobalt. He is MD of Benchmark Mineral Intelligence, an independent price
assessment and consultancy company for lithium ion battery supply chain
17KEY PRICE DRIVERS OF GRAPHITE
Total Graphitic Phase 1 Orom met. test work
Content (“Purity”) reached 94% TCG – Phase 2
test work targeting 95-97%
of Conc.
Jumbo, XL and Large flake
Price Flake Size size make up significant % of
Orom product based on recent
test work
Less supply worldwide of
Supply Jumbo and X-Large flakes =
less price pressure
consistency Consistent supply from mine
important for offtakers/partners
18OROM PRODUCT – 74% JUMBO / LARGE
TYPICAL APPLICATIONS FOR DIFFERENT GRAPHITE FLAKE SIZES
Jumbo/Large (20 to 80 mesh) Medium (80 to 150 mesh) Small (+150 mesh)
• Gaskets and seals • Basic refractory • Paints and coats
• Flame retardants • Magensia carbon • Pencils
• Thermal sheets • Alumina carbon • Dry and Ni MH batteries
• Fuel cells • Unshaped refractory • Lubrication
• Plugging agents • Flame retardants • Friction materials
• Expandable graphite * • Foundry
• Graphite foils • Composites
• Thermal management • Lithium-ion batteries (for use in EVs)
• Space technology
Generally these are speciality products that
require the highest quality graphite, and for
which a premium is paid.
• Expandable graphite (Jumbo/XL) is one of the fastest growing markets worldwide (~12% p.a.)
- Used in thermal management of consumer electronics and industrial applications, including heat and corrosion resistant gaskets and fire retardants.
- Fuel cell and flow batteries are also new and potentially large markets for expandables due to high release of energy.
- Limited supply of expandable graphite makes it valuable, with associated higher prices and higher demand.
- Whilst China has significant small fines graphite and can offset supply variations internally it does not have much jumbo/X-L flakes and cannot do the same
19EVS – SHIFTING GLOBAL STRATEGY
500k units in 2020, from 200k in 2018 600k unit sales by 2020
500k units in 2020, no ICE engines by 2025 15-25% of fleet by 2025
600k sales by 2020 25% of fleet by 2025, including new USA EV
production
30% of fleet by 2025 2-3 million globally by 2025, including JV with Ford for
EVs in USA
60% of fleet by 2020
50% of fleet sales by 2020
200k unit sales in 2020 80% of models to be electrified by 2025
300k unit sales by 2020, no ICE models by 2025 EV models across all brands, no diesel by 2022
Source - Syrah Resources Presentation 2019
20EVS – SHIFTING GLOBAL STRATEGY
1 million units p.a. by 2020, from 250k in 2017. Almost every major vehicle manufacturer worldwide has an
aggressive EV strategy for the next decade, which will
result in considerably more EV sales and associated Li-ion
battery sales.
150k unit sales in China by 2020 - 500k by 2025.
Natural flake graphite demand will rise in sync.
70% of China sales by 2025, including a JV with VW for
electrified vehicles.
25% of EU sales by 2020.
10 new BEVs in early 2020s.
65% of fleet sales by 2030.
300k unit sales by 2020.
Source - Syrah Resources Presentation 2019
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