UK-based Blencowe Resources has signed an agreement with the US International Development Finance Corporation (DFC) to provide $5-million in funding through a technical assistant grant for the definitive feasibility study (DFS) programme on the Orom-Cross project, in Uganda.
An upfront contribution of $1-million, or 20% of the full amount, will be paid immediately, with the remainder of payments to follow certain feasibility milestones being achieved.
DFC is geared to provide funding assistance for Orom-Cross as part of the US government’s strategic drive to secure a reliable supply chain of critical minerals and metals, within its wider $1-trillion Biden-renewables strategy.
As part of the agreement, DFC has a right of first refusal on commercial terms to arrange project financing for the Orom-Cross project.
The DFC partnership opens up the opportunity for Blencowe to consider a larger scale project with potentially greater returns with the DFS, which will have a material impact on the overall project value ahead.
“To the best of our knowledge there has been no other graphite project worldwide that has received a similar type of grant to date from the DFC. We believe that having DFC as a strategic project partner substantially de-risks Orom-Cross and provides us with the means to deliver a world class project from here,” says executive chairperson Cameron Pearce.
He adds that Blencowe presented an excellent net present value of $482-million for Orom-Cross in the prefeasibility study last year, however, the company is confident that
it can deliver an even greater value within the DFS as project horizons can be expanded.
Orom-Cross contains an estimated two-billion to three-billion tonnes of graphite and is one of the largest high quality deposits globally.
With the support of the DFC, Blencowe can address one of the major challenges and risks to any mining operation, being the clear pathway to fund the project into production. It now has the opportunity to build Orom-Cross with the comfort of having a partner with the means to deliver this.
Graphite demand continues to increase, as it is one of the underrated but key components of lithium-ion batteries.
“Any future anticipated surge in demand for these batteries, not just for electric vehicles but for energy storage in all other renewable capacities, will continue to accelerate demand for graphite.
“We now have the means to deliver one of the leading graphite projects in the world and a highly incentivised tier one partner with whom we will work with to do that.”