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Blencowe Resources Finalizes Graphite Offtake Agreement with Jilin
Blencowe Resources Finalizes Graphite Offtake Agreement with Jilin

Blencowe Resources Finalizes Graphite Offtake Agreement with Jilin

  • 11-Jun-2024 7:00 PM
  • Journalist: Bob Duffler

Blencowe Resources, a UK-based mineral exploration and development company, has entered a non-binding memorandum of understanding (MOU) with Jilin New Technology Graphite to supply natural large flake concentrate from its Orom-Cross Graphite Project in Uganda. Jilin, a Chinese company, is nearing the completion of a 600-ton bulk sample processing program. Once finalized, this program will yield commercial-scale graphite concentrate, consisting of both large and small flakes.

Subsequently, a Chinese spheronised purified graphite (SPG) producer will enhance the small flake concentrate, which will then be distributed to original equipment manufacturers (OEMs) for testing purposes Scheduled for completion in the third quarter of 2024, this process will streamline the qualification of Orom-Cross small flake products with tier-one offtakers and pave the way for forming offtake agreements.

Blencowe has expedited the qualification process for small flake products, a procedure that traditionally takes many years for other graphite companies to complete. Compared to its counterparts, Blencowe's progress has been notably swift. The MOU with Jilin marks the first of several anticipated offtake agreements set to be finalized in the near future.

A pre-feasibility study (PFS) is expected to enable Orom-Cross to initially produce 50,000 tons per annum (tpa) of concentrate upon the commencement of full mining operations. Approximately 45% of this output will be in the form of large flake products, providing the company with a capacity of up to 22,500 tpa of large flake products for sale. The Jilin MOU encompasses two-thirds of the company’s proposed steady-state production of large flake graphite products within the first three years.

Looking ahead, there is potential for a substantial increase in production volume. The 15,000 tpa supply to Jilin represents nearly 50% of the expected initial total revenue from Orom-Cross, underscoring the significance of the MOU in the context of future project financing and returns.

Blencowe is currently engaged in discussions with multiple OEMs in China and South Korea regarding the sale of its remaining large flake products and smaller flake products used in batteries. The company anticipates entering further MOUs with graphite product buyers worldwide to secure offtake partners for the entire production output from Orom-Cross.

Cameron Pearce, Executive Chairman of Blencowe Resources, commented, “This MOU marks a significant milestone for the company, signaling the start of what promises to be a series of agreements in the coming months. Jilin's stature as a prominent global graphite company serves as a robust endorsement of the graphite product originating from Orom-Cross."

" The 600-ton bulk testing program will allow us to supply concentrate for the qualification process of our small flake products, thereby progressing discussions with other top-tier consumers of graphite regarding offtake arrangements. We have been able to streamline what is typically a lengthy process and anticipate completing this qualification shortly by delivering the relevant concentrate and SPG to these groups.”

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