Blencowe raises £290 000 to clear inherited Uganda tax, strengthening finances and focusing on advancing its Orom-Cross graphite project toward production.
London-listed Blencowe Resources has announced the conditional raising of £290 000 through the issuance of 7.25 million new ordinary shares. The share placement, managed by Tavira Financial, was targeted exclusively at two existing investors, one of which is the company’s largest shareholder, RAB Capital.
The funds, along with Blencowe’s existing cash reserves, will be directed towards fully settling a legacy capital gains tax liability of approximately £342 751. This liability dates back to 2019, when Blencowe acquired Consolidated African Resources Uganda (CARU). The tax originated from a charge imposed on CARU’s previous owners following the sale of the company.
According to Blencowe’s 2023 and 2024 audited annual reports, the Ugandan tax authorities reviewed CARU’s tax affairs for the period from January 2014 to December 2022. The review resulted in a capital gains tax charge of £392 425. Although the tax was originally the responsibility of CARU’s former owners, Ugandan legislation allows the authorities to recover the amount from the acquiring company if payment cannot be obtained from the seller.
Blencowe has chosen to resolve this long-standing matter to eliminate any obstacles in its ongoing project financing discussions. The company emphasised that settling the issue through a small, targeted capital raise ensures that existing working capital and funds allocated for its definitive feasibility study (DFS) remain dedicated to advancing the Orom-Cross graphite project in Uganda.
As part of the placement terms, each investor will receive one warrant for every placing share purchased. In addition, Tavira will be issued 435 000 broker warrants. If all investor and broker warrants are exercised, the company could raise an additional £362 500 and £17 400 respectively.
Executive chairperson Cameron Pearce expressed satisfaction at the continued backing from shareholders, particularly RAB Capital, in addressing this inherited tax liability. “By resolving this legacy tax issue, we have cleaned our balance sheet and removed a key hurdle to progressing project financing discussions,” he said. Pearce also highlighted that the move demonstrates Blencowe’s commitment to strong governance practices and maintaining positive relations with Ugandan authorities.
Looking ahead, Pearce stated that the company’s focus will remain on value-enhancing activities for the Orom-Cross project. He noted that a recently concluded drilling campaign had exceeded expectations, with the first set of assay results expected soon. These results are anticipated to contribute to a significant Joint Ore Reserves Committee (JORC) upgrade.
Pearce added that with the potential for further offtake agreements, strategic partnerships, and the planned publication of the DFS later this year, Blencowe is well-positioned to maintain momentum toward bringing the Orom-Cross project into production.
