LSE-listed Blencowe Resources has signed a memorandum of understanding (MoU) with Singaporean graphite sales and marketing specialist Triessence and an Asian spheronised purified graphite (SPG) and anode material producer.

Under the terms of the MoU, the parties plan to create a joint venture (JV) to establish a graphite beneficiation facility, in Uganda, where Blencowe's Orom-Cross project is located.

The proposed facility will produce 99.95% purified graphite for use in the manufacture of lithium-ion batteries.

Blencowe and Triessence will each hold a 50% stake in in the SPG facility, with the Asian SPG producer providing operational expertise. Triessence will fund 50% of capital costs for the SPG facility and will buy all end product, ensuring consistent revenue and premium pricing for some of the first 99.95% SPG produced outside of China.

"Blencowe has long recognised the substantial advantages downstream upgrading of graphite in-country can offer and securing experienced partners who have the expertise to help us deliver successful SPG production was essential.  I am delighted to say that this MoU is another significant milestone in enhancing both the value and distinctiveness for our company.

"Our JV team will now focus on the SPG facility feasibility study and integrating it with the Orom-Cross definitive feasibility study, providing a comprehensive solution that adds considerable value.  We anticipate minimal additional costs for this study as we are using our partners' existing vast experience for all costings and design work, and no further bulk sample testing or further resource drilling is needed," says Blencowe chairperson Cameron Pearce.

Blencowe, which will retain full ownership of the Oron-Cross mine, points out that, by channelling small flake concentrate produced at the mine into the nearby JV-owned SPG facility, will help the company avoid pricing pressures that other graphite peers will face selling their concentrate into competitive Asian markets. 

This will secure both sales volumes and favourable market pricing for Orom-Cross, it says.

With a 50% stake in the SPG facility, Blencowe will further benefit from selling uncoated 99.95% SPG at a higher price of about $2 000/t, compared with the about $500/t for 96% concentrate.

Proximity to the SPG facility will also materially lower Orom-Cross' current logistics and operating costs, enhancing overall project economics.