UK-based mineral exploration and development company Blencowe Resources has reached 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.
Chinese company Jilin is close to completing a 600t bulk sample processing programme.
Once completed, the 600t bulk sample will generate commercial-scale graphite concentrate divided into large and small flakes.
A Chinese spheronised purified graphite (SPG) producer will then upgrade the small flake concentrate, which will be later distributed OEMs for their own testing.
The process will be completed in the third quarter of 2024, facilitating qualification of Orom-Cross small flake products with tier-one offtakers and paving the way for offtake agreements.
Blencowe has accelerated the tiny flake qualifying procedure that leads to offtake agreements, which typically takes many years. Compared with other graphite companies, Blencowe is said to have completed in quick time.
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By GlobalData
The MOU with Jilin is the first of several offtake agreements anticipated to complete in the near future.
A pre-feasibility study (PFS) is expected to enable Orom-Cross to initially deliver 50,000tpa of concentrate after the start of full mining operations.
Around 45% of this will be delivered as large flake products, which means the company will have up to 22,500tpa of large flake capacity to sell.
The Jilin MOU encompasses two-thirds of the company’s proposed steady state production of large flake graphite products within the first three years.
Going forward, it is expected that the overall production volume could ramp up substantially.
The 15,000tpa to Jilin represents nearly 50% of the anticipated initial total revenue from Orom-Cross, underscoring the MOU’s significance in the context of future project financing and returns.
Blencowe noted that it is currently in talks with multiple OEMs in China and South Korea regarding the sale of its remaining large flake products and smaller flake products utilised in batteries.
It added that the company anticipates further MOUs with buyers of graphite products worldwide with the aim of securing offtake partners for the entire production output from Orom-Cross.
Blencowe Resources executive chairman Cameron Pearce said: “This MOU is a key milestone for the company and it is just the beginning. We anticipate announcing several more agreements over the next few months. Jilin is a leading graphite company globally and this is a strong endorsement of the graphite product from Orom-Cross.
“The 600t bulk testing programme will allow us to provide concentrate to qualify our small flake products through a rigorous qualification process so that we can progress offtake discussions with other tier-one consumers of graphite.
“We have been able to fast-track what is typically a lengthy process and look forward to completing this qualification process shortly by delivering the relevant concentrate and SPG to these groups.”
