Blencowe Resources has secured (via option to purchase) a preferred site for the downstream processing operations associated with its 100%-owned Orom-Cross flake graphite project in Uganda. Located c35km north of Gulu, the 100-acre site provides direct access to low-cost hydro-linked grid power, a permanent water source and sufficient space to accommodate future expansions as Orom-Cross and downstream capacity ramp-up in tandem.

Orom-Cross combines a large, scalable resource base with favourable orebody characteristics and metallurgy, a flake size distribution skewed towards higher-value larger flakes, good infrastructure (eg low-cost hydropower) and strong ESG credentials. The project is positioned to benefit from an ongoing structural shift in global graphite markets. Western OEMs and governments are intensifying efforts to reduce reliance on China for critical minerals and we understand they are prepared to pay premium prices for reliable long-term supply of high quality ex-China graphite as a result.

In our view, Blencowe is well differentiated versus peers that remain heavily exposed to commoditised small-flake concentrate markets. We reiterate our SOTP-based target price of 47.9p (representing 539% upside) and Buy recommendation.

Full note here