Acquisition represents a very exciting opportunity for Blencowe to add a highly prospective nickel sulphide project to its existing world class Orom-Cross graphite project in Uganda
Blencowe acquires nickel sulphide project in Uganda. (Credit: Alex Banner from Pixabay)
Blencowe Resources Plc (LSE: BRES) is pleased to announce the addition of a highly prospective nickel sulphide and copper project (“Akelikongo” or the “Project”) to complement its existing high-grade graphite project in Uganda.
This Project underlines Blencowe’s ambition to become a diversified producer of high-quality source materials for the battery metals industry into the future, mining these within a safe jurisdiction from which to successfully develop long term resource assets.
Nickel is another critical input within the lithium-ion (“Li-ion”) battery, being an essential metal within the cathode. The most common Li-ion batteries are a Nickel Cobalt Aluminium (NCA) which uses ~80% nickel, and the Nickel Manganese Cobalt (NMC) which uses ~33% nickel (however newer formulations of the NMC are using up to ~80% nickel). A single Tesla battery uses approximately 30kgs of battery grade nickel in addition to 50kgs of graphite.
Although both oxide and sulphide ores can be converted into class 1 nickel for use in batteries, processing of sulphide ores, as found at Akelikongo, is technologically much easier and cheaper. Nickel laterites (oxides) are the more dominant ore type in most recent major nickel discoveries and sulphides are much rarer. Processing nickel laterite ore into battery grade nickel sulphate can be achieved using a high-pressure acid leach process (“HPAC”) but the economic feasibility of this remains questionable, as aside from high operating costs it comes with environmental concerns. This makes nickel sulphide deposits increasingly more valuable ahead.
Cameron Pearce, Blencowe’s Executive Chairman commented;
“Akelikongo represents a very exciting and low cost entry for Blencowe to add a highly prospective nickel sulphide project to our existing advanced graphite project at Orom Cross. Nickel is one of the most sought after metals at the moment and demand is set to soar even higher over the next decade.
The structure of the transaction means we are acquiring a nickel discovery with historic spend of US$15 million for just $1.5 million in deferred share consideration, instead ensuring our cash is deployed in advancing the asset and unlocking incremental value.
We believe graphite and nickel have many synergies at a higher level as both are key Li-ion battery metals and both will be in significant demand by battery producers for electric vehicles (“EVs”) moving forward, hence the opportunity to develop two such projects in tandem is very appealing. Furthermore, we can see a number of synergies at the operational level based on the two projects being located near to one another.”
He added “The EV market is continuing its rapid expansion and we are seeing huge investments being made by substantial companies at various different levels within the full EV product cycle as they move to gain lost ground on the market leaders. We have seen significant prices rise in all battery metals in 2021 and this is forecast to continue ahead. We are also seeing a philosophical trend towards less reliance on China as the dominant source of most EV components, and a paradigm shift where manufacturers are prepared to offer incentives to move further up the supply chain to secure critical offtake.
All this bodes well for Blencowe as we continue to position ourselves ahead as a major supplier of key battery metals”.
Source: Company Press Release