Blencowe Resources

The Calm before the Storm.

Good Morning Team.

With the BRES management at Indaba, I thought I’d take a quick gander at where we are.

Because while the co-investment thesis is playing out exactly as predicted, the geology just got significantly better.

In December, I wrote that Blencowe Resources was essentially hanging a ‘FOR SALE’ sign outside their London offices, with a >$1 billion NPV and Mike preparing for a transatlantic roadshow to New York and Washington.

The thesis was simple: co-investment was coming, the resource would expand in Q1 2026, and strategic partners would start circling a project that could supply battery-grade graphite for 30+ years.

Well, that roadshow happened. The co-investment discussions are progressing.

And now we have bigger news and technical validation.

Remember those 192 step-out holes I mentioned that were sitting in a database, waiting to be integrated? The ones drilled across the new Iyan and Beehive deposits?

They’re not sitting in a database anymore.

They’re coming out of the lab, and they’re exceptional.

Iyan Deposit (Western Extension of Northern Syncline):

The first deep hole at Iyan delivered continuous graphite from 4 metres below surface to ~100 metres depth:

• 18.85m @ 7.01% TGC from 4.0-32.7m

• 29.47m @ 5.34% TGC from 32.7-62.2m

• 10.88m @ 5.10% TGC from 62.2-73.1m

The hole ended in mineralisation, which means the system continues below current drilling limits.

Then the second and third deep holes came back. Same story — continuous thick graphite to ~100m, all ending in mineralisation.

One interval hit 2m @ 13.92% TGC, which is super strong for a bulk-tonnage graphite deposit.

And the shallow drilling programme at Iyan is now delivering exactly what mine planners want to see.

Multiple holes are hitting 30+ metres of continuous mineralisation from surface:

• 31.20m @ 6.84% TGC (including 12.16m @ 10.89%)

• 30.20m @ 7.55% TGC (including 5.0m @ 11.74%)

• 30.27m @ 6.27% TGC (including multiple high-grade zones)

Most of these holes ended in mineralisation at the planned 30m depth, which means there’s clear potential for additional tonnage below.

This is bulk, near-surface, high-grade graphite — exactly the material that delivers low strip ratios, simple open-pit mining, and strong early cash flow.

Beehive Deposit (3km from Northern Syncline):

And then Beehive delivered the result that changes the entire scale discussion.

Hole L238B: 92.55m @ 6.83% TGC from surface to 120.60m

Including:

• 15.89m @ 9.42% TGC

• 8.38m @ 10.95% TGC

This isn’t a narrow high-grade zone in a broader envelope of lower-grade material. This is 92.55 metres of continuous, thick, high-grade graphite starting from surface.

Then the other two Beehive deep holes came back:

Hole L237B: 93.98m @ 6.03% TGC

• Including 22.61m @ 10.10% TGC

• Including 3.00m @ 14.64% TGC

Hole L239B: 95.45m @ 5.62% TGC

• Including 81.00m @ 5.82% TGC

• Including 0.67m @ 18.90% TGC

All three Beehive deep holes are delivering ~90-95 metres of continuous graphite from surface. All three ended in mineralisation.

And here’s the key point:

Beehive has over 100 shallow holes still being processed in the lab. If those shallow results mirror what the deep holes are showing — and there’s no geological reason to think they won’t — we’re looking at a massive near-surface graphite system that wasn’t even included in the November 2025 JORC update.

What This Means for the Resource

Both Iyan and Beehive are brand new deposits. Zero tonnes from either system are included in the current 26.1 million tonne JORC resource.

The November 2025 resource update only incorporated 39 infill holes from Camp Lode and Northern Syncline. It didn’t touch Iyan or Beehive.

Now we’ve got:

• 3 deep holes at Iyan (all exceptional, all ending in mineralisation)

• 72 shallow holes at Iyan (results flowing progressively, many already showing 30m+ intercepts from surface)

• 3 deep holes at Beehive (all delivering ~90-95m from surface, all ending in mineralisation)

• 108 shallow holes at Beehive (assays pending, expected to define significant near-surface tonnage)

The company drilled these deposits to test if the Northern Syncline system extended further than previously understood. The answer is unequivocally yes — and the extensions are thick, continuous, high-grade, and open at depth.

When these results get incorporated into the Q1 2026 JORC update, we’re talking about potentially adding another deposit’s worth of high-quality, near-surface material that sits within trucking distance of the planned processing facilities.

The 15-year mine life in the DFS?

That was conservative when it was released. With Iyan and Beehive now validated, we’re looking at a deposit that could realistically support 30-40+ years of production — exactly the timeline that US government agencies and strategic partners are looking for.

There’s no point getting involved if not multi-decade.

European Purification Breakthrough

Then while everyone was focused on the drilling results, something arguably more strategic happened in Italy.

Blencowe announced on January 15th that European specialist processor Alkeemia had successfully purified Orom-Cross graphite to 99.99% carbon content.

99.99% purity — known as ‘four-nines’ — is the highest commercially recognised purity for graphite. It’s extremely rare. Most battery-grade material is specified at 99.95% (‘three-nines-five’).

Four-nines graphite qualifies for niche, high-value end markets where ultra-high purity is mandatory:

• Defence applications

• Nuclear industry uses

• Specialist energy storage (like Yunasko’s supercapacitors)

• Advanced industrial applications where quality and traceability are critical

And Alkeemia achieved this using a proprietary European purification process that’s cleaner, less toxic and more cost-effective than conventional Chinese acid-based methods.

A week later, Blencowe signed a Letter of Intent with Alkeemia for toll processing of up to 1,000 tonnes per annum at Alkeemia’s Italian facility, with clear intention to increase volumes as both parties scale.

This is geopolitics in action.

As I hope you’re by now aware, Western governments — particularly in the US and EU — are actively trying to build critical mineral supply chains independent of China.

But there’s a problem: even if you mine graphite outside China, you still need to purify it, and almost all purification capacity sits in China.

Alkeemia provides a non-Chinese purification pathway into European markets. Combined with the existing relationship with American Energy Technology (AETC) in the US, Blencowe now has purification routes into both major Western markets using different proprietary technologies.

For European funding bodies and US government agencies evaluating which graphite projects to back, this is exactly what they’re looking for.

And the timing? This announcement came right as Blencowe would be advancing those co-investment discussions that started during the December roadshow.

Yunasko Offtake

On 9 December, Blencowe signed a non-binding MOU with Yunasko, a London and Kyiv-based advanced technology company specialising in supercapacitor energy storage systems.

The agreement covers 500 tonnes per annum of purified medium flake graphite for five years, with pricing to be finalised within 24 months.

Supercapacitors require exceptionally consistent, high-grade material. The fact that Yunasko — a recognised leader in next-generation energy storage for industrial and defence applications — is willing to commit to Orom-Cross graphite is technical validation of product quality.

Again, this is European offtake, for advanced applications, requiring premium purification, serving defence and industrial markets.

That’s strategic material.

The product will be upgraded in Chicago by AETC, then supplied to Yunasko as premium-grade purified graphite.

£3 Million Raise

On 11 December, Blencowe raised £3 million at 7p per share — at no discount to market price. We’ve also seen £1 million in warrants.

In isolation, a £3 million raise for a company with a market cap around £30 million doesn’t sound particularly meaningful. But context matters.

The company explicitly stated this funding is to:

• Advance Orom-Cross toward Phase 1 production readiness

• Progress commercial and offtake discussions

• Support financing due diligence, site visits, and engagement with development finance institutions and strategic partners

• Secure key personnel and progress early execution workstreams

This is bridge capital.

More importantly, the company reiterated that Phase 1 project financing is expected to be structured ‘predominantly outside of Blencowe plc equity’ — meaning minimal dilution to existing shareholders.

That language is consistent with co-investment structures involving development finance institutions, government agencies, and strategic industrial partners.

What The Market Is Missing

Blencowe currently trades at approximately £36 million market capitalisation against a post-tax NPV10 of $1 billion.

Even with aggressive discounts for jurisdiction, development risk, and financing uncertainty, that’s a substantial disconnect.

But here’s what I think the market is underestimating:

1. Resource Growth Is No Longer Hypothetical

The November DFS was based on 26.10 million tonnes. Iyan and Beehive weren’t included. Now we’ve got ~180 shallow holes at those two deposits delivering exactly the kind of bulk, near-surface, high-grade material that extends mine life and improves economics.

When the Q1 2026 JORC update incorporates these results, we’re likely looking at a resource base that supports 30+ years of production, not 15.

That fundamentally changes the conversation with strategic partners who need multi-decade supply security.

2. The Purification Story Just Got Much Stronger

Achieving 99.99% purity through a European processor using cleaner technology isn’t just technical validation — it’s a competitive advantage.

Most graphite projects can produce concentrate. Very few can demonstrate they have validated pathways to ultra-high purity through non-Chinese routes. Blencowe now has two: AETC in the US, Alkeemia in Europe.

This opens access to premium-priced niche markets that weren’t even modelled in the DFS economics. Defence applications, nuclear uses, advanced energy storage — these are supply-constrained markets where buyers will pay significant premiums for quality and security of supply.

3. The Co-Investment Structure Is Becoming Clearer

The pieces are falling into place:

• US DFC already committed $5 million with first right of refusal on project financing

• European partnerships validated through Alkeemia and EU SAFELOOP participation

• Offtake agreements in place for Phase 1 production (including Yunasko, Jilin and others)

• Government backing across three continents

• Exceptional geology now validated at Iyan and Beehive

This is a project where multiple parties are going to want in, and the company can structure financing on favourable terms.

The £3 million raise is working capital while those discussions progress.

The Timeline From Here

Based on what we’re seeing, here’s how I expect this to play out:

Q1 2026 (Now):

• Remaining Iyan and Beehive assay results released progressively

• Continued engagement with development finance institutions and strategic partners

• Additional offtake MOUs likely as qualification testing completes

• MoUs and/or LOIs with strategics

Q2-Q3 2026:

• Phase 1 financing structure finalised (government agencies + development banks + strategic co-investor)

• Updated JORC resource incorporating Iyan and Beehive

• Formal binding offtake agreements convert from MOUs

• Early works and procurement begin for Phase 1

H1 2027:

• First production from Phase 1 (20,000 tpa concentrate)

• Product quality validation at commercial scale

• Initial cash flow generation begins

2027-2028:

• Operational track record established

• Customer relationships validated

• Phase 2 expansion planning advances

• Potential for strategic acquisition discussions from position of strength

The key difference from the usual junior miner games is this: Blencowe isn’t planning to dilute shareholders heavily to fund development.

They’re structuring co-investment with parties who want long-term supply security.

That means existing shareholders participate in the full value creation as the project scales, rather than getting bought out at pre-production valuations or massively diluted through equity raises.

Beehive?

Here’s something worth thinking about: Beehive has delivered three of the best drill holes in the entire Orom-Cross system. All three deep holes hit ~90-95 metres of continuous graphite from surface.

All three ended in mineralisation.

And we’ve got 108 shallow holes at Beehive still being processed.

If even half of those shallow holes deliver results consistent with the deep drilling — and the geology suggests they should — Beehive alone could add enough near-surface tonnage to extend mine life by years.

The company has drilled only a small portion of the Beehive system. The deposit remains open along strike and at depth. The geological interpretation suggests this could be a very large system.

As those 108 shallow results continue flowing, we’re going to get a much clearer picture of just how significant Beehive actually is.

And remember: Beehive sits 3km from Northern Syncline, within the existing 21-year Mining Licence, within trucking distance of planned processing facilities.

This isn’t a remote, difficult-to-develop satellite deposit.

Why This Matters Now

The graphite market is tightening. China announced export controls on lithium battery products and processing technologies in late 2025. Western governments are scrambling to secure non-Chinese supply.

Orom-Cross checks every box they’re looking for:

• Large scale (now potentially much larger with Iyan and Beehive)

• High quality (99.99% purity validated through non-Chinese routes)

• Long mine life (30+ years with upcoming resource update)

• Infrastructure in place (roads, power, port access)

• Government backing (Uganda, US, EU all supportive)

• Low capital intensity ($40M for Phase 1, funded externally)

• Strong economics (96% IRR, $2+ billion free cash flow)

The DFS de-risked the technical and economic feasibility. The drilling results are de-risking geology and resource growth. The purification partnerships are de-risking downstream markets and value realisation.

What remains is execution and financing — and the financing discussions are clearly progressing.

Diamond in the Rough?

Then consider today’s test results - which revealed an unexpected quality marker, and a potential hedge against battery market volatility.

Apparently, Orom-Cross graphite can make diamonds. Not just any diamonds, but high-quality industrial mono-crystalline diamonds at conversion rates that make economic sense outside of China.

American Energy Technology in Chicago put Orom-Cross graphite through synthetic diamond production trials, and the results met a 53.6% conversion yield.

Why does this number matter? Because 50% is widely regarded as the make-or-break point for economically viable diamond production outside China.

Below that threshold, you’re competing with Chinese processors who have cost structures that are simply unbeatable. Above it, you’ve got a fighting chance at building a competitive operation in the West.

AETC noted that many natural graphites — including several deposits across East Africa — simply aren’t suitable for synthetic diamond manufacture.

The reason comes down to flake structure: thicker, less compressible flakes don’t convert efficiently to diamond under high-pressure, high-temperature conditions.

Orom-Cross graphite, by contrast, has fine and compressible flake characteristics that proved highly conducive to diamond synthesis. This is a distinctive quality signature that differentiates the deposit at a fundamental level.

And all the diamonds produced were mono-crystalline, the higher-value structure compared to polycrystalline alternatives. Particle sizes ranged from 50-60 microns on average, with some oversized diamonds reaching 350-500 microns.

Blencowe has been positioning Orom-Cross as a battery-grade graphite play aligned with the energy transition — and that remains the core strategy. But this diamond work opens up optionality.

Industrial synthetic diamonds are used in cutting, drilling, grinding, and precision manufacturing applications. It’s a specialised, high-value market where quality and conversion efficiency directly drive economics.

The confirmation that Orom-Cross can serve this market strengthens the overall development case in several ways:

• Western manufacturers increasingly want non-China supply chains for critical materials. A graphite source that can serve both battery and industrial diamond markets becomes inherently more valuable and resilient.

• Multiple high-value end markets mean Blencowe isn’t locked into a single customer base or pricing dynamic. That matters for funding and offtake negotiations.

• The fact that Orom-Cross graphite can hit diamond conversion benchmarks is, in itself, a powerful quality signal. It demonstrates material properties — compressibility, structural integrity and purity — that translate across applications.

The Bottom Line

Everything I wrote in December about Blencowe positioning for transformational co-investment has been validated.

But the geology just became materially better than the DFS assumed.

For anyone who got in early, congratulations. You captured the initial re-rating.

For anyone sitting on the fence, the question is simple: do you want exposure to this story at a £36 million market cap with all these catalysts still ahead, or do you want to wait until the JORC update hits, the financing structure is announced, and the market cap has risen further?

The easy money has been made.

But the real money — the ‘we just validated a 30-year mine life and secured strategic co-investment on favourable terms’ money — is still on the table.