Blencowe Resources PLC (LSE:BRES) said it has successfully raised £635,000 through a share placement which involved issuing 12,700,000 new ordinary shares at a price of 5p each, a premium to Wednesday's closing price.
The company said the funds raised will be used to support the ongoing Definitive Feasibility Study (DFS) work for the Orom-Cross Graphite Project in Uganda. The study, managed by CPC Engineering, commenced at the beginning of 2023.
The net proceeds from the placement will ensure the DFS program remains on track without any disruptions while the company finalises a US$4.5mln Technical Assistance Grant (TAG) from the Development Finance Corporation (DFC).
Blencowe Resources recently achieved a significant milestone by passing the key screening requirements set by the DFC for the TAG, which is expected to cover 50% of the DFS funding. The company anticipates completing the TAG process in the coming weeks and subsequently accessing the necessary funds for the study.
The company is also awaiting the results of its metallurgical testing programs conducted in China and the United States. Samples of concentrate were delivered to technical experts in Wuhan University of Technology and American Energy Technologies Co. for testing purposes.
Additionally, a bulk sample of 100 tonnes is currently en route to Jilin Huiyang New Material Technology Company. The outcome of these tests is expected to reaffirm the consistently high quality of Orom-Cross concentrates. The raised funds will enable the company to expedite discussions based on these test results.
Cameron Pearce, executive chairman of Blencowe Resources expressed his satisfaction with securing additional funding for the DFS work and emphasized the importance of maintaining momentum.
In a statement, Pearce said: "Securing the support of a tier one financial institution such as the DFC provides the project and our company with a high degree of credibility and we are working through the process with the DFC so that they may formally join as our partner on the balance of the DFC work.
"At the same time we are making progress on our metallurgical studies in China and the US, with initial results expected in the near term. A favourable outcome in the test work has the potential to ultimately provide a funding solution for Orom-Cross to first production.
"I look forward to providing further updates in the coming weeks."
In morning trading on Tuesday, Blencowe Resources' shares were 3% higher at 5.10p.