UK firm Blencowe Resources Limited has dropped its bid to take over Sipa Resources Limited’s nickel-copper project in Kitgum district.
Blencowe, which had started the process of buying into Sipa’s Akelikongo nickel-copper project in February 2022, explained that its decision was informed by the massive potential of the nearby Orom-Cross graphite project.
“The decision to relinquish exposure to the Akelikongo project has been driven primarily by the truly exceptional results from the Pre-Feasibility Study (PFS) on the Company’s flagship Orom-Cross graphite project. Accordingly, the company believes it is in the best interests of its shareholders to focus all of its attention and resources on unlocking the inherent value at Orom-Cross,” the company announced in a statement.
In dropping its bid for the Akelikongo project, Blencowe has written off $250,000, part of which was used to complete a detailed airborne electro-magnetic survey.
Sipa Resources Limited, an Australian company, says it “intends to review this new data and recommence discussions with other parties who had previously expressed interest in moving the project forward.”
Cameron Pearce, the executive chairman of Blencowe, said the market shifts in the demand for graphite, forced them to focus on the Orom- Cross project.
He said: “We have considered the merits of running two projects in parallel and at this particular point we believe that concentrating solely on our priority graphite project makes most sense. The excellent results for Orom-Cross reaffirmed its value.”
He further explained that “whilst this has yet to be reflected in our public markets valuation, we are now seeing heightened interest from industry and private equity. Accordingly, we believe now is the appropriate time to focus solely on Orom-Cross, whilst removing any unnecessary dilution at this depressed level.”
He concluded by saying, “We do still see the synergistic benefits of another battery metal project near to Orom-Cross and we may revisit a nickel strategy in the future. However, we are seeing a fundamental shift in the graphite market right now with the price … rising substantially over recent months as projected demand-supply issues finally begin to impact.”