Blencowe Resources Secures £290K to Settle Uganda Legacy Tax, Paving Way for Orom-Cross Project Funding
London-listed Blencowe Resources has conditionally raised £290,000 through the issue of 7.25 million new ordinary shares in a placement arranged by Tavira Financial.
The raise was limited to two existing investors, including the company’s largest shareholder, RAB Capital.
Proceeds from the placement, combined with existing cash reserves, will be used to settle in full a legacy capital gains tax (CGT) liability of about £342,751 linked to the company’s 2019 acquisition of Consolidated African Resources Uganda (CARU).
The liability arose after the Ugandan tax authorities reviewed CARU’s tax affairs covering January 2014 to December 2022, resulting in a CGT charge of £392,425.
Although the tax was originally chargeable to CARU’s former owners, under Ugandan law the acquirer can be held liable if the seller fails to settle.
By resolving the matter now, Blencowe aims to remove any potential obstacles to project financing discussions for its flagship Orom-Cross graphite project in Uganda.
As part of the deal, placing investors will receive one warrant per share, while Tavira will be issued 435,000 broker warrants.
If all investor and broker warrants are exercised in full, Blencowe could raise an additional £362,500 and £17,400, respectively.
Executive chairperson Cameron Pearce said the raise addresses a “long-standing” issue inherited from the CARU acquisition:
“We now have a clean balance sheet and have removed a hurdle with respect to project financing discussions.
It underlines our commitment to good governance and to meeting obligations in-country, where we have maintained an excellent relationship with the Ugandan authorities.”
Pearce added that with the liability settled, the company can focus entirely on advancing Orom-Cross, where a recent drilling campaign exceeded expectations.
Initial assay results—expected soon—will contribute to a material JORC resource upgrade.
Blencowe anticipates that further offtake agreements, strategic alliances, and the publication of the DFS later this year will position the project for a strong transition toward production.
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