London-listed Blencowe Resources has conditionally raised £290 000 through the issue of 7.25-million new ordinary shares, with this placing undertaken by Tavira Financial, and limited to two existing investors, including the company’s largest shareholder RAB Capital.

The net proceeds of the capital raise will be used, along with existing cash resources, to settle, in full, a legacy capital gains tax charge of about £342 751.

Blencowe has decided to settle this legacy capital gains tax that was established to be paid by the prior owners of Consolidated African Resources Uganda (CARU) during the time of its sale of CARU to the company in 2019.

This capital gains tax liability was recognised in Blencowe’s audited annual reports in 2023 and 2024, and it was noted that, following an inspection by the Ugandan tax authorities of the tax affairs of CARU covering the period between January 2014 and December 2022, the group has incurred a capital gains tax charge of £392 425.

“This related to the acquisition by the company of CARU in 2019. The amount was chargeable to the former owners; however, this was not settled by them and under Ugandan legislation the liability is reclaimable from the acquirer if it cannot be obtained from the seller,” the annual reports show.

Blencowe has now decided to settle the legacy tax so that it can remove any hurdles to discussions with project financiers, the company explains.

By funding this settlement through a small, targeted raise, the company aims to ensure that existing working capital and funds earmarked for the ongoing definitive feasibility study (DFS) remain fully focused on advancing the Orom-Cross graphite project, in Uganda.

As part of the placing, investors will be issued one warrant for each placing share.

Blencowe will issue Tavira with 435 000 broker warrants.

These investor and broker warrants, if exercised in full, would result in the company raising an additional £362 500 and £17 400, respectively.

“It is very pleasing to see continued support from our shareholders, particularly RAB Capital, in this small capital raise, which addresses a long-standing legacy tax matter that we inherited from the acquisition in 2019.

“We now have a clean balance sheet and have removed a hurdle with respect to project financing discussions. It also underlines our commitment to good governance and to meeting our obligations in-country, where we have maintained an excellent relationship with the Ugandan authorities,” executive chairperson Cameron Pearce comments.

“With this liability settled, we can remain fully focused on advancing value-accretive workstreams. Our recently completed drilling campaign exceeded expectations, and we look forward to releasing the first in a series of assay results shortly. These will feed into what we anticipate will be a material Joint Ore Reserves Committee upgrade.

“With potential further offtake developments, strategic alliances and the publication of the DFS this year, we are in a strong position to continue building momentum towards the development of Orom-Cross into production,” he adds.