Jangada Mines [LON:JAN]’s shares are on the move, with the AIM-listed, Brazil-focused miner’s shares up 79% since 22nd January. Jangada was one of the battery material stocks The Armchair Trader started following in 2023.
The momentum comes on the back of positive noises emanating from its 10% investment in Blencowe Resources [LON:BRES], which operates the Orom-Cross Graphite Project in Uganda.
Jangada’s executive chairman, Brian McMaster said in a statement: “Blencowe continues to generate interest as it advances its Orom-Cross graphite project. Securing funding underscores investor confidence in this project and also highlights the strategic foresight of stakeholders in capitalising on the burgeoning graphite market. As the world continues to prioritise clean energy solutions, investments in graphite projects serve as a pivotal step towards achieving a greener and more sustainable future.”
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Jangada Mines took its initial investment in Blencowe to 9.5% with a GBP610,000 investment in October 2022 as part of a GBP750,000 fundraising exercise by the Ugandan miner, buying in at 4p a share. This investment allowed Blencowe to deliver a 100-tonne bulk graphite sample, a key battery mineral, to a potential offtaker in China and provided one year’s working capital. Blencowe turned to strategic partnership as like many junior miners, it had found traditional routes to funding difficult.
Funding from a new Africa-focused investor
Subsequently Blencowe secured USD0.5m funding from a new Africa-focused investor through the issue of 7.84 million shares on top of GBP2.5m from a strategic investor, which subscribed to 50 million new shares. The equity funding comes on the back of potential support from US development finance institution, the Development Finance Corporation, which sent a letter of interest to Blencowe’s management at the end of January meaning that the DFC will be undertaking due diligence on the project with an eye to supplying the debt component of the project financing. The DFC has already issued USD2m in grant funding to Blencowe.
The miner is part-way through a Definitive Feasibility Study on the northern Ugandan graphite mine, and at the end of last month Blencowe said it had extracted and packaged another 600 tonne bulk graphite sample for processing at the Jilian New Technology pilot plant facility in China.
Blencowe issued shares at 5p for both equity subscriptions, and is required to publish a prospectus on the basis that it will be issuing more than 20% of its issued share capital within a 12-month period. Blencowe shares were trading at 4.35p by mid-morning on Tuesday (6th February). Its shares have fallen nearly 40% in one-year, however Jangada Mines shares are going in the other direction. Blencowe hopes to go into commercial graphite production in 2025.
Jangada Mines equity in titanium play
Jangada Mines has had the luxury of sitting back and watching its investment grow for a moderate buy-in. The Brazilian miner also has equity in Fodere Titanium Limited, with a 7.7% investment in the company that is developing a pilot titanium tailings plant in South Africa. Jangada, as part of the investment, adopted Fodere’s tailings process for exclusive application in its own South American projects.
The Brazilian miner also holds equity in Kefi Gold & Copper [LON:KEFI], through the repayment of a GBP200,000 working capital loan it made to the Ethiopian and Saudi miner being made in equity in the company. Jangada has not needed to raise a pick to attain both geographic and mineral diversification.
Pitombeiras project progressing to full feasibility
Jangada Mines is still in the exploration phase of its flagship Pitombeiras vanadium titanomagnetite project in northeastern Brazil, and the company’s external consultant confirmed in April 2022, that there are no legal, technical, or geological impediments to proceeding to mine development, construction, and production, and highlighted the project’s robust economics and excellent potential to become a profitable producer of ferrovanadium concentrate and titanium dioxide. The company estimates that to get into production Jangada will be looking at committing up to USD18.5m in capex and USD33.1m in opex, which would see USD415.2m total gross revenue and a post-tax payback period of 13-months. The company is progressing the Pitombeiras project to full feasibility.
McMaster said in an earlier statement: “…we remain excited about Pitombeiras, which has excellent upside potential, as well as our investee companies, which are making excellent progress towards first production.”
Although the company is still making a loss – USD651,000 in 1H23 following a USD417,000 loss the year before – it has exciting potential, not only through its own Pitombeiras vanadium titanomagnetite project, but with exposure through its investments to other critical minerals in the renewable energy sector.
