Blackmountain Resources has finalized its withdrawal from the United States market, where it sold offs its interest in two assets exploring for silver, in order to fully concentrate on the vermiculite project at Namekara in eastern Uganda.
The Australian company bought the Namekara vermiculite and Busumbu phosphate exploration targets in 2016, and went on a debt-raising campaign to turn around the projects.
The company recently announced that it sold off its silver assets in Montana and Idaho to Texas Energy Advisors in September for a total sum of AU$70,000 ($53,600) "as part of the focus on Namekara." Blackmountain did not undertake any exploration or technical work at the silver projects.
Blackmountain retains high expectations for the vermiculite in Namekara. In less than two years since it took over the mines, the company says it has made sales to 14 customers in five continents.
Of these 14, 10 have made repeat orders, according to the company. The company also said its sale of Uganda's vermiculite to a client in Southern Africa is a strong entry point into a market where South African mining companies remain dominant.
The company, in its annual report that it released in October, said: "Namekara is potentially the only vermiculite producer in the world that can significantly expand production and supply these grades." The company is exploring other uses of vermiculite, beyond the product being a key fertilizer, to boost its sales.
However, with vermiculite being a new source of income for Blackmountain Resources, the company is bound to face a number of challenges in the pricing of its product in order to grow its clientele, and an erratic commodity market, all of which could hit its bottom line.
The company, nevertheless, says it has the potential to beef up its balance sheet to withstand any financial shocks.