Blenheim Natural Resources PLC Strategic Agreement (8923Y)

TIDMBNR

RNS Number : 8923Y

Blenheim Natural Resources PLC

11 December 2017

11 December 2017

Blenheim Natural Resources Plc ('Blenheim' or 'the Company')

Strategic Agreement to Develop Commodity Focused Blockchain-based Platforms

and Investment of US$1.05 million

Blenheim, the AIM-quoted resource investment company, is pleased to announce that it has entered into a non-binding collaboration agreement with leading global cyber security and online brand protection company BrandShield Ltd ("BrandShield") to develop proprietary blockchain-based platforms that will enable resource sector focused companies to conduct transactions globally. In addition, the Company has agreed to invest US$1.05million for a 7.22% stake in BrandShield's ordinary share capital as part of a total $US1.81m capital raising.

The Board of Blenheim believes that there is a distinct opportunity to utilise blockchain platforms in the resource sector particularly in commodity trading and Initial Coin Offerings ('ICOs'). The agreement and investment is part of the Company's strategy to pursue opportunities in the natural resource sector that have the potential to add significantly to shareholder value.

BrandShield is an international technology company originally backed by Office of the Chief Scientist of Israel's Ministry of Economy (now renamed The Israel Innovation Authority), with an R&D center based in Israel. The company's solution is already used by companies from different industries, including banking, financial, insurance, software, IT, gaming, fashion, pharmaceuticals, sports, consumer goods, travel, automotive, non-for-profits, and more. Among its customer are companies such as VISA, New-Balance, KTM Sportmotorcycle, Radisson hotels and Swisscom. It has a deep understanding of web-based platforms and cyber intelligence through its algorithms and proprietary online monitoring capabilities and also specialises in protecting blockchain companies planning ICOs from digital fraud. Utilising its technology, along with developing its own utility coin, BrandShield is expanding its solution to the crypto-currency and blockchain industry, making it well-placed to develop blockchain-based solutions for the natural resources sector. Blenheim will utilise its knowledge and expertise within the resource sector to assist in the development and roll-out of these solutions.

The Directors believe that the application of blockchain technology has significant implications across the natural resources sector; and in particular consider the following three areas are of particular interest to the natural resources sector:

-- Trading & Payments - Blockchain technologies are beginning to disrupt and open energy trading markets. Boundaries between asset classes are blurring as cash, energy products, and other commodities become digital assets. One of the advantages of cryptocurrencies, such as Bitcoin, is the significantly lower costs associated with cross-border payments, in addition to the instant transfer, cutting out the need for intermediaries and the time required for them to validate and clear the funds.

-- Mitigated Risk of Fraud & Disputes - Blockchain-enabled applications can address issues such as fraud, error and otherwise compromised transactions to limit credit risk and transaction capital requirements. By trading physical commodities on a blockchain solution, commodity traders could benefit from increased speed of exchange, improved availability of data, and enhanced reliability and auditability as records are verified in near real-time. Ultimately, this could result in minimising transaction backlogs and overall costs.

-- Transparency & Compliance - Blockchain, by design, should enable greater transparency and efficiency. Sharing digital blockchain information in joint-operating agreements could reduce, if not eliminate, the need for reconciliations between companies and for data hubs controlled by third parties. This could disrupt the current processes for balloting partners on new projects, performing joint interest billing, and reporting production revenue.

In accordance with investment stategy, the Board continues to look for investments that will provide exposure to rapidly emerging opportunities within the natural resource space, including technology applicable to the sector. This investment, which will be funded from existing cash reserves, follows the recent agreements providing the Company with exposure to highly prospective exploration portfolios focussed primarily on technology metals, including lithium in southern Mali (a rapidly emerging and potentially globally significant lithium district) and cobalt and nickel in Cameroon, where the Company has gained exposure to an extensive land position surrounding the world class Nkamouna and Mada Cobalt-Nickel Project. By investing in several targeted opportunities, the Board believes it has a blended portfolio that provides exposure to potentially transformation opportunities.

Blenheim Director, Charlie Wood, said, "Through this investment we join a business that has globally scalable IP and Tier 1 exposure with Visa, New-Balance and other world class stakeholders. Trading and transactional security are becoming ever more critical and we believe BrandShield, with its deep understanding of web-based platforms and cyber intelligence, is ideally placed to develop blockchain based solutions for the natural resources sector as well as supporting commodity focussed ICOs. We believe that companies in this sector will benefit from blockchain technology for a range of applications, from optimising efficiency, to transparency in business transactions, to securely storing inventory data on the blockchain. In the last few years, the industry has struggled with price volatility and production levels, which has led to cost-cutting efforts, reduced outputs and layoffs. These challenges have prompted many companies to rethink how they operate and to identify new ways to optimise supply chain management and transaction processing. As such, blockchain is gaining traction and broader acceptance by the commodities sector for its potential to fundamentally change the way certain transactions are conducted.

"We are rapidly developing a portfolio of investments, which provide us with a number of excellent opportunities to build shareholder value. We have exposure to highly prospective land positions in recognised mineral districts that we believe, through investment by their holders, have significant re-rating potential, which will in turn impact our valuation. For instance, we recently invested, subject to our next EGM, in Cobalt Blue Holdings giving us a prospective 49% interest in a company that has land surrounding the Nkamouna project, reported to have 59.8 million tonnes (Mt) grading an average of 0.24% cobalt, 0.68% nickel and 1.37% manganese classified as Measured Mineral Resources with an additional 60.8 Mt grading an average of 0.22% cobalt, 0.62% nickel and 1.32% manganese classified as Indicated Mineral Resources, highlighting the prospectivity of the region. We are excited about the potential of our investments and look forward to updating shareholders as we now move from acquisition to development phase across current portfolio.

Transaction Structure

Blenheim has entered into a Share Purchase Agreement with BrandShield, a company duly incorporated under the laws of the State of Israel, to participate in a share placement of new shares to raise $US1,815,000. On closing of the placing, the share capital of BrandShield will be 244,350 fully diluted shares. Blenheim has invested $1,049,987 for a shareholding of 17,635 shares representing 7.22% of the BrandShield fully diluted equity.

Blenheim has also entered into a non-binding collaboration agreement with BrandShield, to reflect their mutual intention to share industry experience and financial and technological resources with the intent to develop blockchain-based platforms that will enable resources sector based companies globally to conduct transactions.

BrandShield is a technology company that provides organizations a powerful solution to manage and protect IP and brands online. BrandShield's technology protects brands from fraud, counterfeits, trademark infringements and other brand abuse activities in many platforms: websites, marketplaces, mobile apps, social media and PPC ads. Originally backed by Office of the Chief Scientist of Israel's Ministry of Economy (now renamed The Israel Innovation Authority) and with an R&D Center based in Israel, the company is committed to a continuous development of a solution that meets the needs of all sizes of entities - from small companies to large enterprises. As part of its development BrandShield is expanding its solution to the crypto-currency and Blockchain industry, and as part of that process is gaining a unique know-how in the industry. Consequently, BrandShield's understanding of web-based platforms and cyber intelligence makes it well placed to develop Blockchain based solutions for the natural resources sector. BrandShield had a loss before tax of NIS 1.763 million for the 12 months to 31 December 2016 (a loss before tax of NIS1.131 million in 6 months to 30 June 2017). (Note current exchange rate is 1 NIS : GBP0.21). As at 30 June 2017 its net asset value was NIS 5.424 million. With the current $US1.81m funding round the business will be transitioning from its development phase to full global product launch and expansion into the crypto-currency and blockchain industry.

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

**Ends**

For further information please visit www.blenheimnaturalresources.com or contact:

 
Chris Ells/Charlie Wood     Blenheim Natural Resources Plc      [phone] 
 
 
                              Spark Advisory Partners Limited 
  Neil Baldwin/Mark Brady     (Nominated Adviser)                 [phone] 
 
Nick Emerson                SI Capital Ltd (Broker)             [phone] 
 

Notes to Editors

Blenheim Natural Resources Plc (AIM: BNR) is an investment company quoted on AIM, with a strategy focused on identifying and investing in opportunities in mineral exploration and mining, as well as technology associated with the natural resources sector.

BrandShield is a global leading online brand protection and anti-fraud company with a portfolio of multi-nationals including Visa, New Balance, KTM Sportmotorcycle, Radisson hotels and Swisscom. Its technology protects brands from fraud, counterfeits, trademark infringements and other brand abuse activities in many platforms: websites, marketplaces, mobile apps, social media and PPC ads. Originally backed by Office of the Chief Scientist of Israel's Ministry of Economy (now renamed The Israel Innovation Authority) and with an R&D centre based in Israel, BrandShield is expanding its solution to the crypto-currency and blockchain industry.

Blockchain - a single source of truth for shared information, such as financial transaction data (e.g., a quantity of bitcoins), legal contracts, deeds of ownership, and identity documentation. The information is recorded on a ledger that is distributed across every node (i.e., computer) in a network on the internet, and is structured and encrypted in such a way that it cannot be altered without agreement by a majority of the nodes in a network (which automatically and simultaneously check the change against the ledger). Any change, such as a payment from person A's bitcoin wallet to person B's bitcoin wallet, must be requested by the owner of the data (person A in this case), using a combination of private and public keys that validate the identity and legality of the transaction. The greater the number of nodes in a network, the more secure it is, since any attempt at fraud would require the corruption of the same chain in every node in a network simultaneously during the few seconds that the blockchain is processing a change. This process directly addresses the underlying issue of trust in society and business that creates the need for third-party validation (e.g., by banks or lawyers), since the network itself validates the change.

When new information is added into the blockchain, a new block is created that is linked to the previous block (containing a related transaction or contract) and, therefore, the historic data remains in the chain and an audit trail exists. As an example, in a relatively simple transaction such as buying a house, the seller currently would instruct lawyers to draw up the paperwork, terms are agreed upon, contracts are physically signed by both parties, proof of payment is provided, and the lawyers then arrange for the transfer of the title deed. Using blockchain, the seller could send the buyer the contract containing the digital certificate of ownership for the house in the blockchain. Once the buyer completes the terms of the contract by sending the payment, the contract is automatically completed, and the digital certificate of ownership is transferred to the buyer. The nodes in the blockchain validate the transaction and simultaneously update the ledger. In this way, the updated ownership can be verified on any node. The transaction is completed quickly, without the need for third-party verification of signatures and payment, and the history of ownership remains in one secure and indisputable place-the blockchain.

This information is provided by RNS

The company news service from the London Stock Exchange

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December 11, 2017 02:00 ET (07:00 GMT)