Blenheim Natural Resources Plc (AIM:BNR) Strategic agreement with BrandShield

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 : £0.21). 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.

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