TSI.L Regulatory News (TSI)

30 November 2017

 Blenheim Natural Resources Plc

("Blenheim" or "the Company")

Acquisition of Interest in Large Scale Cobalt Opportunity

Blenheim is pleased to announce that it has conditionally acquired a 25% stake in Cobalt Blue Holdings Inc ("CBH"), a company incorporated in BVI, with interests in Cobalt exploration in Cameroon for a consideration of up to 550,000,000 Warrants ("Consideration Warrants") over ordinary shares of 0.1 pence each in the capital of the Company ("Ordinary Shares") subject to the granting of 6 exploration licences in Cameroon. The Acquisition is part of the Company's strategy to make investments in technology metal related opportunities and is complementary to the recent investment in several highly prospective lithium licences in Mali.

Blenheim has also entered into a conditional Call Option valid for 6 months which would allow it to increase its stake in CBH to 49% for cash of £800,000 ("Cash Consideration"). If the Call Option is exercised by the Company, the entire Cash Consideration of £800,000 will be utilised to fund the prospecting and exploration costs of CBH with no dilution to Blenheim's 49% interest.

The issue of the Consideration Warrants and the Call Option are conditional upon the approval of the Company's shareholders of the Company in general meeting of the share capital authorities required to allow the exercise of the Warrants. The Company has undertaken to send out a Notice convening a general meeting of shareholders to seek these authorities within 10 business days.

Highlights:

· CBH has applications for 6 exploration licences totalling 2,837 km2 in Cameroon

· 5 of these licences are for territories neighbouring the Nkamouna and Mada Cobalt-Nickel Project which has significant Cobalt reserves; the 6th is in the Mvina division in the North of Cameroon

· Initial 25% of CBH acquired and an option for 6 months to acquire a further 24% for £800,000

· The Cash Consideration would fund a staged exploration programme across the licence areas and the potential acquisition of other cobalt assets and exploration licences

· Acquisition in line with the Board's defined strategy of making investments in the natural resource sector and in particular technology metal opportunities with a focus on lithium and cobalt

· Strong market dynamics for cobalt

o Cobalt price up 120% to $62,499 per metric tonne over last 12 months

o Increasing demand for uses in Electric Vehicle ('EV') and limited new supply coming on-stream outside the DRC, which currently produces 53% of global supply

Blenheim Chairman Chris Ells commented, "This is our first investment into cobalt exploration and provides the Company with a highly prospective opportunity in close proximity to one of the world's significant cobalt deposits. Cobalt, alongside lithium and nickel, is a major commodity which will be greatly in demand from the growing lithium Ion battery/EV market. Securing this interest provides Blenheim with exposure to this valuable metal and is complementary to our Malian lithium investments, which we believe are in the right geographical location and sector. We are a growing company with a defined strategy and structure which we believe will capitalise on our network and build a company which can deliver a portfolio benefitting from the changing global EV dynamic and upsurge in demand for technology metals."

CBH Exploration Licences

CBH is a Cobalt exploration group which is developing a portfolio of Cobalt assets across Africa. CBH has two 100% owned subsidiaries both incorporated in Cameroon, LC Exploration Limited and LC Minerals Limited. These subsidiaries have applied for 6 exploration licences at Ngoila Nord, Ngoila Est, Ekok, N'Tam Est ,N'Dja and Ngaoundéré. The application submissions for the licences were completed on 17 November 2017. Such applications for an exploration licence are processed within forty-five (45) days from the date of receipt of the applications. If an application is not processed within the 45 day period, the licence shall be deemed to be granted, unless the Mining Administration has notified the applicant in writing with regards to an extension of the processing time which shall not exceed the initial period.

These exclusive exploration licences, once granted, will be issued for an initial period of three years and may be renewed up to three times, for a maximum period of two years each. 


Ngoila Nord, Ekok, Ngoila Est, Ntam Est and Dja are in the Haut-Nyong, Haut-Nyong & Boumba-et-Ngoko, Haut-Nyong, Boumba-et-Ngoko and Haut Nyong & Dja-et-Lombo divisions respectively. The area is highly prospective for Cobalt and associated minerals and are situated in close proximity to the Nkamouna and Mada deposits in the Haut-Nyong division.

The neighbouring Nkamouna and Mada cobalt-nickel deposits were audited by SRK in June 2011 (for Geovic Mining Corporation) in accordance with CSA NI 43-101 standards and in conformity with generally accepted CIM 'Estimation of Mineral Resources and Mineral Reserves Best Practices' guidelines.

(Source :www.sec.gov/Archives/edgar/data/1398005/000119312511161283/dex991.htm

#18-56)

A staged exploration programme is being developed to identify targets across the licence areas. Stage 1 will comprise a desktop targeting study of available regional geophysical, and GIS data - Airborne Magnetic, Radiometric and DEM Processing, ASTER data review, Landsat 9 Data Review, high-resolution aerial imagery, consequent interpretation and targeting.

Stage 2 will follow up on the identified targets with ground verification, mapping and sampling. Grab samples, trenching and soil sampling will be cross-referenced with the geophysical targets and used to structure Stage 3 - a shallow auger drilling campaign.

CBH Financials

Cobalt Blue Holdings Inc ("CBH") was incorporated on 16 October 2017 as a BVI Business Company with Company Number 1957972. CBH has share capital of US$2,000 representing net assets of US$2,000 and has not traded in the period.

Transaction Structure

Blenheim has entered into a Share Purchase Agreement ("SPA") with Cobalt Blue Associates Inc ("CBA") to conditionally acquire a 25% interest in Cobalt Blue Holdings Inc ("CBH"), a company incorporated in BVI, for a consideration comprising the issue of 550,000,000 Warrants ("Consideration Warrants") over Ordinary Shares subject to the granting on 5 licences in Cameroon.

The First Warrant is over 300,000,000 Ordinary Shares and is exercisable at a price of 0.1p per share (being the nominal value of the Ordinary Shares) in the event that 3 out of the 5 exploration licences adjacent to the Nkamouna and Mada Cobalt-Nickel Project have been granted. The First Warrants may be exercised at any time until the third anniversary of the date on which the 5th Cameroon Licence has been granted. At the closing mid-market price of the Company's shares on 29 November 2017 (of 0.59p) the Warrants have an "in the money" value of £1.47 million.

The Second Warrant is over a further 250,000,000 shares and is exercisable at a price of 0.65p per share in the event that all 5 exploration licences adjacent to the Nkamouna and Mada Cobalt-Nickel Project have been granted. These Warrants may be exercised at any time once all 5 of the Cameroon Licences have been granted until the third anniversary of the date on which the 5th Cameroon Licence has been granted.

Together the First Warrants and Second Warrants, if exercised, will represent 34.35% of the issued share capital (as enlarged by their exercise and on the assumption that no other existing options and warrants are exercised.)

Any shares issued as a result of the exercise of the Consideration Warrants will be subject to an agreement whereby, for a period of 12 months following the allotment of shares thereunder, the sale of shares must be conducted through the Company's brokers on an orderly market basis.

Shareholders' Approval of share capital authorities and General Meeting

The issue of the Consideration Warrants to acquire the initial 25% interest in CBH is conditional upon the approval of shareholders of the Company in general meeting of the share capital authorities required to allow the exercise of the Warrants.

The Company has undertaken to send out a Notice convening a general meeting of shareholders to seek these authorities within 10 business days.

Call Option

Blenheim has also entered into a call option ("Call Option") with a 6 month maturity to increase its stake in CBH to 49% for cash consideration of £800,000. If the Call Option is exercised by the Company, the entire cash consideration of £800,000 will be utilised to fund the prospecting and exploration costs of CBH with no dilution to Blenheim's 49% interest.

The Company will be entitled to appoint one director to the board of CBH.

Ends

For further information please contact:

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.