TSI.L Regulatory News (TSI)

15 September 2017

BLENHEIM NATURAL RESOURCES PLC

("Blenheim" or the "Company")

IGS Update

The Company is pleased to provide an update on IGS (International Geoscience Services) Limited ("IGS"), a company in which Blenheim holds a 29.9 per cent. shareholding, following the finalisation of its audited annual accounts to 31 December 2016. IGS was largely able to mitigate the challenging market conditions in the mining sector during 2016, with only a small fall in revenues. It ended the year well placed to take advantage of the market upturn in 2017, which the directors of IGS believe shows every sign of continuing into 2018.

IGS Chairman and Blenheim Non-executive Director, Mark Parker, commented: "Globally, 2016 was the fourth consecutive year of declining mining exploration expenditure, with the industry slashing its worldwide exploration budget to barely one-third of the 2012 level. Despite this and in contrast to many consulting groups in the sector, IGS was able to avoid a material adverse impact on revenues and to expand its contract pipeline within its core market, which comprises governments and international agencies.

"Over the year, IGS's net assets increased by £222k, to £854k. Despite the challenging market, revenue for 2016 was down only 12 per cent. on 2015, showing real resilience in tough conditions. As a result of the fall in revenue, IGS realised a small loss for 2016. However, during the year, IGS won contracts worth more than $3 million, which are expected to be delivered over the coming 2-3 years, and indications for 2017 and 2018 are positive."

Blenheim's Chairman, Chris Ells, commented: "Our 29.9 per cent. stake in IGS represents a solid foothold in a sound geoconsultancy business and a highly promising technology platform. Since investing in IGS in 2016, Blenheim has assisted IGS in significantly improving its governance and business procedures, including in relation to risk management."

IGS Outlook

The market for IGS's core geoconsultancy services is currently buoyant and IGS expects this trend to continue. IGS anticipates that the World Bank will continue to provide finance to countries for geodata and geothematic projects in 2017 and into 2018. The depreciation of UK sterling against IGS's typical contract currencies is expected to benefit IGS's competitiveness and the potential profitability of current and future projects.

In recognition of the separate nature of IGS Xplore ("Xplore"), IGS's artificial intelligence prospectivity system, and to take account of the risk of developing a new product, Xplore Ltd was incorporated as a wholly owned subsidiary of IGS in July 2016. IGS raised £300,000 in 2016 from shareholders, which was invested in Xplore Ltd to enhance and grow the product, beyond its previous development which was funded by IGS.

Xplore was promoted at the Cape Town Mining Indaba, the Prospectors and Developers Association of Canada annual convention as well as other mining industry conferences. Considerable interest has been shown in Xplore and its semantic technology, with the system receiving endorsements from some of the leading mining consulting firms including The MSA Group in South Africa, SRK Exploration Services Limited and Geosoft Inc in Canada. Xplore map products for the northwest of Botswana were published on Geosoft Inc's geodata portal and a suite of Xplore data packages for areas of South America and Southeast Asia have been completed and offered for sale on the IGS website.

IGS believes that prospects for sales of Xplore products are best from its core customers, the international agencies and governments. IGS therefore intends to integrate the product more fully within its minerals promotion offering, by including Xplore as an option in tenders on World Bank and government programmes, (e.g. Kazakhstan, and India National and State Mining Departments). Work is also underway to develop a user portal, so that customers can apply Xplore technology from their own offices.

Ends

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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.