TSI.L Regulatory News (TSI)

30 November 2017

 Blenheim Natural Resources Plc

("Blenheim" or "the Company")

Increased West African Lithium Exposure Achieved through Transformational Deal

Blenheim is pleased to announce that it has entered into an agreement with Future Fuels Holdings Inc ("FFH") to acquire a 40% equity interest in Xantus Inc ("Xantus") (the "Transaction"). Xantus has assembled a portfolio of highly prospective permits covering in excess of 1,500 sq km in Mali and Niger, countries recognised as having the potential to contain significant lithium deposits

Blenheim has previously acquired a 40% equity interest in Mansa Lithium Inc ("Mansa"), a subsidiary of Xantus, as announced by Blenheim on 26 July 2017. As part of the Transaction this investment into Mansa will be rolled up so that Mansa becomes a wholly-owned subsidiary of Xantus.

The consideration for the acquisition of the 40% interest in Xantus is the issue of 125,000,000 ordinary shares of 0.1 pence each in the capital of Blenheim ("Ordinary Shares") to FFH and the transfer of the shares held by Blenheim in Mansa to Xantus.

This transaction provides Blenheim with a 40% interest in 2 further permits in Mali and 4 permits in Niger as well as a direct investment into Xantus which is party to an option agreement with La Societe Omnium Invest SA. These permits, combined with the Company's interests in the existing portfolio of 4 permits held by Xantus and Nashwan Holdings Limited, represent a significant land holding of Lithium focused permits in West Africa. 

Highlights:

40% Interest acquired in the following permits -

- 2 permits at Dieba North and Soumaya in Mali (200km2) These Mali permits are north of the Birimian licence where significant lithium deposits have been discovered

- 4 permits at Bongou, Diblio, Dingoaba and Namaga 2 in Niger (1,000km2 ). Niger permits have a historical Lithium deposit identified from the 1960's

Chris Ells, Blenheim's Chairman, commented, "These are exciting times at Blenheim as the Company increases its exposure to large scale lithium permits in what is rapidly emerging as a major new Lithium Belt. The ability to gain access to highly prospective licence areas, with a group who are experienced operators in the West African region, is a positive combination. Blenheim continues its focus on 'next generation' resources, including lithium, cobalt and nickel , which are in high demand due to the predicted future global growth in the Electric Vehicle market.

Work will now be undertaken to prioritise the identified pegmatites for further quantification and potential development. The Xantus portfolio is strategically positioned between and contiguous to the licence areas of the two other significant regional listed exploration groups which have identified exciting prospects. Blenheim looks forward to developing a relationship with the Xantus team and delivering regular news on progress as the Company looks to implement its investment strategy and build shareholder value."

Transaction Structure

Blenheim has entered into an agreement with Future Fuels Holdings Inc ("FFH") to acquire a 40% equity interest in Xantus.

The consideration for the acquisition is the issue of 125,000,000 Ordinary Shares to FFH and the transfer of the shares held by Blenheim in Mansa to Xantus. These new Ordinary Shares will be subject to a lock-in period of six months.

Xantus has two subsidiaries, Xantus Mali Sarl (wholly owned) and Mansa Lithium Inc ("Mansa").

Blenheim has previously acquired a 40% equity interest in Mansa Lithium Inc ("Mansa"), a 60% held subsidiary of Xantus, as announced by Blenheim on 26 July 2017. As part of the Transaction this shareholding into Mansa will be rolled up so that Mansa becomes a wholly-owned subsidiary of Xantus.

The Transaction provides Blenheim with an interest in the following:

Xantus Mali Sarl - this company holds two exploration permits, Dieba North and Soumaya

Xantus - is party to an option agreement with La Societe Omnium Invest SA (further details of such option agreement are detailed in the announcement by Blenheim on 3 July 2017)

Xantus - directly holds exploration licences in Niger for Bongou, Diblio, Dingoaba and Namaga.

Closing of the transaction is conditional upon the transfer of the shares held by Blenheim in Mansa to Xantus and updated local law confirmations regarding the companies within the Xantus group.

Mali Exploration Permits

Dieba North and Soumaya exploration permits in Mali are wholly owned by Xantus Mali Sarl. The permits areas are respectively 85km2 and 100km2 in size and were granted in 2017 on a standard 3 year exploration term with the right to extend twice for a further 2 years. Dieba North directly adjoins to the north of the Dieba permit (already under agreement with Blenheim) which borders Birimian's Goulamina Lithium discovery. Soumaya is located to the north of Dieba North. 

With regards to the Dieba, Nimissila, Meniambala and Djidje exploration permits held via Xantus, Xantus Mali Sarl and Mansa Lithium Inc, the three stage exploration targeting programme is being undertaken.

Stage 1 comprised Geophysical and GIS surveys across the license areas to identify 'weights of evidence' targets across the licences in the Bougouni region of Southern Mali. 15 priority targets were identified and have been followed up with field geological mapping and sampling. (Details were announced by the Company on 16 October 2017.)

Stage 2 comprising a field work programme is nearing completion. Geological information, data capture and map work has been completed. Outcropping has been identified during the Stage 2 programme and nearly 100 prospective pegmatite grab samples have been taken. Samples will be processed by SGS Bamako for ICP-MS analysis. Results are expected at earliest in January 2018.

The Stage 2 field work programme will produce a report containing GIS exploration mapping of outcrops and structural occurrence of significance, a validated database of sample locations and assay results plus interpretation of the data to identify targets for auger drilling.

Stage 3 will comprise auger drilling on an 800m x 100m grid over the identified target areas and is expected to commence early in 2018.

Niger Licences

The four licences in Niger, at Bongou, Diblio, Dingoaba and Namaga, are located in adjoining blocks and are situated 170km from the capital city, Niamey. In the 1960's work was carried out which showed a potential Lithium deposit of 350,000 tonnes of up to 2% LiO2.

Xantus financials

Xantus was incorporated in August 2016 and has not filed accounts to date. Unaudited management accounts for the company show a loss of $19,000 for period ended 30 October 2017, and gross assets of $722,000.

Related Party Transaction

Xantus was, within twelve months of the date of this announcement, a substantial shareholder of the Company and as such is regarded as a related party of the Company for the purposes of the AIM Rules for Companies. As its parent company Future Fuels Holdings Inc is an associate of Xantus and is also regarded as a related party. The 100,000,000 Ordinary Shares previously held by Xantus have been distributed to the shareholders of Future Fuels Holdings Inc such that they together currently own these Ordinary Shares, which represent 10.8% of Blenheim's issued ordinary share capital. The Transaction is a related party transaction under AIM Rule 13.

The directors, all of whom are independent of Future Fuels Holdings Inc, consider, having consulted with SPARK Advisory Partners Limited, the Company's nominated adviser, that the terms of the transaction are fair and reasonable insofar as its shareholders are concerned.

Admission to Trading

Application will be made for the 125,000,000 new Ordinary Shares to be admitted to trading on AIM, which is expected to take place on or around Tuesday 5 December 2017. The shares will, on Admission, rank pari passu in all respects with all other Ordinary Shares.

Total Voting Rights

Following admission of shares to trading on AIM, the Company's enlarged issued share capital will comprise 1,051,174,497 Ordinary Shares. The Company does not hold any shares in treasury. Therefore, the total number of Ordinary Shares with voting rights will be 1,051,174,497. This figure may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the FCA's Disclosure Guidance and Transparency Rules.

Extension of Nimissila Option Agreement

On 3 July 2017 the Company announced that Mansa had acquired the right to acquire an initial 80% indirect interest in the Nimissila exploration permit ("Nimissila Permit") in southern Mali owned by La Societe Omnium Invest SA ("Omnium"). At that time Omnium granted Xantus an option to acquire an initial interest of 80% in the Nimissila Permit (which could increase to 100%) for US$150,000 until 16 December 2017 during which time Xantus had the exclusive right to explore and evaluate the permit area. Xantus has paid Omnium $7,500 in return for extending this option period by 6 months to 16 June 2018.

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.