Blencowe seeks resources reverse takeover

Blencowe Resources (LON: BRES) is the latest standard list shell to float, following soon after MENA-Land. Blencowe is focused on the resources sector and raised £340,000 gross.

It is important to stress that Blencowe could not have joined AIM by raising such a small amount of money. A minimum of £6m is required to be raised for a new AIM investment company quotation.

There have been previous share issues prior to the flotation at lower share prices than the 4p placing price. That is why there is pro-forma cash of £538,000, and slightly lower NAV, which is well below the flotation market capitalisation.

Cameron Pearce and Sam Quinn are former directors of Emmerson, which they identify as a rival for the type of deals that Blencowe will do. They left Emmerson when an acquisition was made.

The type of resources acquisition sought by the company has been kept deliberately vague. It is most likely to be in south east Asia, Africa and the Middle East.

The share price closed at 4.5p at the end of the first day of trading. That is nearly three times the pro forma NAV per share of 1.65p.

The premium of £900,000 is for the value of the quotation and the experience of the management. That appears more than enough for the time being until a target is identified.


Blencowe Resources (LON: BRES)

Resources shell


Standard listing

Flotation date: 18 April 2019 

Issue price: 4p

Amount raised: £340,000

Expenses: £80,000

Market capitalisation: £1.27m

Broker: Brandon Hill


Additional information

What does it do?

Rugby-based Blencowe started life as Cora Gold Ltd in September 2017 and its target business could be involved in minerals or oil exploration and development or could already be producing. Ideally, they would be near to generating cash, have good exploration prospects and good quality management.

The geographic focus is south east Asia, Africa and the Middle East. Management believes that a lack of funds available for small resources companies means that there should be plenty of opportunities. Larger companies are also divesting assets.

Improved commodity prices have prompted some recovery in the share prices of resources companies, but many are still short of cash.

Standard listed Emmerson (LON: EML) and Mila Resources (LON: MILA) are identified as competitors for the type of assets that Blencowe is interested in. Blencowe chairman Cameron Pearce had the same role at Emmerson when it floated in February 2017. He, and fellow Blencowe director Sam Quinn, left the Emmerson board after it acquired the Khemisset potash project in Morocco in June 2018.

Mila is still seeking to complete an acquisition. A proposed reverse takeover of Capital Metals Ltd did not go ahead.


Blencowe raised £260,000 after expenses, after the issue of just over one-quarter of the enlarged share capital. For every two shares issued in the placing, investors receive a warrant to subscribe for a share at 6p.

In November 2017, £50,000 was raised at 0.5p a share and then £350,000 at 3p a share during 2018.

Pro forma cash is £538,000 and the pro forma NAV is £522,000, which is equivalent to 1.65p a share.

Operating costs will be kept to a minimum and more cash will be required for any acquisition.


Cameron Pearce is non-executive chairman and a former director of Emmerson. He is a member of the Australian Institute of Chartered Accountants and over the past decade he has focused on exploration and mining.

Annual fee: £36,000

Sam Quinn is a non-executive director and a former director of Emmerson. He is a corporate lawyer and has been involved in the resources sector for more than a decade. He is a director of AIM-quoted Red Rock Resources and company secretary of NEX-quoted Tectonic Gold.

Annual fee: £24,000

Alex Passmore is a non-executive director and he has arranged debt for resources businesses.

Annual fee: £12,000


The directors did not buy additional shares in the latest placing. Cameron Pearce has a 18.95% stake, Sam Quinn a 12.63% stake and Alex Passmore 4.74%. The directors are locked-in for 12 months. (They can also receive a pay off of 100% of their annual fee if there is a change of control.)

Broker Brandon Hill is the biggest non-board shareholder with 8.29%, as it took its fee in shares, and it also has a warrant for 5% of the ordinary shares at 6p each. Bushwood Nominees, which received a fee of £50,000 for assisting with finding acquisitions and invested it in shares, and Jameker each acquired 1.25 million shares in the placing, equivalent to 3.95% each.

The Ralston Family Trust owns 6.32%, while Azalea Family Holdings, PSAR Family Trust and Salmon Brick each own 3.16%. Jason Stanley and West End Ventures have been diluted to below 3%. These six shareholders did not add to their stakes.

These shareholdings add up to just under three-quarters of the share capital. The pre-IPO shareholders all hold warrants exercisable at 4p a share for four years after admission.

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Andrew Hore
Andrew Hore is the publisher of AIM Journal, which is an online monthly publication covering the Alternative Investment Market.