Block Commodities Ltd
The information communicated 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.
BLOCK COMMODITIES LIMITED
("Block Commodities" or the "Company")
Block Commodities Limited / Epic: BLCC / Sector: Mining
Block Commodities Limited, the innovative commodity trader operating in Africa, is pleased to provide an update to shareholders.
- The Company advises that it has successfully completed the preliminary due diligence phase with The Eelleet Network Corp. ("TEN") and will continue to progress the legal and technical aspects of this transaction (the "TEN Transaction") over the coming weeks.
- To streamline workflows and reduce costs in relation to the TEN Transaction, the Company has taken the decision to delay the publication of its Annual Report for the year ended 30 June 2018. As a result, the Company's Annual Report for the year ended 30 June 2018 will be published no later than 31 December 2018.
- Recent months have seen steady progress in the implementation and expansion of the Company's "Farmer 3.0" ecosystem with a pilot project underway in Uganda and an agreement in place to carry out a similar project in Zambia.
TEN Transaction Progress
Further to the announcement made on 21 September 2018, in which the Company announced that it had signed a non-binding letter of intent for the acquisition of the entire issued share capital of Block Commodities by TEN, the Company advises that it has successfully completed the preliminary due diligence phase of the TEN Transaction.
The Company and TEN will continue to progress the legal and technical aspects of the transaction over the coming weeks and the Company will provide further updates to the market as and when appropriate.
- Uganda - the Company's "Farmer 3.0" pilot project was launched in Uganda in September 2018 where local smallholder farmers, selected by Pure Grow Africa, will be provided with access to:
- "token"-based loans to purchase fertiliser
- technology to disseminate information concerning best agricultural practice to improve yields
The project is being overseen by Block Commodities' local Head of Africa Operations to ensure a successful roll-out. Furthermore, the Company is seeking further applications of its ecosystem where they it might help farmers address the challenges they face.
Due to positive results in the first few months of the pilot's implementation, Block Commodities and its partner, Pure Grow Africa, are planning to roll out the pilot to up to 1,000 smallholder farmers. Pure Grow Africa, will act as the agricultural produce off-taker and purchase the product.
- Zambia - As predicted by Block Commodities, the Zambian Government has been unable to fully fund the roll out of its e-Voucher program. The Company is proud to be addressing this shortfall with its Blockchain based Ecosystem.
Block Commodities has entered into a memorandum of understanding with a sizeable local milling company to off-take agricultural outputs from 300ha, and to co-ordinate a series of transactions with small-scale Zambian farmers operating under the Company's "Farmer 3.0" ecosystem. Each farmer will be provided with a loan denominated in the Dala token on the Wala financial inclusion App. The Dala will be exchanged for an input pack comprising fertiliser, seed, agrochemicals and crop insurance provided by Block Commodities. During the growing season, the farmer will receive support and advice from the Company's local team. At harvest time, the farmer will deposit their produce at the Company's managed warehouses. Part of the crop will be used to repay the Dala loan and interest, with the surplus crop, being aggregated with the other farmers produce for onward sale, thereby improving the price received. Block Commodities will receive a commission and the off-taker will pay the bulk market price at the time. Whilst small in scale, it is hoped that this project will be an excellent springboard for future growth.
The Vipa Transaction
Further to the announcement on 14 March 2018, the Company announces that it is continuing its work with Vipa Holdings (Pty) Ltd to develop a speciality blending operation. In addition, we continue to work with the Vipa management team to explore new opportunities in the speciality fertiliser sector and to source product for our "Farmer 3.0" ecosystem. Further updates will be made in due course.
In accordance with the Company's farm-out agreement with African Agronomix limited ("AAX"), AAX became the operator of the Lac Dinga Potash project (the "Project") with effect from 17 October 2017.
The second term of the Project license expired on 25 April 2018. The application for a renewal of the license for a further two years was submitted in early 2018 in line with the provisions set out in the Mining Code,.and is now awaiting formal cabinet approval by the Government of the Republic of Congo.
The farm out agreement states that the licence must be renewed before AAX commence work on the Project.
Joint Venture with SG Inc.
Further to the announcement made on 1 December 2017. Block Commodities and SG Inc. have undertaken an initial prefeasibility study into a project to develop mineral opportunities and downstream resources in the Republic of Congo. The Company is seeking additional investment partners to enable this project to move forward.
Implementation of the FarmCoin project, announced on 14 May 2018, has been delayed pending definitive determination of the US regulatory position as regards cryptoassets. Recent regulatory statements regarding the regulation of crypto-assets have given some clarification and the Management of the SWARM fund, who are issuing the token, are reviewing how the FarmCoin project may be impacted.
Chris Cleverly, Chairman of Block Commodities commented: "This has been a fruitful year for Block Commodities. We have established key partnerships to allow our African strategy to come to life and have launched pilot projects in Uganda and Zambia. We have other exciting prospects to work on in the year to come."
The Directors of the Company accept responsibility for the content of this announcement.
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