Valereum and First Class Metals explore blockchain for mineral project funding

Valereum PLC (AQSE:VLRM) has signed an outline agreement with First Class Metals PLC (LSE:FCM) as the pair explores using blockchain technology to create digital tokens backed by real mineral assets.

Essentially, the non-binding memorandum of understanding will assess ways of unlocking funding for the latter’s projects in Canada using new digital access to capital rather than traditional equity investment.

The process, called tokenisation, involves converting the value of physical assets into digital tokens that can be traded on a blockchain, a secure and transparent digital ledger.

This method has the potential to make normally illiquid assets more accessible and liquid.

It also offers new ways to raise capital without diluting ownership stakes, which can be a concern for early-stage companies.

The partnership will focus on assessing whether it is feasible to apply a regulated and structured token framework to selected mineral exploration assets within First Class Metals’ Canadian portfolio.

Valereum’s trading platform, VLRM Markets, will be involved in developing the digital exposure for investors.

If successful, the project could provide global investors with access to mineral resources through a more transparent and liquid investment vehicle while supporting environmental, social and governance (ESG) goals.

The companies said this marks one of the first serious attempts by a UK-listed resource company to apply regulated tokenisation in the mining sector.

“I believe this collaboration is a pivotal moment in the evolution of both mining and blockchain,” said Peter Sekhon, Valereum’s head of business development.

“Bringing together Valereum’s expertise in digital assets with FCM’s high-quality exploration portfolio in Canada opens the door to a new era of capital markets access for mining.

“Tokenisation offers a route to release the value of mineral exploration projects in a regulated and accessible way.”

Details on which specific projects will be included are still under review, with further announcements expected in due course.

Tokenisation of real-world assets is a rapidly growing market expected to surpass $16 trillion by 2030.

Commodities such as gold and critical minerals are predicted to be among the leading sectors for this growth.

At the same time, demand for ESG-focused investment is also increasing, with forecasts suggesting responsible investment assets could exceed $40 trillion over the same period.