LONDON (Alliance News) - Metal Tiger PLC Monday said it has struck a deal with an existing partner which may lead to its joint venture in Spain adding a new gold project to its portfolio after the investment company said it was "keen" to build on and expand its interests in the country.
Metal Tiger said it is pursuing the deal following a successful exploration programme with its joint venture partner in the country throughout 2015, but the company will also take a lower stake in the existing project in the country covered by the joint venture as a result.
The natural resource investment company is currently working with its partner, Mineral Exploration Network (Finland) Ltd, through the pair's joint venture company, Logrosan Minerals Ltd, which holds the Logrosan exploration project in Spain.
The joint venture has been working on the project throughout 2015, achieving its principal objectives to delineate the extent of tungsten and gold mineralisation and delineate extent of mineralisation across key targets at the project.
Metal Tiger has now struck a deal with Mineral Exploration Network through a separate standstill agreement, which will allow the company to conduct due diligence on the Maria exploration project which is wholly-owned by Mineral Exploration Network.
Metal Tiger said it was trying to enter the project because it is "recognising the success" of the work conducted on the Logrosan project in 2015, and has until March 10 to conduct that due diligence.
"We are delighted with the progress achieved by our joint venture partners in Spain and our experience to date has been very positive. We are now working with Mineral Exploration Network (Finland) to consider building on our existing interests with an additional licence," said Chief Executive Paul Johnson.
Johnson said the Maria licence has "attractive" historical information and is geographically close to its other interests in Spain.
As part of the due diligence, Metal Tiger and Mineral Exploration Network have agreed to move the drilling rig being used on the Logrosan project to Maria to conduct drilling and assay testing to assess the nature and extent of mineralisation at Maria.
If everything goes to plan, the Maria licence may be brought into the existing joint venture covering the Logrosan project, but Metal Tiger said there is "no assurance" a deal will be struck.
"Further updates to follow with regard to drilling results achieved at Maria and in respect of any commercial transactions that may be crystallised during or shortly after the due diligence period," said Metal Tiger.
Under the current joint venture agreement covering the Logrosan project, Metal Tiger was obliged to fund up to EUR500,000 in exploration work in 2015 to cover 5,000 metres of drilling. Throughout the year, the joint venture only managed to drill 4,700 metres at a total cost of EUR400,000.
The remaining EUR100,000 has been rolled over to 2016, and Metal Tiger has already forwarded EUR50,000 to the joint venture company to push the total up to EUR450,000. By spending that amount, Metal Tiger has earned a 45% stake in the Logrosan project.
The other EUR50,000, which was originally earmarked for the Logrosan project, will now be spent on the Maria project - which is mainly targeting gold but has also showed signs of holding tungsten mineralisation like the Logrosan project.
Although EUR50,000 of the original EUR500,000 planned expenditure for Logrosan has been moved to Maria, Metal Tiger did not state what would happen to the EUR50,000 of expenditure on Maria should the deal not progress to acquire a stake in the licence.
It also means that Metal Tiger will not earn the 50% stake in the Logrosan project as planned by spending the full EUR500,000.
"A full review is underway in respect of the entire 2015 Spanish exploration programme and a separate update will be provided on the achievements of 2015 and the next steps planned in respect of the Logrosan and Zorita licences," said Metal Tiger.
Metal Tiger shares were down 1.8% to 0.933 pence per share on Monday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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