LONDON (Alliance News) - The chief executive of Metal Tiger PLC Tuesday said 2016 has been "one of the most important and value generative periods" for the company after making "tremendous progress", conceding the company could be a potential takeover target following recent developments.
"We aim to build Metal Tiger into a substantial precious and strategic metals investing company and so far we have made very good progress," said CEO Paul Johnson.
Metal Tiger has two divisions, one focused on investments at a project level and the other housing investments in companies at a corporate level, and is looking to step up its activities further in search of even more opportunities.
Metal Tiger said it plans to hold a general meeting within the next three months to seek approval for the issue of shares to increase its stake or acquire new stakes at a project level.
Importantly, Johnson said he is aware the company is seen as a potential takeover target, but pledged not to allow any potential deal to impact the recently awarded share options that are set to be issued to directors and staff if approved at the forthcoming AGM.
"Recent progress achieved in Botswana and Thailand has created a significant degree of interest in the company which has been evidenced in part through a rising share price and significant market liquidity," said Johnson.
"Although no formal takeover offers or similar proposals have been received or indicated for the project or Metal Tiger itself to date, the board is aware that should an offer be made prior to the option award being approved by shareholders at the forthcoming AGM in just under three months time, then the option awards could be lost," said Johnson.
Metal Tiger proposed issuing 10.0 million share options to its directors and a further 15.0 million share options to its employees back in early March, and a condition of the options is that staff members must remain with the company for 12-months in order to exercise them - something that would potentially be impacted should a takeover of the company occur.
"Should a takeover offer for the company be received in the near term, in reference to the 12-month engagement period, once again staff and partner options may be lost. Given the commitment of our team to the company and the significant efforts of all team members, this is a scenario we cannot allow to materialise," Johnson pledged.
Johnson said proposals will be put forward at the upcoming meeting that will protect the share options issued under a takeover scenario.
"For clarity we would confirm that no takeover offer or proposals thereto have been received by the company to date. Furthermore investors should appreciate that until any such offer is received and communicated to market there can be no assumption an offer will be made by any party," said Johnson.
Metal Tiger is currently involved in several projects spread across the world and has made a lot of progress since the start of the year, accelerating a drilling programme in Botswana, making the decision to bring two old mines back into production under its joint venture in Thailand, completed an initial drilling programme in Spain and progressing a project in Russia.
The asset trading division that invests in companies at a corporate level is looking to "substantially build the working capital position of the company without equity dilution," said the company.
Metal Tiger said it currently has around GBP4.5 million of cash and liquid investments on its books.
"Metal Tiger is in a particularly robust financial position and has enough working capital to continue the current rate of activities well into 2017. Should the resource sector recovery slow down, we can reduce our cash outflows and investing activities, and thus our working capital could be made to extend for a number of years should market conditions become difficult once again," said the company.
"We believe that this is unlikely as the recovery phase looks reasonably well entrenched for now. Therefore, we expect to invest actively in our metal projects and at the same time continue to build working capital for the company through proactive investments in our asset trading division," it added.
Metal Tiger shares were trading down 0.9% to 4.56 pence per share on Tuesday afternoon.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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