MTR.L Share News (MTR)

(Sharecast News) - Metal Tiger has agreed to invest $0.75m (£0.54m) in the Mauritius-domiciled company Armada Exploration, it announced on Friday, which owns 100% of Armada Exploration Gabon.

The AIM-traded firm said Armada Exploration Gabon holds two exploration licences prospective for magmatic nickel-copper sulphide in Gabon, covering almost 3,000 square kilometres.

It said the holding was considered to present a frontier district-scale exploration opportunity.0

Metal Tiger said it agreed to subscribe for five million new shares in Armada at 15 cents each via a promissory note, with $0.35m to be invested up-front, and the remaining $0.4m to be paid in monthly instalments of $80,000 over the next five months.

In the event of a public listing, Metal Tiger said it would need to settle any outstanding amounts under the promissory note in full at the time of the listing.

Following completion, Metal Tiger would own 18.5% of Armada, and would be given the right to appoint a director to the board, although it said it had not yet chosen to take that up.

Metal Tiger would also receive 3,333,333 36-month options issued at 22.5 cents within five days of completion.

"We are pleased to invest in Armada, which presents a district scale opportunity with compelling geology," said chief executive officer Michael McNeilly.

"This frontier is significantly under-explored, which makes it so exciting, and we welcome the longer-term proposal for Armada to undertake an initial public offering.

"Armada has completed significant work to create a compelling geological model that has delineated multiple drill-ready projects."

McNeilly said that should the initial work programme prove successful, there was the potential to create significant value uplift across all of the untested targets, and increase the overall attractiveness of the district.

"Given its experienced leadership team who have a successful track record of involvement in major discoveries and operational experience in central and southern Africa, we look forward to the results of Armada's upcoming operational phase."

At 1105 GMT, shares in Metal Tiger were up 3.01% at 21.37p.