(Sharecast News) - Natural resources investor Metal Tiger announced a further $1.5m (?1.15m) equity investment into Botswana focused explorer Kalahari Metals (KML) on Friday, explaining that following the Investment, it would be interested in about 62.2% of KML.
The AIM-traded company said that as part of the Investment, it was conditionally granted a 2% net smelter royalty over all of KML's seven wholly-owned licences, which cover 6,650 square kilometres.
It said the five exploration licences owned by Triprop Holdings, in which KML has a 51% interest, do not form part of the royalties.
Metal Tiger said the royalties would fall away should it invest a further amount at a lower valuation than the Investment, subject to a cap of $0.5m, meaning any further investment by Metal Tiger up to that amount would need to be at the same valuation as the investment on Friday if the royalties were to be maintained.
KML was planning to use the proceeds of the investment to fund exploration drilling programmes at the Kitlanya East, Okavango Copper Project and Kitlanya West projects in the Botswana portion of the Kalahari Copper Belt.
Environmental approvals were now in place for drilling on all of KML's projects, Metal Tiger confirmed.
Drilling and soil sampling programmes were scheduled to start at Kitlanya East in March, followed by further target drilling at Okavango and Kitlanya West.
"This investment will allow the KML team to progress exploration and prove up other targets at Kitlanya East, Kitlanya West and the Okavango Copper Project, and also increases Metal Tiger's exposure to the highly prospective Kalahari Copper Belt, which currently includes our interest in KML, as well as in Sandfire's T3 Project and A4 Project, where Metal Tiger has a capped $2m net smelter and a 2% uncapped net smelter royalty respectively," said chief executive Michael McNeilly.
"In the context of our expectation of an increasing global requirement for copper production, and therefore exploration, we expect the Kalahari Copper Belt to become an increasingly more valuable area to be situated and are delighted to increase our interest in the area."
At 0959 GMT, shares in Metal Tiger were down 4.26% at 1.46p.
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