LONDON (Alliance News) - Metal Tiger PLC on Wednesday said Kalahari Metals Ltd has entered into a binding agreement to buy Kitlanya Ltd.
Metal Tiger holds a 50% stake in Kalahari Metals. Post completion of the acquisition, Metal Tiger said its interest in Kalahari Metals will be diluted to 43.9%. The transaction will value Kalahari Metals, post completion of the acquisition, at USD5.2 million.
The AIM-listed investment company said Kitlanya is a wholly owned subsidiary of Resource Exploration & Development Ltd.
Under the terms, Kalahari Metals has completed USD100,000 of exploration works on the licences held by Kitlanya and will acquire Kitlanya for USD700,000, satisfied by the issue of shares representing 13.4% of Kalahari Metals as enlarged by the acquisition.
The Kitlanya licences comprise five recently granted exploration licences and cover 4,651 square kilometres of exploration tenure in the prospective Kalahari copper belt in Botswana. The five licences have been divided into two project areas, namely Kitlanya West and Kitlanya East.
The acquisition will increase Kalahari Metals' direct land position in the Kalahari belt to 8,594 square kilometres.
Looking ahead, Metal Tiger said it intends to provide further funding to Kalahari Metals to support its drilling in the second quarter of 2019.
"We are delighted that Kalahari Metals has reached an agreement to acquire Kitlanya, which will consolidate its highly prospective exploration interests in the Kalahari copper belt," said Chief Executive Michael McNeilly.
"We intend to demonstrate our continued support for Kalahari Metals and its activities in Botswana through the provision of further funding in due course," added McNeilly.
Metal Tiger shares were trading 0.2% lower on Wednesday at 1.35 pence each.