(Alliance News) - Metal Tiger PLC on Tuesday said it has entered an AUD8.2 million financing arrangement with an investment bank, secured over shares in Sandfire Resources NL.
Metal Tiger received 6.3 million Sandfire shares representing approximately 3.5% of Sandfire's enlarged issued share capital in exchange for its entire shareholding in MOD Resources Ltd.
Following receipt of these shares, Metal Tiger entered an equity derivative collar financing arrangement with an undisclosed "global investment bank" as part of an equity option and loan facility.
The finance arrangement is secured over 1.7 million Sandfire shares held by Metal Tiger, equivalent to a 0.9% Sandfire stake.
Under the terms of the agreement, Metal Tiger has entered a stock lending arrangement with the bank, wherein the lender can borrow up to 1.7 million Sandfire shares from Metal Tiger and has the right to sell the Sandfire shares at 80% of their reference price.
This is AUD6.10 per share, the price at which Sandfire shares closed in Sydney on Tuesday.
Further, the lender also has the right to buy the 1.7 million Sandfire share from Metal Tiger in three years at their reference price plus 45%.
Metal Tiger has borrowed AUD8.2 million or GBP4.3 million from the lender, secured on the shares, with the loan maturing December 2022.
Metal Tiger Chief Executive Michael McNeilly said: "Metal Tiger has been very pleased with its investment initially in MOD Resources and now Sandfire Resources. We look forward to executing on our strategy of investing in strategic natural resource opportunities by way of the cash raised through this financing facility and note that the financing is not only cost effective but importantly does not include any share price based triggers."
Shares in Metal Tiger were up 2.5% at 1.23 pence in London on Tuesday afternoon.
By Anna Farley; annafarley@alliancenews.com
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