RE: MTR the place to be22 Jun 2020 16:24
Metal Tiger roars
Shares in Metal Tiger (MTR:2.25p), an Aim-traded investment company primarily focused on undervalued natural resource opportunities, have almost doubled in value since I included them in my 2020 Bargain Shares Portfolio. The re-rating is fully justified.
That’s because the 24 per cent uplift in 2019 year-end NAV per share (from 1.4p to 1.73p) fails to factor in the significant hidden value in Metal Tiger’s conservatively valued assets. Positive new flow from projects in both Australia and Botswana and the commodity price supportive balance sheet expansion of the US Federal Reserve (‘Bull market rules’, 8 June 2020) are creating a tailwind, too.
In particular, expect further upbeat drilling results at the T3 Copper-Silver copper exploration and development project in the Kalahari Copper Belt, Botswana operated by Sandfire Resources (Aus:SFR). Metal Tiger holds 6.29m shares worth A$29.5m (£16.4m) in the Australian Stock Exchange-listed mining and exploration group. Metal Tiger also owns a 62 per cent interest in the nearby Kalahari Metals Project which could be worth three times’ its £3.2m carrying value based on similar transaction values in the area. These are not the only investments with promise.
In the past month, Metal Tiger has subscribed for 2.85m new shares in newly listed Aim-traded Trident Resources (TRR:19.5p), a company that aims to establish a diversified mining royalty stream by constructing a portfolio with a bias towards production or near-production assets. In addition, Metal Tiger has conditionally agreed to invest A$310,000 in Australian Stock Exchange-listed Cobre Pty (Aus:CBEXX) at the IPO price of A$0.20 per share, to lift its holding to 20.9m shares, a stake worth A$4m (£2.2m). Cobre has just commenced its third drilling programme at the Perrinvale copper project in Western Australia with the aim of extending current Volcanic-Hosted Massive Sulphide mineralisation and drill testing new targets.
In addition, Metal Tiger has invested A$250,000 in Aim-traded Thor Mining (THOR:0.35p) to lift its stake to 147m shares, or 11.46 per cent of the minnow’s share capital. Thor has successfully raised money from Australian investors and secured an option to acquire highly prospective US uranium and vanadium exploration projects. Metal Tiger’s chief executive Michael McNeilly believes the outlook for uranium demand in the US is likely to be particularly robust, hence the exposure to the commodity.
I also note positive drilling news from Aim-traded Greatland Gold (GGP: 12.15p) in relation to the Havieron gold-copper discovery in the Paterson region of Western Australia. The project is being developed under a farm-in agreement with a wholly owned subsidiary of Newcrest Mining (ASX: NCM). Shares in Greatland have surged 572 per cent this year, placing a value of £1.1m on Metal Tiger’s shareholding.
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