17 Dec 2019 07:00
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Metal Tiger plc
("Metal Tiger" or the "Company")
Completion of financing arrangement secured against investment in Sandfire Resources NL
Metal Tiger plc (AIM:MTR), the London Stock Exchange AIM listed investor in strategic natural resource opportunities, is pleased to announce that, following the receipt of 6,296,990 new ordinary shares in Sandfire Resources NL (ASX:SFR) (“Sandfire”), announced on 23 October 2019, it has entered into an equity derivative collar financing arrangement (“Financing Arrangement”) with a global investment bank (the “Lender”) pursuant to an Equity Option and Loan Facility (the “Umbrella Facility”).
The Financing Arrangement is secured over 1,675,125 of the ordinary shares in the capital of Sandfire (“Sandfire Shares”) held by Metal Tiger (the “Security”), representing approximately 0.9% of Sandfire’s issued share capital.
Under the terms of the Financing Arrangement, Metal Tiger has:
entered into a stock lending arrangement with the Lender, pursuant to which the Lender (or an affiliate of the Lender) can borrow up to 1,675,125 Sandfire Shares from Metal Tiger;obtained the right (but not the obligation) to sell 1,675,125 Sandfire Shares to the Lender in three years’ time at 80% of the reference price, being A$6.10 (subject to customary adjustments) (the “Reference Price”) (the “Put”);granted the Lender the right (but not the obligation) to buy 1,675,125 Sandfire Shares from Metal Tiger in three years’ time at an agreed premium of 145% of the Reference Price (the “Call”); andborrowed A$8,174,610 from the Lender secured on the combination of the above with a maturity date of 16 December 2022 (the “Loan”).Metal Tiger has the right to elect to settle the Put and the Call by way of physical delivery of Sandfire Shares or by way of a cash payment reflecting the value of the Put and Call at the time.
Costs of approximately A$0.675m associated with the financing arrangements (inclusive of all interest obligations and the net cost of the equity derivative collar for the term of the initial Financing Arrangement) have been deducted from the Loan proceeds of approximately A$8.175m to leave Metal Tiger with A$7.5m of cash proceeds to fund:
- Metal Tiger’s proposed share buy back (announced on 15 October 2019 and approved by Metal Tiger’s shareholders at a general meeting of the Company on 6 November 2019);
- Metal Tiger’s participation in the Cobre IPO (as per the Metal Tiger announcement dated 20 November 2019);
- existing and new public and private investments; and
- general working capital requirements.
Metal Tiger can agree with the Lender to utilise the balance of Sandfire Shares held by it to increase the size of the Financing Arrangement at a later date. If the total Loan balance outstanding on 30 June 2020 is less than A$20m, Metal Tiger will be required to pay a commitment fee (“Commitment Fee”) to the Lender, the maximum Commitment Fee payable by Metal Tiger is A$118,254.
Commenting on the financing arrangements, Mr Michael McNeilly, Chief Executive Officer of Metal Tiger, said:
"Metal Tiger has been very pleased with its investment initially in MOD Resources Ltd and now Sandfire Resources NL. 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.”
This announcement contains inside information for the purposes of the market abuse regulation (EU No. 596/2014) (“MAR”).
For further information on the Company, visit: www.metaltigerplc.com:
Enquiries:
Michael McNeillytf | (Chief Executive Officer) | Tel: +44 (0)20 7099 0738 |
Mark Potter | (Chief Investment Officer) | Â |
Richard Tulloch James Dance Jack Botros | Strand Hanson Limited (Nominated Adviser) | Tel +44 (0)20 7409 3494 |
Gordon Poole James Crothers Monique Perks | Camarco (Financial PR) | Tel: +44 (0)20 3757 4980 |
Notes to Editors:
Metal Tiger plc is admitted to the AIM market of the London Stock Exchange AIM Market ("AIM") with the trading code MTR and invests in high potential mineral projects with a base, precious and strategic metals focus.
The Company's target is to deliver a high return for shareholders by investing in significantly undervalued and/or high potential opportunities in the mineral exploration and development sector. Metal Tiger has two investment divisions: Direct Equities and Direct Projects.
The Direct Equities Division invests in undervalued natural resource companies. The majority of its investments are listed on AIM, the TSX and the ASX, which includes its 3.5% interest in Sandfire Resources NL (ASX: SFR). The Company also considers selective opportunities to invest in private natural resource companies, typically where there is an identifiable path to IPO. Through the trading of equities and warrants, Metal Tiger seeks to generate cash for investment in the Direct Projects Division.
The Direct Projects Division is focused on the development of its key project interests in Botswana, Spain and Thailand. In Botswana, Metal Tiger has a growing interest in the large and highly prospective Kalahari copper/silver belt through its interest in Kalahari Metals Limited. In Spain, the Company has tungsten and gold interests in the highly mineralised Extremadura region. In Thailand, Metal Tiger has interests in two potentially near-production stage lead/zinc/silver mines as well as license applications and critical historical data covering antimony, copper, gold, lead, zinc and silver opportunities.
The Company actively assesses new investment opportunities on an on-going basis and has access to a diverse pipeline of new opportunities in the natural resources and mining sectors. For pipeline opportunities deemed sufficiently attractive, Metal Tiger may invest in the project or entity by buying publicly listed shares, by financing privately and/or by entering into a joint venture.
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