4 Aug 2016 07:00
Metal Tiger Plc4 AUGUST 2016
Metal Tiger Plc("Metal Tiger" or the "Company")
QUARTERLY ACTIVITIES REPORT
Metal Tiger plc (LON:MTR) the London Stock Exchange AIM listed investor in strategic natural resource projects is pleased to announce its Quarterly Activities Report (“QAR” or the “Report”) covering the period from April to June 2016, and subsequent material activities.
The Report was introduced in Metal Tiger’s Strategic and Operational Update announced to market on 25th February 2016 and will align Metal Tiger with the normal reporting in established resource markets such as the ASX and TSX.
Highlights:
Botswanan JV (30% Metal Tiger): Exploration work including reverse circulation and diamond drilling has continued through the quarter with the Joint Venture now publishing a regular feed of latest assay data. Extensive high grade copper-silver mineralization identified and resource drilling now underway with a view to publishing a maiden resource in the third quarter 2016; Thailand activities (90% Metal Tiger): Advanced negotiations continued in respect of the Boh Yai and Song Toh Silver-Lead-Zinc mines where SEAM, our Joint Venture partner, is seeking to acquire an interest in both projects. Standstill Agreement extended until 20th August to allow completion of due diligence and operational structuring to optimise the transaction for all parties. Nationwide exploration and development programme implemented yielding a significant number of new opportunities; Spanish JV (50% Metal Tiger): acquisition of additional gold focused licences in Extremadura in Joint Venture with our existing partners MEN (Finland). Launch of field exploration campaign focused on gold exploration drilling and further advancement of existing known Tungsten exploration opportunities. Grant of St Cristobel licence within existing Logrosan project; Pipeline: Metal Tiger project pipeline advanced significantly. Opportunities exist in relation to existing countries of operation in Thailand and Spain. In addition the Company has a number of new opportunities under review in Australia, Cambodia, Finland, Ireland and the United Kingdom. Opportunities under review are being considered for inclusion within the Metal Tiger portfolio or for distribution into other AIM and/or ISDX vehicles; Asset Trading – Active investment programme implemented with investments in shares/warrants of Greatland Gold, Goldstone Resources, Red Rock Resources, Conroy Gold, Connemara Mining Company, Thor Mining and Opera Investments. Total of circa £700,000 invested in direct placings with further on/off market purchases undertaken in various resource shares. Post quarter end a £200,000 investment made in shares/warrants of Kolar Gold bringing the total amount invested since the last quarterly report to circa £1.28 million. Significant overall paper gains recorded on the investments made in the quarter. Strong working capital – following continued conversion of warrants, placing (at 4.5p) and gains on the Asset Trading portfolio. Resource sector has experienced a decline in the latter two months however Company working capital (liquid investments and cash) is still circa £4million as at the date of this report.Paul Johnson Chief Executive Office of Metal Tiger said “Metal Tiger continues to advance its business model at a tremendous pace, in line with our stated observations of a recovering natural resource sector and the need to act promptly to broaden and consolidate interests whilst opportunities remain available at lower priced entry levels.
We have been delighted with the exploration progress in Botswana where our partners MOD Resources (ASX:MOD) have made a significant copper-silver discovery and the continuing exploration data is extremely positive. When considering that the discovery at T3 represents only one of numerous targets there is good reason to be excited.
In Thailand our partners South East Asia Mining have launched a nationwide business development programme and are building their geological knowledge and strategic interests at a phenomenal pace. We also continue to progress our negotiations with regard to two silver-lead-zinc mines and the metal production opportunity they offer.
Our Spanish interests continue to develop and when reviewing the overall exploration data in and around our Joint Venture interests we are extremely excited at the prospect of accelerating operations and the potential for new discoveries.
Asset Trading has experienced a highly exciting quarter with the investment in numerous listed resource companies where our shareholders have double exposure through equity and warrant interests. More innovations in our investing approach can be expected in the current quarter as we look to build our diverse investment portfolio at this strategically exciting time in the natural resource sector recovery phase.
Metal Tiger is growing its various interests at pace. The Company needs to be disciplined and focused as we move forward, as we seek to bolster our market recognition and investor engagement. The two years since we formed Metal Tiger have seen substantial growth, but if we manage our business effectively the Board believe the next two years offer considerably more opportunity as our interests mature and fuller valuations are encountered.”
Botswana – Copper/Silver
Metal Tiger holds a 30% direct interest in 14 licences prospective for Copper and Silver in the Kalahari Copper Belt (“KCB”) within Botswana. The balancing 70% is held by our Joint Venture partners MOD Resources (ASX:MOD).
In addition, Metal Tiger currently holds 67,833,333 shares in MOD resources which represents 4.76% of MOD’s issued share capital. In valuation terms this holding equates to just over £1million and increases the total interest in the KCB project to approximately 33%. Furthermore Metal Tiger holds 29,166,666 options in MOD with an exercise price of A$0.01 and 1,541,667 options at a price of A$0.06. The former warrants are now considerably in-the-money with the current share price of MOD sitting at A$0.27.
Further information for investors in respect of the Company’s investment in Botswana can be sourced on the Company’s website at: http://metaltigerplc.com/index.php/projects-2/botswana-copper-silver
In addition, the Company will this week publish a Q&A in respect of Botswana to assist investors understanding of the rationale for our investment and the potential opportunity.
The quarter has been a particularly active period, with extensive Reverse Circulation and Diamond drilling being undertaken at the projects. Metal Tiger has released parallel announcements in line with news releases provided by MOD Resources.
Interest in the Botswanan investment increased considerably with the publication of significant copper intersections in the announcement of 14 April 2016 including 52m at 2% copper with high grade silver.
As the assay data has been received and incorporated into MOD’s conceptual open-pit model the commercial viability of the project has significantly strengthened. The interest of the market has been understandably buoyed by the publication of consistently strong assay data, including a further 28m at 1.76% copper on 20 May 2016, 29m at 1.8% copper on 6 July 2016 and 45.5m at 2.0% copper on 2 August 2016. In addition to significant intersections the drilling has also encountered bonanza grade mineralisation including up to 45.4% copper announced on 11 July 2016.
The results published to date have been derived from the T3 target area and there is increasing evidence of a substantial Copper-Zinc resource situated at T3. The Joint Venture partners have identified numerous other targets and in particular regional soil sampling announced on 13 July 2016 identified two further significant targets which will be drill tested in the near future.
Metal Tiger recognises investor interest in MOD resources and also in the price movements of MOD shares on the ASX. The recent Rights Issue by MOD, at A$0.24 has, in the opinion of the Board, acted as a drag on the MOD share price and reduced the correlation between its share price and the news released to the market.
The Rights Issue, in which Metal Tiger took up their entitlement, as announced by MOD on 18 July 2016, closed heavily oversubscribed demonstrating a high level of interest in MOD and by definition the project itself. Therefore, it is reasonable to assume that the impact of the Rights Issue on MOD has largely passed and we expect to see the market interest in MOD adjusting and the re-establishment of more normalised trading patterns.
Further regular and frequent updates are anticipated in respect of the project during the current quarter and with resource drilling underway the Joint Venture partners are hoping to produce a material JORC compliant resource and publish this to market during the third quarter 2016.
We note the tremendous professionalism of the team on the ground in Botswana and the unparalleled support offered to the Joint Venture by the local, regional and national government. Botswana has publicly stated its support for foreign direct investment to develop its resource industry and we are delighted to confirm that we have received robust governmental support for our work in-country.
The considerable interest shown in the project by third parties continues, in line with market announcements. Metal Tiger remains keen to work alongside partners MOD resources and rapidly build the geological database and maiden Mineral Resource statements. However where relevant the partners engage with and assist parties expressing an interest in the project. Should any of the expressions of interest advance to more formal proposals the partners would seek to update the market at the earliest opportunity.
Thailand – Copper/Gold/Antimony/Silver/Lead/Zinc
In Thailand Metal Tiger owns 90% of South East Asia Mining (“SEAM”) which is our Joint Venture partner for the development of the Company’s interests in-country.
Thailand represents a unique opportunity for Metal Tiger. Despite the wealth of geological potential, the country is not yet on many investor’s radars as a viable proposition for mining investment. This plays to Metal Tiger’s contrarian strengths, and we have been actively building our Thai business to take advantage of the opportunity available. The advantage of our position is that we invest in the country through a team that has extensive and diverse experience of living and working in Thailand. As a result, the team have a good understanding of the real challenges and are not overtly affected by what the wider world considers to be the problem areas derived commonly from selected news and articles produced outside Thailand that are largely not reflective of fact or the real dynamic in-country and on the ground.
We have undertaken a recruitment drive in recent months to expand our team and have focused on the recruitment of Thai nationals in Bangkok, and around Thailand, to increase our mapping capability and field geological teams, enhance our office administration and to select Thai nationals who will be the first participants on our Thai internship programme where Metal Tiger will be bringing two interns to work in London with the Company and its key partners.
Our team in Bangkok are moving into larger offices, albeit having negotiated a rental agreement that represents only a slight increase on the cost of two offices we are incurring at the current location.
Business in Thailand is very much forged around the principle of respect for the Thai people and ensuring that the protection of the environment and the Thai community is a primary objective. That is the case with Metal Tiger and we would point to the recruitment of a Corporate Social Responsibility Manager as outlined below in this regard.
We are cognisant of the fact that as an investor in Thailand we are helping to develop Thai resources, for the Thai people. And whilst this may be a rather obvious statement, the same principle would surely be applied to the operations and investments of foreign companies in any jurisdiction.
With regard to progress achieved; on 9 May 2016 we announced a Strategic Special Prospecting Licence Application expansion bringing a new copper target area in Prachinburi into the portfolio of SEAM interests; and a 45 day due diligence and standstill agreement was also announced on 13 June 2016 in respect of the Mae Yom polymetallic prospect in Phrae Province. This standstill agreement has now been extended by a further 30 days to allow additional data to be received and reviewed. Both opportunities were borne from our extensive in-country review, and further information will be provided about both in due course. Of note the two announcements represent only a small proportion of our recent work and we anticipate further newsflow will follow as a number of other initiatives are matured.
The attention of the market, understandably, has been on the standstill agreement announced on 11 April 2016 in respect of the Boh Yai and Song Toh silver-lead-zinc mines in Kanchanaburi Province, Western Thailand. Here SEAM are seeking to secure a material interest in the mines and thereafter to work on the mine permitting process and post permitting on the refurbishment necessary to bring both mines back into profitable production.
Recognising the in-situ resource at the mines, and with due regard to the processing capacity of the mine it is currently believed that, subject to applicable technical studies, the mines could operate from existing resources for in excess of a decade. It is considered that with further successful regional exploration, and notably within licence areas covered by SEAM’s first ranking licence applications, then the life of mines could be considerably increased. Should an interest in the mines be secured, Metal Tiger will ensure the appropriate technical studies are completed ahead of, and to guide, mine investment decisions.
With the potential for many decades of operation it is vital that the structure of the transaction be optimised, for the benefit of all parties. To this end we agreed with the vendors an extension of the standstill agreement until 20 August 2016 to allow our combined structural work to be finalised.
Moreover, during the course of our discussions we have been working closely with the mines vendors to plan in detail for the permitting process and the process of refurbishment to ensure that when the formal agreements are reached all parties can see a smooth and efficient process to bring the mines back into production.
Wrapped around and embedded within all the work we have undertaken together with the vendors, is a comprehensive programme of work to carefully assess and manage the impact of the mines, and future production, on the environment and the community. We are also ensuring we capture the socio-economic benefit of production recommencing to ensure that operations can be planned to properly benefit the local and national Thai economy.
All our work is being conducted diligently including with due regard for commercial sensitivities as is the case for any commercial discussions. However, pending completion of the mine agreement with the vendors, we will be providing numerous opportunities for enquiries to be addressed including with regard to environmental and community matters. This open consultation will be for the Thai people, workers, contractors and community who will be affected by the mine rehabilitation plans. We will also provide opportunities for consultation and feedback sessions with UK investors and other interested parties, reflecting correctly the need for investors to be assured that Metal Tiger is giving proper regard to important corporate social responsibility matters.
We anticipate a regular and frequent stream of news in respect of Thai developments, commencing in the near term.
Spain – Tungsten/Gold
Metal Tiger has a 50% interest in the Logrosan (tungsten/gold) and Maria Gold projects, with joint venture partners MEN Finland. In 2015/early 2016 Metal Tiger paid €500,000 to secure an original interest in the Logrosan Project and on 31 May 2016 announced the expansion of the wider Joint Venture to include the Maria gold licence with a further €500,000 committed to secure the additional Maria Gold Project (€100,000 already paid and a further €400,000 due over the balance of 2016 and 2017).
With the major Botswanan copper discovery and the rapid developments in Thailand investor’s focus may have been diverted from the work being conducted in Spain. Despite this market perception, work in Spain has continued at pace and drilling has been undertaken across the Company’s interests at Maria.
We anticipate a full Spanish update will be provided in the near term in respect of exploration work during 2016 and also highlighting the significance of that data for the rapid development of our Spanish interests.
Board members from Metal recently conducted a two day visit with the MEN Finland team during which we discussed the Spanish data in detail and it is absolutely clear that our work has identified numerous highly exciting and prospective opportunities. The award of the St Cristobel licence as announced on 19 July 2016 was also another positive which further adds to the development potential of the portfolio.
Corporate Social Responsibility (“CSR”)
Metal Tiger is primarily focused on building a sustainable business. Sustainability means the projects and opportunities we engage with are able to continue over an extended period of time with all due regard to environmental and social factors.
We recognise the importance of action rather than merely words and announced on 18 July 2016 the appointment of a CSR manager whose remit would include a full scale review of Metal Tiger’s global social and environmental policies.
CSR matters are country and region dependent and the CSR manager’s role will include a dedicated review and implementation of CSR and Environmental Sustainability programmes in Thailand focusing on the areas where Metal Tiger is investing and where operations are anticipated.
We will be communicating in further detail on our important work in this area. With regard to Thailand as commercial transactions are finalised we will provide the opportunity for local stakeholders, and specifically all those potentially impacted by our work, to liaise with the Company and seek the reassurance needed that we are approaching exploration, development and mining in sustainable manner. We will extend this review to include shareholders, investors and other interested parties in the UK who rightly have a desire to ensure they invest in a Company with a serious and committed approach to sustainability.
Asset Trading
The Board of Metal Tiger considered earlier in 2016 that the recovery phase for the natural resource sector was underway albeit in the early stages of recovery. This view led us to consider ways to build positions in the sector as rapidly as possible.
Our Metal Projects division now has three significant interests in Botswana, Thailand and Spain. Metal Tiger has additional project interests within the Company and building within the Company’s pipeline. In respect of the pipeline a number of projects and initiatives have required an element of nurturing and maturing before forming part of the Metal Tiger portfolio or indeed being moved into a third party vehicle.
If we assume that significant Metal Projects represent a slightly longer route to value generation an efficient route to acquiring a more diverse set of resource investments was to participate in placings with listed resource companies and the second quarter of 2016 saw the acceleration of this investing approach. Since 1 April 2016 we have invested (figures rounded):
£150,000 into Greatland Gold (LON:GGP) £100,000 into MOD Resources (ASX:MOD) £125,000 into Goldstone Resources (LON:GRL) £225,000 into Red Rock Resources (LON:RRR) £178,000 into Conroy Gold (LON:CGNR) £100,000 into Connemara Mining (LON:CON) £150,000 into Thor Mining (LON:THR), £50,000 into Opera Investments (LON:OPRA) and £200,000 into Kolar Gold (LON:KGLD).The total amount invested since the start of the second quarter equates to approximately £1.28 million with the vast majority of investments being direct investee company placings with Metal Tiger receiving equity and one for one warrants to subscribe for further equity. Full details of each transaction are provided within individual market announcements.
Within this quarter Metal Tiger has therefore been able to diversify its resource stock holdings exposing our shareholders to material upside should the recovery in the sector continue and the value of our Asset Trading portfolio rise accordingly.
We are continuing to identify new opportunities for our Asset Trading division and anticipate further announcements in this area in the near term.
Strategic Planning
Metal Tiger continues to be well placed within the natural resource sector and in a prime position to benefit as the recovery ensues. The current structure of the business will remain for the foreseeable future as:
Metal Projects – investments made to acquire and support projects on the ground with operating joint venture partners
Asset Trading – investments in listed resource equities, warrants, royalties and other tradable financial instruments related to the natural resource sector.
Metal Tiger’s pipeline of new Metal Projects and Asset Trading opportunities is extensive. We will shortly be forming a new vehicle to manage this pipeline more efficiently to ensure we do not miss out on valuable opportunities.
Within Metal Projects in particular we are seeking to build a portfolio of interests that will grow rapidly and where the value generated can be distributed to shareholders through dividends or other distributions.
Our PLC technical team continues to grow and we anticipate the announcement of the Company’s new Chief Technical Officer shortly. Moreover, we are about to recruit a GIS Database Manager to provide technical data oversight for our investments across all Metal Projects.
Finance and Working Capital
Metal Tiger is well funded and is actively utilising funding to generate profitable returns internally rather than placing entire reliance on the availability of market finance.
The Company currently has a spread of cash and listed resource equities and related financial instruments. At present, and even after discounting proactive investing expenditure and a recent pullback in the valuation of resource equities (pullbacks regularly occur during the recovery phase in the market) Metal Tiger has circa £4m of working capital (liquid investments and cash) and is therefore in a robust financial position.
For further information on the Company, visit: www.metaltigerplc.com:
| Paul Johnson (ChiefExecutive Officer) | Tel: +44 (0)7766 465 617 | |||||
| Terry Grammer (Non-Executive Chairman) | Tel: +44 (0)207 099 0738 | |||||
| Sean Wyndham-Quin | Spark Advisory Partners Limited | Tel: +44 (0) 2033 683 555 | ||||
| Neil Baldwin | (Nominated Adviser) | www.sparkadvisorypartners.com | ||||
| Nick Emerson | SI Capital | Tel: +44 (0) 1483 413 500 | ||||
| Andy Thacker | (Sole Broker) |
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Notes to Editors:
Metal Tiger plc is listed on the London Stock Exchange AIM Market (“AIM”) with the trading code MTR and invests in high potential mineral projects with a precious and strategic metals focus.
The Company’s target is to deliver a very high return for shareholders by investing in significantly undervalued and/or high potential opportunities in the mineral exploration and development sector timed to coincide, where possible, with a cyclical recovery in the exploration and mining markets. The Company’s key strategic objective is to ensure the distribution to shareholders of major returns achieved from disposals.
Metal Tiger’s Metal 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. In Spain Metal Tiger the Company has tungsten and gold interests in the highly mineralised Extremadura region. In Thailand Metal Tiger has expanding interests over licences, applications and critical historical data covering antimony, copper, gold, silver, lead and zinc opportunities.
The Company has access to a diverse pipeline of new opportunities focused on the natural resource sector including physical resource projects, new natural resource centred technologies and resource sector related fintech opportunities. Pipeline projects deemed commercially viable may be undertaken by Metal Tiger or by an ISDX or AIM partner with whom the Company is engaged.
Metal Tiger also has an Asset Trading Division that holds various financial instruments for trading purposes including equities, warrants and royalty income. The aim of the division is to generate profits to reinvest into the Company’s project based activities.
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