MTR.L Regulatory News (MTR)

12 Mar 2020 07:00

Metal Tiger plc

("Metal Tiger" or the "Company")

Termination of Acquisition and Joint Venture Agreement, Thailand

Metal Tiger plc (AIM: MTR), the London Stock Exchange AIM listed investor in natural resource opportunities, announces that the Company and its joint venture partner have both mutually agreed to terminate the acquisition and joint venture agreement (the “Agreement”) entered into between Metal Tiger and certain group companies, Kanchanaburi Exploration and Mining Company Limited, Boh Yai Mining Company Limited (“BYMC”) and the majority owner of both companies, Mr. Pornnaret Klipbua. The Agreement was entered into in August 2016.

As noted in the Strategic Report for the year ended 31 December 2018 and subsequently in the interim results for the six months ended 30 June 2019, the Company has been in active discussions with regard to renegotiating the terms of the Agreement, with a view to farming into BYMC in order to facilitate the joint venture to run an exploration drill campaign at Boh Yai lead-zinc-silver mine (“Boh Yai”) . The Company’s understanding from its joint venture partner, was that Mr Klipbua and his team had found a viable option that was compliant with the permitting framework under Thai law, in order to allow for the implementation of exploration/resource drilling at the mine site.

Metal Tiger’s negotiating position was to farm-in for 49% of the project for a commitment to undertake an aggressive 2-year drill campaign without any payments to the joint venture partner. This would have represented a significant capital commitment from Metal Tiger over the next two years, with the potential to increase significantly the viability of Boh Yai. Unfortunately, notwithstanding a significant amount of cost-benefit and sensitivity analysis, economic modelling, downstream processing feasibility work, exploration planning, staffing planning, work undertaken for permitting, and scoping of potential Asian buyers for the project post completion of drilling, the Company was unable to reach terms with Mr Klipbua to accept a deal without an upfront payment. In light of this, as well as the prevailing macro-economic environment, the risk-reward ratio was not acceptable to Metal Tiger given a number of factors, including future allocation of funds to support existing investments, potential future investments and the desire to maintain a strong liquidity profile without the potential need to seek equity financing.

The Board of Metal Tiger (the “Board”) remains convinced of the potential to increase significantly the resource estimates for Boh Yai and all of the work undertaken in this regard remains the intellectual property of Metal Tiger. The Company will be retaining its intellectual property in respect of the project and is open to approaches from, or discussions with, third parties, particularly those that would be willing to explore a joint approach to help capture the project’s potential value. The Board believes the relationship with Mr Klipbua remains a very positive one.

Michael McNeilly, Chief Executive Officer of Metal Tiger, commented:

“Clearly we are disappointed that we were unable to agree acceptable terms given the amount of work undertaken to demonstrate the investment case. With that said, Metal Tiger must look towards the future and take an optimised and moderated risk approach in the balancing of its allocation of funding. The Board is excited by the Company’s portfolio of investments and their potential for significant value accretion. Following Sandfire’s takeover of MOD Resources and the execution of the collar facility, Metal Tiger is a very different company than it was when the Agreement was executed, as is the current the macro-economic climate; it is important that the Board’s investment decisions reflect this evolution. The Board believes that this difficult, but arguably positive decision, will simplify the investment case for Metal Tiger and improve its medium to longer term prospects.”

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:

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, Kalahari copper/silver belt through its interest in Kalahari Metals Limited. 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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