Metal Tiger plc UK Regulatory Announcement: Posting of Annual Report and Notice of Annual General Meeting (“AGM”)

LONDON–(BUSINESS WIRE)– 

Metal Tiger plc

(“Metal Tiger”, the “Company” or the “Group”)

Audited results for the year ended 31 December 2019

Posting of Annual Report and Notice of Annual General Meeting (“AGM”)

Proposed Share Consolidation

Metal Tiger plc (LON: MTR), the London Stock Exchange AIM listed investor in natural resource opportunities, is pleased to announce its audited results for the year ended 31 December 2019.

Highlights:

  • Sale of the Group’s 30% interest in Botswana joint venture with MOD Resources Limited (“MOD”) to MOD, for shares and royalty interests generating a profit of £3.3million, pursuant to Sandfire Resources Limited’s (“Sandfire”) takeover of MOD.
  • Received 6,296,990 shares in Sandfire, representing a 3.5% stake in Sandfire, in exchange for the Company’s shares in MOD.
  • Within the Project Investments division, in Botswana, the Company’s joint venture, Kalahari Metals Limited (“KML”), intersected wide zones of copper mineralisation from diamond drilling at its Okavango Copper Project.
  • Strong performance from Equity Investments division, reporting a profit of £5.0million (before administration and interest costs), including dividends from Sandfire of £527,000.
  • Equity Investments division investments during the year included an initial A$0.5million investment in Cobre Limited (“Cobre”), an Australian copper exploration company, with a further A$2.4million investment at the year end into Cobre’s IPO on the ASX.
  • Raised £2.8million (net) through two placings at a price of 1.45p per share.
  • Draw down of £4.2million of new financing under an equity derivative collar financing arrangement with a global investment bank.
  • Net current assets at the year end of £21.7million including a cash position of £5.0million.
  • Profit for the year before taxation of £4.5million (2018: loss £4.0million).

Post Period:

  • Initial drilling programme at Cobre’s Perrinvale Project commenced, confirming high grade VHMS mineralisation. Subsequent studies have identified further drill targets that will be the subject of Cobre’s ongoing 6,000m drilling campaign.
  • Completed investment of A$2.2million into ASX listed South Korean gold explorer, Southern Gold Limited, resulting in a 17.1% stake in the company.
  • KML commenced drilling at Kitlanya East but exploration activities were suspended due to government restrictions related to COVID-19.
  • Sandfire, of which the Company currently owns 3.6%, completed an A4 Dome exploration drilling campaign, demonstrating encouraging results in a location near to KML’s licences. Sandfire is now working towards a maiden resource for the A4 Dome, which is likely to have a material impact on the valuation of the 2% net smelter royalty held by Metal Tiger.
  • Invested a total of £570,000 into Trident Resources plc, a diversified mining royalty and streaming company.

Posting of Annual Report, Notice of AGM and proposed Share Consolidation

The Annual Report and Accounts for the year ended 31 December 2019 will be available shortly to view and download from Metal Tiger’s website (www.metaltigerplc.com/investors/financial-reports-accounts), along with the notice of Annual General Meeting (“the Notice”). Copies of the abovementioned documents will be posted next week to shareholders.

The AGM will be held at 10:00am on 30 June 2020 at Higher Shalford Farm, Shalford Lane, Charlton Musgrove, Wincanton, Somerset BA9 8HF. Following the restrictions placed on public gatherings under the Coronavirus Act 2020 by the Government of the United Kingdom, shareholders are strongly urged not to attend the meeting in person but to vote by proxy, submitting such votes not later than 10:00am on 26 June 2020. The Company has implemented electronic voting and full instructions, including how to request a paper proxy form, are set out in the Notice.

As set out in the Notice, the Board is proposing a 1 for 10 consolidation in the ordinary shares of the Company. The number of shares the Company currently has in issue is considerably higher than that of the majority of companies on AIM with a similar market capitalisation and the Board believes that this, which results in a share price quoted in single pence, affects investor perception and share price volatility. Accordingly, the primary objective of the proposed share consolidation is to reduce the number of ordinary shares to a level which is more in line with other comparable AIM-traded companies and thereby creating a higher share price per ordinary share.

The Board believes that this will improve the marketability of the Company’s ordinary shares by way of a higher share price and hopes that, by narrowing the spread of its bid offer price, it will reduce the volatility in the Company’s share price.

Expected Timetable of Principal Events

Announcement of the Share Consolidation

29 May 2020

Publication of Notice and form of proxy

29 May 2020

Latest time and date for receipt of forms of proxy for use at the AGM

10:00am on 26 June 2020

AGM

10:00am on 30 June 2020

Share Consolidation record date

5:00pm on 30 June 2020

Admission of New Ordinary Shares to trading on AIM and crediting of CREST accounts with New Ordinary Shares

8:00am on 1 July 2020

Definitive share certificates (where applicable) expected to be despatched

By no later than 15 July 2020

Notes:

1. References to time are to London time unless otherwise stated. Each of the dates in the above timetable is subject to change at the absolute discretion of the Company and its nominated adviser, Strand Hanson Limited, without further notice.

2. If any of the details contained in this timetable should change, the revised times and/or dates will be notified by means of an announcement via a regulatory information service.

3. Certain of the events in this timetable are conditional upon, inter alia, the approval of the Resolutions to be proposed at the General Meeting.

Key Statistics

Number of Existing Ordinary Shares

1,522,076,607

Share Consolidation Ratio

10:1

Number of New Ordinary Shares in issue following the Share Consolidation

152,207,661

ISIN of the Existing Ordinary Shares

GB0030493232

ISIN of the New Ordinary Shares

GB00BMQC0691

SEDOL of the Existing Ordinary Shares

3049323

SEDOL of the New Ordinary Shares

BMQC069

Michael McNeilly CEO of Metal Tiger stated:

The sale of our interests in our MOD joint venture and the subsequent sale of MOD to Sandfire represented a critical turning point for the Company. It has facilitated further exciting new investments, increased our liquidity and increased our asset value. Further, the sale has given the Company immediate cash flow in the term of Sandfire dividends, but also a look through to potential long term cash flow in the form of a 2% net smelter royalty over the old MOD/Metal Tiger JV ground covering circa 8,000 km2.

“This deal, together with the new share issues during 2019 have meant that we have been able to acquire investments in Cobre and Southern Gold and to continue funding our interests in KML, thereby increasing our portfolio diversity whilst retaining our high-impact interest in exciting jurisdictions such as the Kalahari Copper Belt.”

Qualified Person’s Statement

The technical information contained in this announcement has been read and approved by Mr Nick O’Reilly (MSc, DIC, MAusIMM, FGS), who is a qualified geologist and acts as the Qualified Person under the AIM Rules – Note for Mining and Oil & Gas Companies. Mr O’Reilly is a Principal consultant working for Mining Analyst Consulting Ltd which has been retained by Metal Tiger PLC to provide technical support.

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:

Michael McNeilly

(Chief Executive Officer)

Tel: +44 (0)20 7099 0738

Mark Potter

(Chief Investment Officer)

 

Richard Tulloch

James Dance

Jack Botros

Strand Hanson Limited (Nominated Adviser)

Tel +44 (0)20 7409 3494

 

Paul Shackleton

Steve Douglas

Arden Partners plc (Broker)

Tel: +44 (0)20 7614 5900

 

Gordon Poole

James Crothers

Hugo Liddy

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: Equity Investments and Project Investments.

Equity Investments invests in undervalued natural resource companies. The majority of its investments are listed on AIM, the TSX and the ASX, which includes its interest in Sandfire Resources Limited (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 for the Project Investments division.

Project Investments is focused on the development of its key project interests in Botswana, where Metal Tiger has a growing interest in the large and highly prospective 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.

CHAIRMAN’S STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2019

I am pleased to present the Group’s annual report and audited financial statements for the year ended 31 December 2019

One of the foundational pillars of the Board’s strategy for the last several years has been about making the best possible decisions to ensure continued access to capital in order to maintain, defend and ultimately partially crystalise the value of the Company’s position in the 30% joint venture with MOD Resources Limited (“MOD”).

In carrying out this strategy the Board considered many factors, including, but not limited to, short/long term commodity outlooks, short/long term market conditions, local risks, development and exploration costs and timelines, capital requirements, the copper M&A environment and the general corporate position of the Company.

A partial realisation of this strategy resulted in late 2018 with the sale of the Company’s interest in the T3 project to MOD. In 2019, this was followed up with the sale of our remaining interests in the MOD joint ventures to MOD, helping to facilitate the ultimate acquisition of MOD by Sandfire Resources Limited (“Sandfire”). Our two placings, during February and March 2019 raised, in aggregate a net £2,773,000, and allowed the Company, inter alia, to invest additional capital acquiring MOD shares to maintain its position. Pursuant to Sandfire’s subsequent takeover of MOD, Metal Tiger exchanged its interests in MOD (including ordinary shares, cashless exercise options and interest in the MOD joint venture) for a 3.5% stake in Sandfire.

The operating profit for the year, amounting to £4,398,000 is principally due to the sale of our interest in the T3 project, the gains made in MOD (as crystallised by Sandfire’s takeover), and, subsequently, the mark-to-market gain on Sandfire’s share price performance towards the end of the year.

The net proceeds from two placings also allowed the Company to make a further US$1.1million investment in Kalahari Metals Limited (“KML”). The Board continues to consider that the Kalahari Copper Belt in Botswana remains largely under-explored and believes that the T3 discovery and recent outstanding results at the A4 Dome (announced by Sandfire in April 2020, which included 18m at 5.2% Cu and 124g/t Ag from 77m down-hole has resulted in a paradigm shift in terms of the potential for exploration success. The Board is excited by this and hopes that it will open up the possibility that the grade and tonnage required for larger copper producers may exist in a form in the ground that can be mined economically and with vast scale.

In December 2019, the Board negotiated an equity derivative collar financing arrangement with a global investment bank, pursuant to which the Company drew down £4,224,000 of new financing before fees and interest, allowing a further investment of £1,272,000 (A$2,400,000) to be made into Cobre Limited’s (“Cobre”) IPO, resulting in Metal Tiger holding a 19.98% stake in that company on admission to trading on the ASX in January 2020, diversifying the Group’s portfolio, which was heavily weighted towards Botswana and copper. Cobre is an ASX listed company with copper, zinc, gold and silver projects in Western Australia. Since the year end, the Company has also made a number of further investments, details of which can be found in the Strategic Report.

As the Board looks to the future, there will be an increased focus on larger liquid (or with a pathway to liquidity) high conviction earlier stage investments with a medium to long investment timeframe and where we can obtain Board representation. On the less active front the Board is winding down legacy positions and will be focusing on diversifying into shorter/medium term lower risk investment opportunities to balance risk profiles against earlier stage investments.

It is important to note that the Company’s key strategy remains to make the right longer term decisions regarding its investments, both individually based on their evolving merits, but also in the context of the Company as a whole. Sometimes, those decisions mean walking away from investments and to this end, during the year, we effectively ceased an active interest in our Spanish joint venture and, since the year end, have terminated our joint venture in Thailand where we were unable to reach a satisfactory agreement with our joint venture partner. Our other direct interests in Thailand remain on a care-and-maintenance basis at present.

A key challenge of the Company remains finding suitable investments where it can properly implement its strategy given its relative size and limited access to finance on suitable terms. We continue to seek opportunities, be that through new or further investments or divestments of existing investments, to create shareholder value.

COVID-19 has clearly made an impact on the overall immediate value of our investment portfolio, which will limit the opportunity for new investment in the short term but also gives opportunities for further strategic investment if appropriate. Further details of our response to the current situation are set out in the Strategic Review.

Our Annual General Meeting this year will be constrained by the extent that the Government has lock-down provisions in place. We have taken the decision that the meeting must be held in line with Government advice and therefore members will not be allowed to attend in person and I would encourage shareholders to vote by proxy in advance of the meeting. Details of how to do so are set out in the notice of meeting at the end of this Report and Accounts.

Shareholders will note from the notice of meeting, that the Board is proposing a 1 for 10 consolidation in the ordinary shares of the Company.

The number of shares the Company currently has in issue is considerably higher than that of the majority of companies on AIM with a similar market capitalisation and the Board believes that this, which results in a share price quoted in single pence, affects investor perception and share price volatility. Accordingly, the primary objective of the proposed share consolidation is to reduce the number of ordinary shares to a level which is more in line with other comparable AIM-traded companies and thereby creating a higher share price per ordinary share.

The Board believes that this will improve the marketability of the Company’s ordinary shares by way of a higher share price and hopes that, by narrowing the spread of its bid offer price, it will reduce the volatility in the Company’s share price.

It is with great sadness that I have to report the passing of Terry Grammer on 18 May 2020 after a short period of illness. Terry was both a colleague and a friend to all who worked at Metal Tiger and will be sorely missed. Many shareholders will have been fortunate to have met him over the years. Terry had been part of Metal Tiger since 2014 and a guiding hand in its development. During Terry’s tenure as Non-Executive Chairman and subsequently Non-Executive Director the Company has grown from a market capitalisation of £2million into a company with a market capitalisation of £27million. It was Terry’s foresight that Metal Tiger made the initial investment into Botswana in partnership with MOD Resources. This investment has gone from strength to strength and will be a legacy to Terry’s ability to identify truly outstanding mineral investment projects. Metal Tiger is today, a very different company, to when Terry first became involved. He now leaves behind a company that is well positioned with significant investments in copper, gold and other metals in Botswana, Australia and South Korea.

I will take this opportunity to thank all our shareholders, business partners and staff for their continued support of the Company as we look to the continuing development and evolution of the Group.

Charles Hall

Chairman

29 May 2020

CHIEF EXECUTIVE OFFICER’S COMMENTARY

FOR THE YEAR ENDED 31 DECEMBER 2019

I am pleased to present the audited results for the year ended 31 December 2019. Alongside the financial statements and supporting notes, a full review of business activities during the year is provided within the Strategic Report.

Given that the results are for the period ended 31 December 2019, they reflect a historical position in terms of the Group’s progress and indeed its financial position. Accordingly, to assist, we have included within the Strategic Report further information on the key events post year end.

The Board believes that 2019 represented a critical turning point for the Company. Following an initial indicative offer in January 2019 for MOD by Sandfire Resources NL (now Sandfire Resources Limited) (ASX: SFR) at A$0.38 per share, the Board moved rapidly to obtain critical funding for the business, in a round that was supported by Sprott Capital Partners LP and Sprott Global Resource Investments, renowned natural resources investor Rick Rule, other existing shareholders and new investors. This funding enabled Metal Tiger to acquire MOD shares and maintain its equity position in MOD, without needing to exercise its cashless option, and enabled the Company to continue to contribute towards the 30% Botswanan exploration joint venture.

The sale and purchase agreement negotiated and executed with MOD in 2018 (and described in the financial statements for the year ended December 2018) saw Metal Tiger with a substantial equity and cashless option position in MOD and crucially Board representation. The Company was actively involved with the evaluation and execution of the conditional recommended offer from Sandfire at an effective offer price of A$0.45 per MOD share received on 25 June 2019 . The transaction completed in October 2019 with Metal Tiger ultimately receiving 6,296,990 new ordinary shares in Sandfire representing approximately 3.5% of the company.

In order to facilitate the consummation of the deal the Board of Metal Tiger agreed to take all its consideration in shares. As part of the acquisition, MOD exercised its option to acquire Metal Tiger’s 30% of the exploration joint venture which, in accordance with pre-agreed documentation, resulted in Metal Tiger obtaining a 2% net smelter royalty over the Tshukudu Exploration Botswana (Pty) Limited (“Tshukudu Exploration”) properties and interests which cover approximately 8,000km2 of prospective land. The Board believes that this royalty has the potential to significantly increase in net present value, especially given encouraging, although early, assay results released from Sandfire on the A4 Dome which sits just 8km away from the T3 project.

During my tenure on the Board of MOD, as a representative of Metal Tiger but also MOD shareholders at large, I repeatedly had to balance the potential conflict of interest of ensuring the best outcome for all MOD shareholders whilst also ensuring the best outcome for Metal Tiger shareholders. I am pleased to say that the outcome was I believe ultimately desirable for both.

The first half of 2019 saw a sharp increase in the copper price from lows in early January with the price hitting highs in April followed by a sharp decrease in the copper price which started in May, largely coinciding with the US stating that it would implement increased tariffs from 10% to 25% on US$200billion worth of Chinese goods in September. The price remained under significant pressure from the trade war despite a positive medium to long term supply/demand story and an ever-increasing push for green energy and emissions reductions. Experts were torn as to whether or not a trade deal would occur or whether the trade war would worsen, which led to increasing global economic uncertainty. Ultimately a phase one trade deal was agreed in December between the US and China eliminating concerns of immediate further escalation and was ultimately signed in January 2020.

During the year the Company made a further investment of US$1.1million in KML and since the year end has made a further investment of US$1.5million into the joint venture, whilst simultaneously being granted a 2% net smelter royalty over seven of KML’s licences covering, in aggregate, 6,650km2.

Towards the end of 2019, the Company made investments, in aggregate, of £2,051,000 for a 19.98% stake in Cobre Limited (ASX: CBE) which is focused on projects in Western Australia where it has intercepted near surface high grade copper, gold, silver and zinc in a VHMS setting. Since the year end Metal Tiger has made an investment in Southern Gold Limited (ASX: SAU) and in Trident Resources Plc (LON: TRR) and has been trading its holding in Sandfire, taking advantage of market conditions, as and when applicable. Further details of these, and other, investments are given in the Strategic Report.

In order to facilitate further investment, whilst still retaining potential upside in its investment in Sandfire, the Company negotiated an equity option and loan facility during the year with a global investment bank. An equity derivative collar forms part of this arrangement, limiting the Company’s exposure to movements in Sandfire’s share price. At the year end A$8.2million (£4.3million) had been drawn down.

Thailand remains in a care and maintenance state, as reported last year, although since the year end we have terminated the joint venture arrangements at Boh Yai. We continue to have an investment in Logrosán Limited, with its operations in Spain, although we are no longer involved in or funding those operations and have written down our investment to nil.

Following the significant changes in our portfolio of both project and equity investments, it is the Board’s belief that the Group, going forward, has a diverse and varied exposure to several strong management teams, commodity classes, range of jurisdiction and some excellent geology with the potential for significant returns.

I would like to place on record my thanks to all the team at Metal Tiger and its advisers who have worked incredibly hard to bring the Company to its present strong position.

Contacts

Metal Tiger plc

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