TIDMMTR
Metal Tiger PLC
("Metal Tiger" or the "Company")
MOD Resources - A$15m Capital Raise and Non-Binding Offer
Received by MOD
Metal Tiger plc (AIM:MTR), the London Stock Exchange AIM listed
investor in strategic natural resource opportunities, notes the
announcement made by MOD Resources Ltd ("MOD") today, the full text
of which is set out below and the full announcement (including
footnotes) can be seen via the following link:
https://www.asx.com.au/asxpdf/20190121/pdf/441zz9rk2mflcn.pdf.
"Highlights:
-- Successfully raised $10 million through an oversubscribed
institutional Placement at $0.30/sh.
-- $5 million to be raised through a fully underwritten Rights Issue
at $0.24/sh.
-- Confirms strong shareholder confidence in the Company and the
quality of the T3 Copper Project
-- Received an unsolicited, non-binding, indicative, conditional
proposal from Sandfire at $0.38/sh.
-- The Board believes this proposal undervalues the Company's assets
-- MOD continues to explore all options including further engagement
with Sandfire
MOD Resources Limited ("the Company") (ASX/LSE: MOD) is pleased
to announce that it has received firm commitments to raise $10
million through an institutional share Placement with an additional
$5 million fully underwritten Rights Issue to be offered to
existing shareholders. The majority of funds are intended for
working capital to advance the T3 Copper Project towards production
and defining additional resources within the surrounding T3
Expansion Project area.
Furthermore, following media speculation, the Company announces
receipt of an unsolicited, non-binding, indicative and conditional
proposal by ASX listed Sandfire Resources NL ("Sandfire")
(ASX:SFR). The proposal is to acquire 100% of MOD shares via an all
scrip transaction equivalent to $0.38 per MOD share. The Board
believes this proposal undervalues MOD's unique and extensive
assets.
MOD's T3 Copper Project in Botswana lies within a largely
under-explored, highly prospective region offering a dominant
copper-belt scale opportunity. The T3 Copper Project, discovered in
March 2016, presents the potential for a long-life, high-margin,
open pit copper mine with significant exploration upside. The
Company continues to progress the T3 Feasibility Study to reach a
decision to mine in the first half of 2019. The Company has also
advanced discussions with a number of parties which has provided
the Board with confidence in the availability of a range of funding
options to progress the T3 Copper Project into production.
MOD's Managing Director, Julian Hanna, said "Funding from this
capital raise will enable the Company to progress the T3 Copper
Project towards a development decision and conduct further drilling
for additional resources. The unsolicited, indicative proposal for
100% of the Company received from Sandfire confirms the potential
of the T3 Copper Project, however the Board considers it
significantly undervalues the assets of the Company. With strong
ongoing support of our shareholders through a placement and a fully
underwritten rights issue, we believe that the Company will have
sufficient working capital to achieve our objectives."
Successful placement of $10 million with a $5 million Fully
Underwritten Rights Issue
The Company is pleased to announce that it has received firm
commitments to raise $10 million through the issue of approximately
33.33 million fully paid ordinary shares to institutional and
sophisticated investors ("the Placement"). The Placement will be
conducted using the Company's existing Listing Rule 7.1 placement
capacity.
The issue price for the Placement is $0.30 per share
representing a 36% premium to the Company's last closing share
price on ASX. This indicates strong shareholder confidence in the
Company and the opportunity that T3 Copper Project and the regional
exploration represents to shareholders.
To ensure that all shareholders can participate in the capital
raising, the Placement will be followed by a non-renounceable
rights issue to raise approximately $5 million (approximately 21.7
million shares) from eligible shareholders ("Rights Issue"),
offering 1 new share per 13 shares held. The Rights Issue is fully
underwritten by Ashanti Capital. The Rights Issue will be priced at
$0.24 per share, a price that closely reflects the Company's last
closing share price on ASX. Further details relating to the Rights
Issue timetable will be released to the market shortly.
The funds raised from the Placement and Rights Issue are
intended to be used to complete a 2019 capital works program, which
will include:
-- Progress the T3 Copper Project through Feasibility Study, mining
licence application and early T3 development work to reach a
decision
to mine, targeted by the end of the first half of 2019;
-- Completion of purchase of the farm on which T3 Open Pit is located and
construction of initial project related infrastructure;
-- Infill drilling to upgrade part of the early stages of T3 mine
production to a JORC compliant Measured Resource category;
-- Advance conceptual underground mining studies for the T3 Expansion
Project and A4 Dome with resource drilling as appropriate;
and
-- Conduct follow-up drilling of initial, shallow copper and silver
intersections at the T4 - T23 Dome.
Funds will also enable the Company to progress negotiations with
a number of parties in respect of funding the development of the T3
Copper Project.
The Company's Board of Directors ("the Board") and Metal Tiger
Plc have committed to take up their entitlements in the Rights
Issue.
Ashanti Capital is acting as lead manager and underwriter of the
capital raising. Canaccord is acting as co-manager of the capital
raising. Blue Ocean Equities provides corporate advice to the
Company.
Sandfire Indicative Proposal and Update on Strategic Funding
Process
On 16 January 2019, the Company received an unsolicited,
non-binding, indicative and conditional proposal ("Indicative
Proposal") from Sandfireto acquire 100% of shares in MOD.
The Indicative Proposal was made after a period of technical due
diligence, including access to a data room and a site visit, with
respect to a potential joint venture arrangement, the potential
sale of a partial interest in T3 Copper Project and a potential
market placement to support development of the T3 Copper
Project.
The Indicative Proposal comprises a full scrip consideration
equivalent to $0.38 per MOD share, valuing the Company's equity, on
a fully diluted basis, at $113 million [1]. This is equivalent to
an exchange ratio of 1 Sandfire share for approximately every 17
MOD shares1.
The Indicative Proposal is subject to conditions, including:
-- Completion of definitive due diligence to the satisfaction of Sandfire;
-- Execution of a Merger Implementation Agreement;
-- Receipt of a unanimous recommendation from the MOD Board;
-- Binding commitments or statements of intent by MOD shareholders
holding 19.9% or more, in support of the transaction; and
-- Sandfire Board approval.
The Board believes that the Indicative Proposal undervalues the
assets of MOD:
-- MOD holds a dominant position (11,700km[2] in granted
licences) in one of the last under-explored sediment hosted
copper
belts in the world, within a safe jurisdiction [2];
-- MOD owns 100% of the T3 Copper Project, a high-quality copper
development asset;
-- Strong exploration results indicate the potential for additional
economically viable copper mineralization within several
priority
targets within MOD's landholding;
-- MOD expects the T3 Copper Project will produce a high-grade,
high-quality concentrate, attracting strong interest from
metal
traders and smelters;
-- MOD is on track to release the T3 Copper Project Feasibility Study by
end of the first quarter of 2019;
-- MOD's share price and the MOD / SFR exchange ratio are at a 2.5-year
low [3];
-- The last placement price was $0.47 per share [4];
-- NPV (pre-tax) for the T3 Copper Project based on the PFS is $370m
under the Base Case and $529m under the Expansion Case [5];
and
-- The acquisition would be highly accretive to Sandfire in terms of
resource, reserve, extended mine-life and NPV per share [6].
The Board remains fully committed to act in the best interests
of, and to maximise value for MOD shareholders. The Company is
willing to engage with Sandfire and grant confirmatory due
diligence if a compelling price is presented and capable of being
supported by the Board and MOD shareholders.
MOD has not received any offer capable of acceptance by the
Company's shareholders and no certainty that the Indicative
Proposal will result in a transaction. The Company will continue to
update the market with any material developments in relation to the
Indicative Proposal.
The Company has appointed Sternship Advisers as financial
advisor and DLA Piper as legal advisor with respect to Sandfire's
Indicative Proposal."
Metal Tiger confirms that it has made a non-binding commitment
to take up its entitlements under the Rights Issue. Metal Tiger
currently holds 31,064,220 MOD shares in MOD as well as 40,673,566
unquoted options with a nil exercise price expiring on 15 November
2021; and 154,167 options over MOD shares, each exercisable at
AU$0.06 per MOD share on or before 15 April 2019.
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 Strand Hanson Limited Tel +44 (0)20 7409 3494
James Dance (Nominated Adviser)
Jack Botros
Nick Emerson SI Capital (Broker) Tel: +44 (0)1483 413 500
Gordon Poole Camarco (Financial PR) Tel: +44 (0)20 3757 4980
James Crothers
Monique Perks
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 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. The Company's key strategic objective is to ensure the
distribution to shareholders of major returns achieved from
disposals. Metal Tiger has two investment divisions, Direct
Equities and Direct Projects.
The Direct Equities division invests in undervalued natural
resource companies listed on AIM, the ASX and the TSX. Through the
trading of equities and warrants, Metal Tiger seeks to generate
cash for investment in the Direct Projects division.
Metal Tiger's Direct Projects division is focused on the
development of its key project interests in Botswana, Spain and
Thailand. In Botswana, Metal Tiger, through its 12.5% interest in
MOD Resources Limited and related JV, has a growing interest in the
large and highly prospective Kalahari copper/silver belt. 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 licences, 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.
Background information on the T3 Project
The T3 Project is located on the Kalahari Copper Belt in
northern Botswana and is a Copper/Silver Project. T3 is located
within the central part of the T3 Dome Complex (approximately
1,000km2), which is the focus of rapidly increasing exploration
activity undertaken by MOD. Two significant resources have been
discovered to date within the T3 Dome: T1 (Mahumo deposit 100% MOD)
and T3 (100% MOD).
The T3 Deposit was discovered in March 2016 when a reverse
circulation ("RC") drill hole intersected 52m @ 2.0% Cu and 32g/t
Ag from shallow depth. The maiden T3 JORC (2012) compliant Mineral
Resource Estimate was announced on 26 September 2016 with the first
Resource upgrade announced on 24 August 2017. The results of a
Scoping Study for an open pit mine at T3 with a 2Mtpa processing
plant, an indicative mine life of 10 years and an average
production rate of 21,800tpa of copper and 665,000oz pa of silver
was released on 6 December 2016. Work on a Pre-Feasibility Study
(PFS) commenced in January 2017 and additional deeper copper
mineralisation was discovered below the T3 Resource in February
2017.
The Phase 2 drilling at the T3 Copper/Silver Deposit commenced
on 7 August 2017, with approval granted for the recommencement of
both diamond core ("DC") and RC drilling at the T3 Project and its
vicinity, through to December 2018 (which has subsequently been
extended to December 2020). This included 90 DC drill holes
designed to infill the Resource and test for possible extensions.
The objective of the infill programme is to increase geological
confidence and upgrade categorisation of the T3 Resource. The
programme also included grid drilling to investigate the potential
for an underground Resource down-dip and along strike from the
planned open-pit, and to investigate geophysical targets. Drilling
approval has been granted for the wider T3 Dome with the acceptance
of the T3 Dome EMP announced on 3 April 2018.
The results of the T3 Open Pit Pre-Feasibility Study were
announced on 31 January 2018; the revised and upgraded T3
Copper/Silver Deposit Mineral Resource Estimate was announced on 2
July 2018; and a Resource re-classification announced on 16 July
2018.
The T3 Open Pit Feasibility Study, towards a decision to mine,
is currently underway.
Outside of the T3 Project licence area, Tshukudu Exploration,
the Metal Tiger (30%) and MOD (70%) joint venture, continues to
conduct regional exploration on the highly prospective Kalahari
Copper Belt.
Footnotes:
1 As at close of market on 15 January 2019.2 Refer to Sprott
Capital Partners research report dated 15 January 2019, available
at www.modresources.com.au/research_reports3 Based on closing
prices4 MOD's $18m placement and rights issue announced on 6 March
2018.5 Refer to ASX announcement "T3 Pre-Feasibility Study Confirms
Robust, Long Life Copper Mine" released on 31 January 2018.6 Based
on average broker NPV.
View source version on businesswire.com:
https://www.businesswire.com/news/home/20190121005121/en/
This information is provided by Business Wire
(END) Dow Jones Newswires
January 21, 2019 04:15 ET (09:15 GMT)
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