TIDMMTR
15 December 2020
Metal Tiger plc
("Metal Tiger" or the "Company")
Execution of Share Purchase Agreement
Metal Tiger plc (AIM: MTR), the London Stock Exchange AIM listed
investor in natural resource opportunities, is pleased to announce
that Cobre Limited ("Cobre") and the shareholders of Kalahari
Metals Limited ("KML") (the "KML Vendors") (together the "Parties")
have executed a Share Purchase Agreement (the "SPA") in respect of
the conditional acquisition by Cobre of 51% of the issued share
capital of KML (the "Transaction").
The terms of the SPA are generally consistent with the binding
Heads of Agreement previously entered into by the Parties, as
announced by Metal Tiger on 24 August 2020, 22 October 2020 and 20
November 2020. Metal Tiger is one of the KML Vendors and currently
has a 62.17% equity interest in KML. In addition, Metal Tiger
currently holds an 18.79% equity interest in Cobre.
Following completion of the Transaction, which is subject, inter
alia, to the conditions set out below, Metal Tiger will hold an
equity interest of approximately 20.72% in Cobre and an economic
interest in KML of approximately 59.57% (comprising a direct
interest of 49.00% and an indirect interest of 10.57% as a result
of the Company's direct interest in Cobre).
Michael McNeilly, Chief Executive Officer of Metal Tiger,
commented:
"We are very pleased that the Parties have entered into the SPA,
as the Board believes that completion of the Transaction will
facilitate the acceleration of KML's planned exploration programme
in one of the most exciting copper jurisdictions in the world,
whilst providing an additional funding partner alongside Metal
Tiger. Furthermore, by diversifying our interest in KML via Cobre,
we believe we have an additional avenue for liquidity on
exploration success in the future.
"We look forward to further operational progress from KML in the
near future, as our interests in the Kalahari Copper Belt continue
to develop."
Further Information on the Transaction
Key Terms of the SPA
Consideration
The KML Vendors will be issued, in aggregate, 21,444,582 new
Cobre shares in consideration for the 51% interest in KML (the
"Consideration Shares"). Cobre will initially acquire a 49.99%
interest in KML, with Metal Tiger retaining a 50.01% interest, and,
subject to obtaining change in control approval from the Minister
of Mineral, Energy and Water Resources of the Republic of Botswana
(the "Botswana Consent") in respect of the KML group, Cobre will
increase its shareholding in KML to 51.00% immediately thereafter,
with Metal Tiger's shareholding reducing to 49.00%. The
Consideration Shares will be voluntarily escrowed until 31 January
2022 in accordance with the terms of the SPA with certain
exemptions available.
Conditions to completion of the Transaction
Completion of the Transaction is conditional upon:
-- the passing, at an extraordinary general meeting of Cobre (expected to
occur in early 2021), of resolutions to authorise Cobre to complete the
Transaction in compliance with its constitution, the Corporations Act
2001 (Cth) and the ASX Listing Rules;
-- receipt by Metal Tiger of a no objection notification under the Foreign
Acquisitions and Takeovers Act 1975 (Cth) in respect of its acquisition
of an increased interest in Cobre as a result of the issuance of
Consideration Shares to Metal Tiger (Metal Tiger has already received the
no objection notification and informed Cobre as such); and
-- receipt of the Botswana Consent.
The Parties have agreed to use their respective reasonable
endeavours to satisfy the conditions as soon as practicable.
Completion of the Transaction is subject to the satisfaction (or
waiver) of the conditions occurring no later than six months from
the date of the SPA, or such later date as the Parties may
agree.
The Parties have agreed that if the above conditions have been
satisfied (or waived) save for receipt of the Botswana Consent,
then the Parties may proceed to completion in respect of Cobre's
acquisition of a 49.99% interest in KML.
Provided that completion has occurred in respect of Cobre's
initial 49.99% interest in KML, upon the receipt of the Botswana
Consent, Cobre must proceed to acquire the additional number of KML
shares from Metal Tiger required to bring its total shareholding in
KML to 51.00%, with Metal Tiger being issued an additional 445,368
Consideration Shares (which are included in the abovementioned
figure of 21,444,582).
Other Key Terms of the SPA
On completion of the Transaction, KML will ensure that it has
cash balances of not less than an amount between US$400,000 and
US$285,000 (the exact amount progressively becoming lower depending
on when completion occurs) (the "Completion Cash Balance"). The
Completion Cash Balance can be either held in the bank accounts of
KML or made available to KML from Metal Tiger to settle, on behalf
of KML, any invoices received and payable by KML, to the extent
such invoices relate to matters included in any quarterly budget
which has been approved by Metal Tiger pursuant to the investment
agreement, entered into in May 2019, between Metal Tiger and
KML.
The validity of Metal Tiger's conditional 2.0% net smelter
royalty over all of KML's wholly owned licences, being seven
licences covering, in aggregate, 6,650km2 (together, the
"Royalties"), will not be impacted by completion of the
Transaction. On completion of the Transaction, it has been agreed
that the conditions attached to the Royalties will fall away.
Shareholders Agreement
Subject to completion of the Transaction, Metal Tiger and Cobre
Kalahari Pty Ltd ("Cobre Kalahari") (being a new wholly owned
subsidiary of Cobre) have entered into a new shareholders agreement
in respect of KML (the "Shareholders Agreement") to provide for,
inter alia, the governance and continued funding of KML's
exploration activities.
The key terms of the Shareholders Agreement are as follows:
-- Cobre Kalahari will be the initial manager of all operations and
activities pertaining to the prospecting licences held by the KML group;
-- Metal Tiger and Cobre will each be entitled to appoint two nominee
directors to the board of KML;
-- Provided Cobre holds 51% of KML, one of its nominees will act as
Chairman and will have a casting vote in the event of a deadlock;
-- Upon the Shareholders Agreement becoming effective, Metal Tiger's
nominees will be Michael McNeilly, CEO of Metal Tiger, and Keith
Johnston (who are both existing directors of KML);
-- The KML board, following the Shareholders Agreement becoming effective,
will agree an initial business plan and quarterly budget for the next 24
months, not to exceed, in aggregate, A$3.5 million, and which will be
funded, via shareholder loans, by Cobre and Metal Tiger on a pro rata
basis (this A$3.5 million budget is above the Completion Cash Balance,
which will be spent prior to Cobre needing to contribute); and
-- Customary matters reserved for the board and the shareholders.
Deferred Consideration Deed
Subject to completion of the Transaction, Cobre, Metal Tiger,
KML and RED Projects Limited ("RED Projects") (one of the KML
Vendors) have also agreed to enter into a Deferred Consideration
Deed.
RED Projects and KML are parties to a share purchase agreement
dated 9 April 2019 in respect of KML's acquisition of Kitlanya
(Proprietary) Limited (the "Kitlanya SPA"). Kitlanya is the holder
of five prospecting licences in Botswana (the "Prospecting
Licences").
Under the terms of the Kitlanya SPA, following the publication
of a maiden JORC compliant indicated mineral resource in respect of
the Prospecting Licences ("JORC Declaration"), RED Projects is
entitled to a discovery bonus that may be satisfied by way of cash
or an issue of new KML shares.
The parties have agreed to amend that arrangement, pursuant to
the Deferred Consideration Deed, so that with effect from
completion of the Transaction Metal Tiger and Cobre (in place of
KML) must each satisfy a portion of the obligation to pay RED
Projects the discovery bonus by either electing to pay its pro rata
proportion of the discovery bonus in either cash or the issue of
new shares in Metal Tiger or Cobre (as applicable) to RED Projects
(subject to a cap so that RED Projects will not hold more than
19.99% of the then enlarged issued share capital of either Cobre or
Metal Tiger, with any balance of the discovery bonus being
satisfied in cash). The amount of the bonus will be calculated with
reference to the value of the copper contained in the JORC Resource
estimate in respect of the Prospecting Licences at a price of
US$5.00 per tonne of such copper.
The number of new Metal Tiger shares that may be issued to RED
Projects will be determined by dividing Metal Tiger's relevant
proportion of the discovery bonus by the volume weighted average
price of a Metal Tiger share on AIM over the 10-trading day period
immediately following the date the JORC Declaration is announced.
Alternatively, Metal Tiger may choose to pay its relevant
proportion of the discovery bonus in cash.
Background information on KML
KML, which was incorporated in England & Wales on 3 May
2017, holds interests in 12 highly prospective prospecting licences
covering a total area of 8,595km(2) in the Kalahari Copper Belt of
Botswana, comprising two 100% owned exploration licences, five
exploration licences subject to a binding earn-in agreement with
Triprop Holdings (Pty) Limited ("Triprop") (which includes the
Ngami Copper Project) in which KML has a 51% interest, and five
prospecting licences held by 100% owned subsidiary, Kitlanya.
Metal Tiger currently holds approximately 62.17% of KML together
with the Royalties. The five exploration licences owned by Triprop
do not form part of the Royalties.
As at 31 December 2019, KML had net assets of approximately
GBP2.0 million. For the year ended 31 December 2019, KML reported a
net loss of GBP0.063 million.
Michael McNeilly is a director of KML.
Background information on Cobre
Cobre Limited (ASX:CBE) is an emerging resources exploration
growth company with prospective projects in Western Australia.
Cobre has discovered a VHMS deposit enriched in high-grade copper,
gold, silver and zinc within its Perrinvale Project area in the
Panhandle Greenstone Belt of Western Australia.
As at 30 June 2020, Cobre reported net assets of A$9.1 million.
For the year ended 30 June 2020, Cobre reported a loss after tax of
approximately A$2.0 million.
Michael McNeilly is a non-executive director of Cobre.
This announcement contains inside information for the purposes
of the market abuse regulation (EU No. 596/2014).
For further information on the Company, visit:
www.metaltigerplc.com
Enquiries:
Michael McNeilly (Chief Executive Officer) Tel: +44 (0)20 7099 0738
Mark Potter (Chief Investment Officer)
Richard Tulloch Strand Hanson Limited (Nominated Tel +44 (0)20 7409 3494
James Dance Adviser)
Jack Botros
Paul Shackleton Arden Partners plc (Broker) Tel: +44 (0)20 7614 5900
Steve Douglas
Gordon Poole Camarco (Financial PR) Tel: +44 (0)20 3757 4980
James Crothers
Hugo Liddy
Notes to Editors:
Metal Tiger PLC is admitted to the AIM market of the London
Stock Exchange ("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.
END
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CONTACT:
Metal Tiger plc
SOURCE: Metal Tiger plc
Copyright Business Wire 2020
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