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Metal Tiger Plc

Metal Tiger Plc 2019 Interim Report

Metal Tiger plc (LON: MTR), the London Stock Exchange AIM listed investor in strategic natural resource opportunities, has today announced its unaudited interim results for the six months ended 30th June 2019.

Key Highlights:

Six months to 30 June 2019

  • Agreed sale of Metal Tiger’s 30% interest in its joint venture with MOD Resources Limited (“MOD”) and to support the offer by Sandfire Resources NL for MOD, subject to MOD shareholder approval.
  • £2.8m (net) raised through two placings at 1.45p per share.
  • Additional funding of US$1.1m contributed to our Kalahari Metals Limited joint venture in Botswana.
  • The Direct Equities Division recorded a gain of £6.3m before administrative costs in the period, principally as a result of the unrealised gain of £6.9m on the Company’s holding in MOD, as a result of the offer from Sandfire Resources NL.
  • Three new minority listed equity investments made for a total investment cost of £0.2m together with further investments in MOD and Arkle Resources Limited.

Post period end

  • 5% equity investment in Cobre Pty Ltd, an Australian copper exploration company, for approximately A$0.5m, with an agreement to fund a further A$2.0m as part of a planned IPO over the next 12 months.
  • Continued activity in the Company’s Direct Equities Division, including further investments in Sable Resources Ltd and Greatland Gold plc.


Six months endedSix months endedYear ended
Net asset value£26,685,000£11,452,000£18,951,000
Net asset value – fully diluted per share1.71p0.97p1.40p
Closing share price1.35p2.83p1.25p
Share price (discount)/premium to net asset value -fully diluted-21%191%-11%
Market capitalisation£21,026,000£31,615,000£16,874,000

Chairman’s Statement

The first half of 2019 has seen the Company’s holding in MOD Resources Limited, along with its contributing 30% interest in exploration joint venture, Tshukudu Exploration (Pty) Ltd, become subject to a MOD board recommended offer by Sandfire Resources NL. Given the global macro pressures in the first half of the year and the difficult financing environment in equity capital markets, this offer is exceptionally timely and if approved by MOD shareholders on 1 October 2019, it will be an excellent result for the Company.

The Board of Metal Tiger is in support of the deal and has opted to take all share consideration for its interests in MOD securities as part of the MOD Offer. I would like to take this opportunity to thank Michael McNeilly for his valuable contributions at the MOD Board level, where it is my understanding that he played a crucial role in advocating the need for an outcome that sought to protect and create MOD shareholder value.

In addition to obtaining 6,296,990 new shares in Sandfire, the sale of our interests in Tshukudu Exploration to MOD as part of the deal, which is subject to approval from MOD shareholders at a General Meeting, would result in Metal Tiger also obtaining a 2% Net Smelter Royalty (“NSR”) over the entirety of the ground currently held by the joint venture. This royalty is uncapped and does not have a buy back provision; accordingly, the Metal Tiger Board considers the retention of this exposure to the joint venture area to be highly attractive. This was fully cognisant of the possibility of a MOD sale at some point in the future and therefore ensured that the NSR provision formed part of the deal documentation with MOD last year when we, inter alia, sold our 30% interest in the T3 Project joint venture to MOD.

Although the deal has not yet completed, it is the opinion of the Board that the deal is likely to do so and we look forward to providing shareholders further updates after the MOD shareholder vote on 1 October 2019. Following the exercise of 35,848,398 options for nil consideration as announced on 16 September 2019, Metal Tiger holds 19.9% of the shares of MOD. The Company has committed to hold 19.9% as at the date of MOD’s General Meeting and Scheme Meeting and to vote in favour of the transaction at such meetings.

With that said, should the MOD Offer not complete, your Board has negotiated the removal of several of the onerous restrictions that were placed upon the Company’s MOD shareholding. Our MOD shareholding would no longer be subject to any voting restrictions from 16 November 2019 and would be freely tradeable with the exception of a sale, in the following 12 months, to a strategic investor and thereafter freely tradable without restriction.

In the unlikely event that the deal does not complete through the scheme of arrangement, Metal Tiger would revert back to holding its contributing 30% of the exploration joint venture and would therefore not receive either the additional MOD shares or the 2% NSR.

Further details of the MOD Offer are set out below.

Offer by Sandfire Resources NL for MOD Resources Limited

In January 2019, MOD received an offer from Sandfire, which was rejected by the board of MOD. On 25 June 2019, the MOD board announced a conditional recommended offer from Sandfire for the outstanding shares of MOD. The MOD Offer was made on a share-for-share (scrip) basis (with a mix and match facility to elect for up to 25% cash) and with an exchange ratio of 0.0664 new Sandfire ordinary shares (“Sandfire Shares”) for every MOD ordinary share (“MOD Share”) held at the record time, representing an effective offer price of A$0.45 per share based on the five day volume weighted average price of Sandfire Shares at the time the offer was announced.

The Board of Metal Tiger is in favour of the MOD Offer and has entered into a support agreement with Sandfire in relation to the MOD Offer, whereby it has committed to vote in favour of the MOD Offer in respect of its entire beneficial holding of MOD Shares and committed to elect to receive Sandfire Shares (i.e. not elect to receive cash pursuant to the mix and match facility). In addition, pursuant to the Support Agreement, Metal Tiger committed to exercise sufficient MOD Options such that its shareholding in MOD for the purposes of voting on the Scheme would be 19.9% at the record date and , through the exercise of options, has done so.

As a condition of this deal, MOD must acquire the 30% interest that Metal Tiger currently holds in its 30/70 joint venture with MOD in Botswana (Tshukudu Exploration) and to which Metal Tiger has agreed, subject to the MOD Offer being approved. A General Meeting has been called by MOD for 1 October 2019 to consider a resolution to approve this acquisition on a simple majority. The consideration for the acquisition is MOD Shares, together with a 2% NSR on future production from the exploration assets currently held by the joint venture.

Should the resolution for MOD’s acquisition of our joint venture interests be approved at the General Meeting, there will follow a Scheme Meeting, to be held one hour later, to vote on the acquisition of 100% of MOD Shares by Sandfire by way of a Scheme of Arrangement. This scheme needs to be approved by the requisite majority of MOD shareholders, which is, unless the Court orders otherwise, a majority in number (more than 50%) of MOD Shareholders present and voting at the Scheme Meeting; and by at least 75% of the total number of votes cast on the resolution at the Scheme Meeting.

Assuming both resolutions are passed, Metal Tiger will receive a total of 6,296,990 new shares in Sandfire in exchange for its holdings in MOD (both existing and as a result of the sale of its joint venture interests). This would represent approximately 3.5% of the issued share capital of Sandfire following the completion of the transaction. In addition, should the MOD Offer complete before 15 November 2019 Metal Tiger will be entitled to receive the declared dividend of A$0.16 per Sandfire Share held on that date.

Metal Tiger’s aggregate interest in MOD (including the consideration for its 30% interest in Tshukudu Exploration, its MOD shares and its MOD options) is valued at A$42.7m (approximately £23.6m at 30 June 2019) at the offer price of A$0.45 per share and excluding the potential value of 2% NSR over Tshukudu Exploration’s licences.

Direct Projects

Botswana/Joint venture with MOD Resources Limited

In the first half of 2019 relatively little exploration work was undertaken by Tshukudu Exploration, the MOD/Metal Tiger 30/70% joint venture in Botswana, as MOD’s activities in Botswana focused primarily on completing the T3 Project feasibility study and, upon publication of this, progressing the development of, and potential financing for, their 100% owned T3 deposit.

Our interest in the joint venture will, subject to MOD shareholder approval on 1 October 2019, be sold to MOD as part of the offer by Sandfire as described above.

Botswana/Joint venture in Kalahari Metals Limited

The first half of 2019 was a particularly active time for KML. During the period, KML conducted significant geophysical and geochemical work on the ground, 1,374 line-kilometres of airborne electromagnetic surveys flown and subsequently processed. In addition, 3,750 soil samples were collected for portable X-ray fluorescence spectroscopy (pXRF) and Terraleach™ analysis.

On 10 April 2019, KML entered into a binding agreement with Resource Exploration Development Limited (“RED”) to purchase 100% of Kitlanya Ltd (“Kitlanya”), a 100% subsidiary of RED, which was previously subject to an earn-in agreement between the parties. KML had already earned into 25% of Kitlanya having completed US$100,000 of exploration work on the licences held by Kitlanya. The acquisition, which is conditional upon approval of change of control of Kitlanya being granted by the authorities in Botswana, will see KML acquire 100% of Kitlanya for US$700,000, which will be satisfied by the issue of shares representing approximately 13.4% of KML as enlarged by the acquisition.

KML also obtained Environmental Permits for both the Ngami and Okavango Copper projects in the first half of the 2019.

On 31 May 2019, following our further equity investment of US$1.1m into the company, KML commenced a drilling campaign targeting both the Ngami and Okavango Copper Projects. As part of this investment, Metal Tiger’s holding in KML increased to 59.81%, but will reduce to 53.17% upon completion of KML’s purchase of Kitlanya. Metal Tiger continues to treat KML in its financial statements as a joint venture operation as a shareholder agreement precludes Metal Tiger controlling the company.

The drilling programmes at Ngami and Okavango are ongoing as at the date of these interim results.


Metal Tiger plc remains confident about the potential to increase significantly the resource estimates at the Boh Yai lead-zinc-silver mine in Western Thailand through a modest drill campaign, subject to funding, targeting modelled ore extensions and gaps in the data.

The Company’s joint venture partner at Boh Yai continues to explore options that are compliant with the permitting framework under Thai law in order potentially to allow for the implementation of exploration/resource drilling at the site. Discussions are also continuing between the Company and its joint venture partner with regard to renegotiating the joint venture agreement terms.


The first half of the year saw encouraging initial drill results at the Logrosán exploration project in Extremadura, Spain, as announced on 25 April 2019. Metal Tiger has a 50% interest in Logrosán Minerals Limited, which wholly owns the Logrosán project. The drill results indicated both gold and tungsten potential and, accordingly, Metal Tiger continues to assess next steps for the project with its joint venture partner, Mineral Exploration Network (Finland) Limited.

Direct Equities

During the period 1 January to 30 June 2019, the Direct Equities Division increased its net assets to £18,901,000 from £12,241,000 as at 31 December 2018 and reported a profit of £5,867,000 after finance and administrative costs, but before tax, for the six month period (six months to 30 June 2018: loss £3,506,000, full year to 31 December 2018 : loss £13,418,000).

The unrealised gains in the period were primarily the result of the conditional recommended offer from Sandfire for MOD as described above.

During the period, the Direct Equities Division made three new investments in listed companies, all being TSX-V listed gold exploration stocks with substantial exploration upside potential, comprising Barkerville Gold Mines Limited (“Barkerville”), iMetal Resources Inc. and Aurelius Minerals Inc. These companies have actively pursued exploration drilling campaigns during the period, with Barkerville having the most success with high grade gold intersections and a substantial resource upgrade to 4.3m ounces of gold. The Direct Equities Division’s investments in gold exploration stocks are expected by the Board to benefit from the recent increase in the gold price. The Company also completed relatively de minimis disposals of shares in Thor Mining plc and Greatland Gold plc (“Greatland”).

Investments in Greatland and Sable Resources Limited (“Sable”), made during 2018, continued to see positive newsflow during the period: Greatland announced a US$65m farm-in deal with Newcrest Mining Limited in March 2019 and Sable announced a distribution of the shares of its Canadian exploration assets (Talisker Resources Limited) effective August 2019, along with its continued exploration success at its Margarita silver project in Mexico. Both companies are expected to actively pursue exploration drilling campaigns over new highly prospective targets during H2 2019.

The Direct Equities Division continues to invest in high potential mining exploration and development companies during difficult market conditions for junior miners. The focus is to invest in mining companies that are significantly undervalued by the market and where there is substantial upside potential through exploration success and/or development of a mining project towards commercial production. Our equity investments are generally comprised of companies that are at exploration, pre-feasibility and definitive feasibility study stage. No mining companies in the investment portfolio are currently at production stage. The portfolio is therefore considered high risk as the future value of investments is often dependent on financing and/or exploration success.

Summary of listed investments held at 30 June 2019

InvestmentListingDescriptionNo. of securities heldValue at
period end
MOD Resources LimitedLSE/ASXT3 Copper Project and exploration31,838,393 ordinary shares
40,673,566 options
(nil exercise price, expiry 15/11/2021)

Thor Mining plcAIM/ASXMolyhil tungsten project76,750,000 ordinary shares
10,000,000 warrants
(5p, expiry 29/1/2020)
Greatland Gold plcAIMGold exploration14,700,000 ordinary shares231,000
Barkerville Gold Mines LimitedTSX-VGold exploration and mining600,000 ordinary shares126,000
Arkle Resources plcAIMZinc exploration9,669,952 ordinary shares
4,800,000 warrants
(1.80p expiry 10/9/2020)
4,819,277 warrants
(7p, expiry 9/3/2020)

Aurelius Minerals Inc.TSX-VGold exploration2,000,000 ordinary shares
2,000,000 warrants
(C$ 0.06, expiry 16/4/2021)
Sable Resources LimitedTSX-VGold and silver exploration650,000 ordinary shares47,000
iMetal Resources Inc.TSX-VGold and copper exploration670,000 ordinary shares
670,000 warrants
(C$ 0.20, expiry 13/3/2021)

Summary of unlisted investments held at 30 June 2019

InvestmentListingDescriptionNo. of securities heldValue at
period end
Pan Asia Metals LimitedPrivateLithium and tungsten exploration7,627,447 ordinary shares463,000
Veta Resources Inc.PrivateGold exploration1,666,667 ordinary shares150,000
Tally LimitedPrivateGold currency3,840,909 ordinary shares58,000

Capital raise

The Group raised a net £2,773,000 through share issues in February and March 2019 at 1.45p per share with a 1 for 1 warrant attached with a two-year life. Rick Rule, the renowned resource investor and Senior Managing Director of Sprott Inc., joined the Company’s share register with a personal investment of approximately £870,000 through RIBO Trust. Exploration Capital Partners, a fund managed by Rick Rule, also increased its holding to 13.25% of the Company’s share capital on completion of the fundraising.

Results for the period

Administration costs for the period were £1,949,000 (2018 H1: £1,678,000; 2018 full year: £3,647,000). After taking into account the increase in cost of share based payments in the period (£585,000 compared with 2018 H1: £218,000; 2018 full year: £708,000), administration costs remained directly comparable with 2018.

Reflecting principally the gains in the Direct Equity Division in the period, the Group’s profit for the period on ordinary activities before tax was £4,521,000 (2018 H1: loss £5,047,000; 2018 full year: loss £3,958,000).

In addition to the capital raise in the period, disposals from Direct Equity Division sales raised a further £277,000. £1,141,000 was re-invested into Direct Equity share purchases and into our joint ventures and associates. After taking into account administration costs, cash in hand at the end of the period was £2,568,000 (30 June 2018: £737,000; 31 December 2018: £1,859,000).

Developments since 30 June

On 12 August 2019, Metal Tiger increased its holding in Greatland through the acquisition of 8,108,108 shares and 8,108,108 2.5p warrants for an investment of £95,295; and since that date has disposed of 13,808,108 Greatland shares, resulting in a net reduction in its holding of 5,700,000 shares since 30 June 2019.

On 2 September 2019, Metal Tiger announced that it had entered into a binding subscription agreement with Cobre, a privately-owned Australian copper exploration company, to subscribe for an initial 6,600,000 ordinary shares in Cobre for a total investment of A$500,280, representing in aggregate approximately 15% of Cobre’s enlarged issued share capital. Subject to the fulfilment of certain conditions, Metal Tiger has agreed to invest a further A$2,000,000 for an aggregate 19.99% shareholding as part of Cobre’s planned IPO on a recognised stock exchange.

On 23 September 2019, Osisko Gold Royalties Ltd announced an offer for Barkerville at an offer price of C$0.58 per share, valuing Barkerville at C$338m. Metal Tiger acquired 600,000 shares of Barkerville at a price of C$0.36 on 27 March 2019 and has now fully exited its position in Barkerville through on market sales, both prior and subsequent to the announced offer, at an average price of C$0.46, realising gross proceeds of C$278,000 and a CAD gain of 29% on investment cost.

During September 2019, Metal Tiger also increased its holding in Sable through the acquisition of 350,000 shares for a total investment of C$45,815.


The Board of Metal Tiger is exceptionally positive about the Company’s outlook for the future. We believe we have the right mix of skills and experience at Board and senior management level, an extended network of industry partners and investors, notwithstanding our supportive industry expert shareholders in Rick Rule and Sprott, to deliver significant value for shareholders.

Metal Tiger maintains a significant level of exposure to copper and believes that the excellent fundamentals for copper are currently being overshadowed by negative macro forces. We remain generally positive on the outlook for copper and, whilst we would not wish to openly speculate on the macroeconomic position, should the situation worsen, the Board believes that there is an increasing likelihood that the central banks of the world will look to intervene.

Last year, your Board set the foundations for where Metal Tiger currently sits. The Company has focused primarily on its efforts in Botswana both with KML and with MOD. Should the MOD Offer complete, it opens up a whole new avenue of possibilities both in terms of existing investments and in new investments, such as Cobre. With Metal Tiger’s support, the KML team has worked hard to develop KML’s assets and we look forward to continuing to be able to offer to Metal Tiger investors direct exposure to an exciting land package.

I would like to take this opportunity to thank all our advisers and partners: the Company’s success has been helped by the quality of those engaged around the world. Thank you to our shareholders, many of whom have held shares in the Company for the past four years, who share our resolve to create high investment returns. We are working hard and will continue to strive to deliver significant value from all our investments.

Charles Hall

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