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Q&A with Metal Tiger PLC: Investment in Kalahari Metals Limited (LON:MTR)

Metal Tiger PLC (LON:MTR) Chief Executive Officer Michael McNeilly caught up with DirectorsTalk for an exclusive interview to discuss their investment in Kalahari Metals Limited.

 

Q1: We’ve just seen your investment into Kalahari Metals (KML), can you talk us through the highlights, explaining what this investment gets you & what it means for shareholders?

A1: We’ve got a right to acquire up to 50% of Kalahari Metals which is a privately owned company which directly & indirectly has exposure to 7 highly prospective exploration licences in total covering about 4,000 square kilometres in the Kalahari Copper Belt. It’s next to MOD/Metal Tiger joint venture licences & the other licences to the north-east of the belt are adjacent to the Cupric Canyon licences & it’s all along the structural corridor so it’s in what I like to say is the ‘interesting’ part of the belt.

So, the first payment of $600,000 is structured as payment in cash with $30,000 deducted which we’re issuing to Triprop which is a company which owns five of the exploration licences & KML has a farm-in agreement with them. For $600,000, KML spend on Triprop’s licences, KML will have the right to own 51% in them so we have right within 6 months’ time of this first investment in KML, to put in another 500,000 & take this up to 34% & then another $500,000 6 months after that, if we wish to, will take us up to a total of 50% & obviously, no other investors can come into KML in that period of time.

If we choose not to take up the option then that would be an odd thing to do because I think the value of this land & the belt, particularly given the drill campaign which is underway within the joint venture between MOD & Metal Tiger which is drilling now at A4 & A1, will I believe show that there is other copper deposits in the belt & that certainly there is copper throughout the belt.
The other interesting thing to note is is there AEM targets so clearly KML will be proposing, & obviously it’s discussed as part of our 3-month extensive due diligence programme for making this investment, a work budget which I would imagine would consist of some high resolution mag but also to fly AEM over areas so that KML can then delineate targets for drilling. At the same time, it’s quite crucial that we progress these environmental permits, it’s a mixture of tribal & non-tribal land, so farmland, & obviously as we’ve seen recently, Kopore announced that they’ve received an EMP which took them about 5 months to get over 7,000 square kilometres in one fell swoop. So, we’re highly encouraged by that & we think it indicates that Botswana government wants to see drilling happening on this belt, recognising the potential.

Obviously, it’s worth noting that MOD/Metal Tiger are trying to progress EMPS’s over T20 which is to the south-west of the licences near Ghanzi & that’s also a very interesting structure with lots of domes.

So, lots happening, lots of drilling going to happen & lots of targets to be generated so we think it’s a cracking deal.

 

Q2: How did the deal come about?

A2: Funnily enough, it came about at a drinks event at so a chance meeting with one of the directors & shareholder of KML, Adam Woolridge at a drinks event, instantly recognised the opportunity & off we went into negotiations. We signed an exclusive option to conduct due diligence into them, obviously it took longer than we’d like to complete all the due diligence as well as negotiate all the contracts, but we finally got there. So, we’re very pleased it’s out to market.

 

Q3: So, what is the planned work programme?

A3: The planned work programme we will obviously be receiving from them, we’ve had some basic ideas which was given to us as part of the due diligence. They’re just refining that now because obviously you need to get quotes from contractors which are going to be flying airborne mag & also going to be flying AEM, you need to get the various quotes in & you also want to get quotes from the various environmental consultants.

So, KML is busy doing that, I think they’ll be a meeting sometime probably early next week to discuss what they’re proposing & we’ll go from there. Clearly, it’s going to be, as I mentioned earlier, detailed mag & AEM & followed potentially by some soils as well.

 

Q4: You obviously see significant value in Kalahari Copper Belt, what is the future for the area & what can Metal Tiger shareholders expect to see?

A4: The future for the area, in my opinion & it really depends as it still very early days, the one interesting thought that I’d like to put out there is look at zone 3 at T3 which is the base of the contact between the D’Kar & the Ngwako Pan & you’re getting sort of a consistent 0.6 to a little bit higher over 10–20 metres. If that proves to be consistent over 80 square kilometres, obviously taking into account the folding & other potential things that have moved that contact, if that’s consistent over 500 metres over say an 80 -120 square kilometre region, that is a huge amount of copper, we’re talking very very large quantities.

Now, of course, it’s very early days but that’s just one example of where you could have district-scale potential, of course there’s also likely to be other deposits which are similar to T1 or to what you have over at Cupric & there’s also the potential for other deposits like T3. In all honesty, you have to go & drill them but the steps & the technical teams at MOD & KML, I think there’s going to be a lot of information flying around & there’s going to be a lot of very exciting & interesting targets. Clearly, if MOD is able to prove, through drilling, could be a matter of weeks, that AEM & the AEMA work that they’ve done is proving as a good indicator for finding copper, well then that will really improve all explorers on the belt in terms of trying to generate good targets.