Metal Tiger and MOD go ahead with new joint venture

By Josh White

Date: Friday 16 Nov 2018

Metal Tiger and MOD go ahead with new joint venture

(Sharecast News) - Metal Tiger said on Friday that, further to its announcements on 18 July and 1 November, both MOD Resources and itself had agreed to waive the only remaining condition precedent to enable completion of the sale of Metal Tiger's interest in the T3 Project.
The AIM-traded firm said that condition was the approval of the transfer of the remaining 10 exploration licences held by the existing joint venture arrangement between the parties to Tshukudu Exploration - a new joint venture company held by MOD at 70% and Metal Tiger at 30%.

It said eight of the 18 exploration licences had already been transferred to the new joint venture, with the remaining 10 exploration licences currently being held in trust for the benefit of the venture until such time as they could be transferred to Tshukudu Exploration, following receipt of the required ministerial approval in Botswana.

The remaining licence, PL190/2008, which included the T3 Project, would be held in trust for Tshukudu Exploration, and all areas excluding the T3 Project will form part of the new joint venture.

As a result of that, the sale of the T3 Project and the creation of the new joint venture, as Metal Tiger announced on 18 July, had completed in full.

Metal Tiger was issued with 17.09 million MOD shares and 40.67 million unquoted options, with a nil exercise price and an expiry date of 15 November 2021.

Following the issue of the consideration shares, Metal Tiger said it would be interested in 31,064,220 MOD shares, representing 12.5% of MOD's then enlarged share capital.

Metal Tiger would be restricted from disposing of any of the consideration shares, as well as any MOD shares issued pursuant to the conversion of the options, for a period of 12 months from completion.

The board said the options represented around 16% of MOD's enlarged share capital, as enlarged by the consideration shares, and would reduce the impact of any dilution of Metal Tiger's shareholding in MOD as a result of any future MOD equity issuance or any sale of shares by Metal Tiger.

As it had previously announced, Metal Tiger could exercise the options by converting them into one MOD share each, provided Metal Tiger owned equal to or less than 12.5% of MOD after completing such conversion.

The MOD securities represented, in aggregate, approximately 25% of MOD's diluted share capital as enlarged by the consideration shares, assuming only exercise of the options and, on this look-through basis, taken with its 30% interest, that would give Metal Tiger an effective 47% interest in the new joint venture.

While the aggregate number of MOD securities issued to Metal Tiger remained the same, the board said the proportion of consideration shares to options was amended to ensure that the company did not own more than 12.5% of MOD's issued share capital following its on-market purchase of 94,178 MOD shares, as it announced on 10 September.

"We are very pleased to have completed this landmark transaction with MOD," said Metal Tiger chief executive Michael McNeilly.

"This deal demonstrates Metal Tiger's ability to create significant shareholder value through its investment strategy, having achieved a significant uplift in the value of its investment in the T3 Project which has been used to further enhance our already strong balance sheet."

McNeilly said the board believed that the transaction represented an "exceptional outcome" for both MOD and Metal Tiger shareholders, with completion seeing Metal Tiger becoming MOD's largest shareholder.

"In addition to this, following completion, MOD now has the flexibility, through 100% ownership of the T3 Project, to maximise the benefits of available financing options relating to the T3 project.

"Through its increased interest in MOD and the new joint venture, the transaction places Metal Tiger in a strong position to benefit from the underexplored, district scale potential of the Kalahari Copper Belt.

"I look forward to working with the experienced team at MOD as they look to become a mid-tier copper producer."


Email this article to a friend

or share it with one of these popular networks:

Top of Page