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Metal Tiger Plc (LON: MTR) announced today that it has signed a binding agreement with its joint venture partner MOD Resources Limited to sell its 30% stake in the T3 project for 17,200. 000 MOD shares and 40,563,566 options to receive 40,563,566 additional MOD shares for nil consideration, exercisable under certain conditions, for a total value equivalent to 27.7 million Australian dollars on the basis of the last traded price of the MOD shares as of July 17, 2018 ASX $ 0.48 per share. 19659002] Under the terms of the agreement, Metal Tiger and MOD will also transfer control of all remaining exploration licenses held under the existing joint venture agreement (excluding the T3 project) to an existing joint venture. new joint venture will be owned 70% by MOD and 30% by Metal Tiger. The new joint venture will continue the ongoing exploration program on 18 exploration permits covering 7,978 square kilometers of potential land in the Kalahari Copper Belt.
Highlights:
- Metal Tiger will sell its 30% interest in the T3 project (approximately 24 km2 in the PL190 prospecting license) for MOD shares and options ("Securities") in MOD for a total value equivalent to 27.7 million Australian dollars based on the closing price of the ASX MOD shares on July 17, 2018 of AUD 0.48. Valuation Value Based on VWAP 20 Days MOD from $ 0.461 as of July 26, 2007.
- Metal Tiger has invested approximately £ 3.8 million to date in the MOD / Metal Tiger Joint Venture, by far Metal Tiger's shareholders obtained a return of approximately 4.5x on direct investment costs, excluding any investment in MOD's listed shares. The total investment in the joint venture includes contributions to both T3 exploration licenses and other exploration licenses, and the calculation of the performance does not take into account the unrealized value of Metal Tiger's 30% interest in the new joint venture
- . a combination of MOD shares and options, offering Metal Tiger shareholders exposure to the development of the T3 project, without having to contribute to the costs of building the mine, and offering increased exposure to the program. ongoing exploration of MOD.
- Consolidation of T3 A 100% direct ownership project should make the badet more attractive with respect to development finance options; Metal Tiger will benefit through its substantial counterparty and current participation in MOD
- In the event of a successful tender offer for MOD, all remaining Metal Tiger options will automatically be converted into MOD shares.
- MOD will enter into a new joint venture including all joint venture exploration licenses (excluding the T3 project) covering approximately 7,978 square kilometers of potential land in the Kalahari Copperbelt, which will provide shareholders Metal Tiger a 30% stake in future discoveries in these areas.
- Metal Tiger will also benefit from significantly increased exposure to MOD licenses outside the new joint venture through its securities to be considered and its current stake in the company.
Metal Tiger will grant MOD contractual rights to the new joint venture special circumstances, at the discretion of MOD, to purchase the remaining exploration badets of the joint venture held in the new joint venture, within the three-month time limit. years after the completion of the transaction. This gives Metal Tiger predefined outputs, enhancing the ability to realize shareholder value.
- Metal Tiger will retain a net smelter royalty of 2% on the T3 project capped at US $ 2 million. In addition, Metal Tiger may also receive a net smelter royalty of 2% on all exploration badets in specific scenarios.
- Metal Tiger shall have the right to appoint a representative of the board of directors to MOD, provided that Metal Tiger possesses at least
- Metal Tiger has concluded an Act of division and voting with MOD, in which Metal Tiger He is committed to supporting the recommendations of MOD's board of directors, with restrictions on Metal Tiger's ability to sell MOD shares.
- Metal Tiger will no longer be required to make other contributions to the T3 project from the date of this agreement, which will facilitate the exploration of the new joint venture and free up capital for new investments. .
- holds 13,880,042 MOD shares representing 6.0% of MOD's current share capital.
Michael McNeilly, CEO of Metal Tiger plc, commented: "We are delighted to sign this agreement with our long-time partner MOD, which is the culmination of five months of work hard on both sides. We believe that this agreement represents an exceptional result for the shareholders of Metal Tiger and MOD and the optimal way for the progress of the T3 project. The creation of the new JV Exploration preserves and formalizes the highly successful exploration partnership of Metal Tiger and MOD in the Kalahari Copper Belt, where we continue to see the possibility of a creation of Substantial value in the short term and will continue Through the transaction, Metal Tiger will become the largest shareholder of MOD and is pleased to give full support to the MOD Board to continue their excellent work in the management of exploration activities and the rapid development of T3. We are fully convinced that Metal Tiger's investment in MOD will provide outstanding returns to Metal Tiger shareholders.
Structure of the Agreement and Commercial Terms
Under the terms, Metal Tiger will sell its 30% interest in Metal Capital Limited for a total consideration of 17,200,000 MOD shares and 40,563,566 options.
The options to be issued to Metal Tiger will have no voting or dividend rights and may be exercised without consideration within three years. Metal Tiger can exercise the options by converting them into a MOD action each, provided that Metal Tiger is equal to or less than 12.5% of MOD after the conversion. The options reduce the impact of any dilution of Metal Tiger's involvement on any future issue of MOD shares.
The new joint venture will be created by a transfer of 17 of the 18 exploration licenses of the current joint venture that will be transferred thereafter from Tshukudu Metals Botswana ("TMB") to a new joint venture vehicle, Tshukudu Exploration ( Proprietary) Limited ("PET"). TEP will be wholly owned by New JV, a new incorporated company in the United Kingdom, Metal Capital Exploration Limited, 70% owned by MOD and 30% owned by Metal Tiger. The remaining license, PL190 / 2008, which includes the T3 project, will be held in trust by TMB for TEP, and all areas excluding the T3 project will be part of the new joint venture.
The T3 project includes the planned mine project and the plant layout according to the T3 pre-feasibility study of January 2018 and covers a total area of 24.34 km2.
The financial commitment of Metal Tiger for the T3 project ceased after the signing of this agreement
a series of rights in the new joint venture, which can be exercised at the option of MOD, to purchase the badets of Exploration of the new joint venture that are currently held by MOD and Metal Tiger. These Rights may be exercised in accordance with a predetermined valuation method based on the relative proportion of the enterprise value of MOD attributed to the exploration value of the relevant badet at the time of the determination. 39; exercise. Under rights:
1. MOD has the option of acquiring a 100% interest in any new JV exploration badet at the end of an opportunity study announced during the three-year period. following the completion of the operation (the "mineral resources option").
MOD has the option of acquiring a 100% interest in all new exploration badets of the joint venture at the end of the three year period following the completion of the transaction (l 39; "Joint venture cumulation option"); and
3. MOD has the option of acquiring 100% of all new JV exploration badets following a change of control recommended by the MOD board (the "JV Consolidation Option").
At the exercise of the option option of joint venture or consolidation option, Metal Tiger will receive a net smelter royalty of 2% on properties doing the same. object of the options. For the avoidance of doubt, this will not include a royalty on new JV exploration badets acquired by MOD under the Mineral Resource Option.
Metal Tiger will enter into an action and a voting act with respect to counterparty securities. MTR is committed to supporting the recommendations of the MOD Committee, including a change of control approved by the Board of Directors. Restrictions were imposed on Metal Tiger's ability to sell MOD shares, including the acceptance of not having the counterparty within 12 months of the completion of the transaction.
In the end, Metal Tiger will have the right to appoint a director to MOD's board of directors at any time where he holds more than 10% of the issued share capital in MOD (including shares and options) .
The parties will enter into a management agreement to govern the new joint venture at the end. The new joint venture will be managed by MOD and each party will be required to fund ongoing exploration expenses on a pro rata basis of their retained interests.
The transaction is conditional on certain prerequisites, including but not limited to:
- MOD receiving all required shareholders and approvals ASX
- Completion of transfer of licenses to new business and renewal of PL 190 (including the T3 project) for two additional years; and
Regulatory Approvals in Botswana - In the UK, HMRC confirmed in a non-statutory pre-authorization that a substantial exemption for shareholders should be available for MTR and therefore, no corporate tax would be required. should be paid on the disposal of the 30% stake of MTR in Metal Capital Limited
- The completion will take place 5 business days after the satisfaction of all conditions precedent and should take place by the end of of October 2018.
- WST) on December 31, 2018, or any other date agreed in writing by MOD or Metal Tiger, MOD or Metal Tiger may terminate the Agreement.
- The latest audited accounts filed for Tshukudu Metals Botswana (Pty) Limited for the year As at December 31, 2017, Pula 's fiscal losses 959,177 (USD 93,310) and l'. net badets of Pula 82,918,625 (USD 8,552,191) were in deficit.
NRG Capital Partners acts as exclusive financial advisor to Metal Tiger Action.
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