Metal Tiger plc (AIM:MTR), the London Stock Exchange AIM listed investor in natural resource opportunities, said it has made a further US$1.5m equity investment into Botswana focused explorer, Kalahari Metals Limited (“KML”). Following the Investment, Metal Tiger will be interested in approximately 62.2% of KML.
As part of the Investment, Metal Tiger has been conditionally granted a 2% net smelter royalty over all of KML’s wholly owned licences, being seven licences covering, in aggregate, 6,650km2 (together, the “Royalties”). The five exploration licences owned by Triprop Holdings (Pty) Limited (in which KML has a 51% interest) do not form part of the Royalties.
The Royalties will fall away should Metal Tiger invest a further amount at a lower valuation than the Investment, subject to a cap of US$500k. In other words, any further investment by Metal Tiger up to US$500k must be at the same valuation as the Investment if the Royalties are to be maintained.
KML will utilise the proceeds of the Investment to fund exploration drilling programmes at the Kitlanya East (‘KIT-E’), Okavango Copper Project (‘OCP’) and Kitlanya West (‘KIT-W’) projects, located in the Botswana portion of the Kalahari Copper Belt.
Environmental approvals are now in place for drilling on all of KML’s projects. Drilling and soil sampling programmes are planned to start at KIT-E in March 2020, followed by further target drilling at the OCP and KIT-W project.
Michael McNeilly, Chief Executive Officer of Metal Tiger, commented: “This investment will allow the KML team to progress exploration and prove up other targets at KIT-E, Kit-W and OCP, and also increases Metal Tiger’s exposure to the highly prospective Kalahari Copper Belt, which currently includes our interest in KML, as well as in Sandfire’s T3 Project and A4 Project, where MTR has a capped US$2m NSR and a 2% uncapped NSR respectively.
“In the context of our expectation of an increasing global requirement for copper production, and therefore exploration, we expect the Kalahari Copper Belt to become an increasingly more valuable area to be situated and are delighted to increase our interest in the area.”
KML, which was incorporated in England & Wales on 3 May 2017, holds interests in 12 highly prospective exploration licences covering a total area of 8,595km2 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 (includes the Ngami Copper Project), and five exploration licences held by 100% owned subsidiary, Kitlanya Limited (see Table 1).
Notwithstanding Metal Tiger’s majority shareholding in KML, KML does not fall to be treated as a subsidiary of Metal Tiger as an agreement between the shareholders of KML precludes Metal Tiger from exercising control.