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Signed exploration licence option

RNS Number : 0216U
Metal Tiger PLC
10 October 2014
 



Metal Tiger plc

("Metal Tiger" or the "Company")

 

Signed exploration license option

 

In line with the Company's investing policy, the strategic update announced on 24 July 2014 and the recent appointment of Terry Grammer, the board of Metal Tiger is pleased to announce that on 9 October 2014 the Company entered into an option arrangement (the "OA") with Qbis Resources S.L. ("Qbis"), a private Spanish company, and Diversified Asset Holdings Pty Ltd ("Diversified"), a private Australian company, for an exploration licence covering a licensed area (the "Project") in North-West Spain. The Project is prospective for gold, tungsten and tin. Subject to Metal Tiger triggering certain staged option milestones over an 18 month period, Metal Tiger has the ability to acquire an 80% joint venture stake in the Project.

 

Metal Tiger's Chairman, Terry Grammer, commented: "Metal Tiger is pleased to secure the rights to its first licensed exploration area.  Having known the key prospector behind the license for many years, and having inspected the site with my fellow directors, we are confident that the licensed area provides suitable exploration opportunity with good potential and prospects for the Company."

 

Exploration licence option agreement

 

The OA is a further example of Metal Tiger investing in various phases of the licensing, exploration & development, and production stages of the metals mining sector and is in line with the Company's stated investing policy.  Should Metal Tiger decide to exercise the OA then it provides Metal Tiger with the opportunity to secure a tenement area which is already licensed for exploration and which the board of Metal Tiger believes is immediately ready for exploration activities to be carried out.

 

Under the terms of the OA, Metal Tiger is paying £20,000 in cash, upfront, to provide an exclusivity period of 60 days  in order for the Company to complete its due diligence and finalise a formal joint venture agreement ("JV") with Qbis and Diversified. The purpose of the JV is to enable Metal Tiger to invest in exploration activities in the Navasfrias area of the Salamanca Province of Spain.  The exercise of the OA is at the sole discretion of Metal Tiger.

 

Should Metal Tiger decide to exercise the OA and enter into the JV then the aggregate maximum consideration which would payable by Metal Tiger to the two parties pursuant to the OA is £1 million, consisting of £200,000 in cash, upon certain milestones being achieved, and the remaining £800,000 through the issue and allotment of 64 million new ordinary shares of 0.01 pence in Metal Tiger (the "Consideration Shares") at a price of 1.25p per new ordinary share.  Additionally, under the terms of the OA, the Company will grant a maximum of 64 million options exercisable on a one-for-one basis in Metal Tiger at a price of 3p per ordinary share and with an expiry term of 5 years from date issued (the "Options").  By proceeding beyond the exclusive 60 day due diligence period, Metal Tiger is also obliged to invest an additional €500,000 in cash by the end of 18 months in the exploration and development of the site. The Company would need to raise further funding at the appropriate time in order to meet this commitment and is considering its options in this regard.

 

In summary, the total consideration which would be payable by Metal Tiger should it exercise the OA and enter into the JV is as follows:

 

·     £20,000 in respect of the initial 60 day due diligence exclusivity period;

·     £200,000 in cash in four staged payments upon certain milestones being met;

·     £800,000 to be satisfied through the issue and allotment of the Consideration Shares, which would be issued in four stages upon certain milestones being met;

·     one-for-one share options attaching to the issue of Consideration Shares issued in four equal tranches in line with other payments.  The Options will be exercisable at 3p per share with a term of 5 years from date of issue; and

·     €500,000 minimum spend by Metal Tiger on exploration activities over 18 months.

 

Should the Consideration Shares be issued and the Options be exercised, the vendors would become interested in 128,000,000 ordinary shares in Metal Tiger which would, as of the date of this announcement, if no other shares were issued by Metal Tiger, represent 41.1 per cent. of the current issued share capital of the Company.

 

Licensed area

 

The exploration licence (Treparriscos 3 No 6.858) covers an area of 2,987 hectares surrounding the town of Navasfrias in the Salamanca Province of Northwest Spain.  The license was granted to Qbis on 20 September 2013 for a period of three years by the Mining Department of the Casitlla y Leon provincial government.

 

The Board understand that Alluvial gold has been found in the Ãgueda River, a tributary of The Douro which forms the border between Spain and Portugal and which flows through the tenement.  Organised mining operations were extensive in the region until 1940 extracting tungsten, tin and gold and local residents continued to pan for gold in the tenement until the 1950s. Several mining companies successfully extracted tin and tungsten during the 1970s and 1980s.

 

The Board considers that there is the potential to explore the project's tenement area more thoroughly, primarily for gold, using modern exploration techniques such as aerial, geophysical and geochemical surveys.

 

For further information on the Company, visit: www.metaltigerplc.com or contact:

 

Cameron Parry

(CEO)

 

 

Tel: +44 (0)207 099 0738

Paul Johnson

(Non-Executive Director)

 

 

Tel: +44 (0)7766 465 617

Nick Athanas

Alex Price

 

Allenby Capital Limited

(Nominated Adviser and Joint Broker)

Tel: +44 (0) 20 3328 5656

Lucy Williams

Duncan Vasey

 

Peterhouse Corporate Finance

(Joint Broker)

Tel: +44 (0) 20 7469 0935

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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