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Thailand - Commercial Mines Joint Venture Agreement Signed

Metal Tiger Plc

23 August 2016

Metal Tiger Plc

("Metal Tiger" or the "Company")

Thailand - Commercial Mines Joint Venture Agreement Signed

Metal Tiger plc (LON:MTR) the London Stock Exchange AIM listed investor in strategic natural resource opportunities is pleased to announce that on Saturday 20 August 2016 the Company successfully concluded commercial negotiations and a Joint Venture Agreement (“JVA”) was signed in respect of the Song Toh and Boh Yai Silver-Lead-Zinc mines in Western Thailand. The JVA was subject to certain regulatory clearances which were received on 22 August 2016.

The JVA governs the process and ownership elements of a transaction where the principal objective is to permit and bring back into production the Silver-Lead-Zinc mines at Boh Yai and Song Toh (the “Mineral Properties”).

We refer readers to the market announcement by the Company dated 11 April 2016 covering the Standstill Letter Agreement (the “SLA”) relating to the Mineral Properties, as extended by the Company’s announcement dated 7 July 2016.

The parties to this JVA are the Karnchanaburi Exploration and Mining (KEMCO) Company Limited (“KEMCO”), Boh Yai Mining Company Limited (“BYMC”) and Pornnaret Klipbua (“Pornnaret”) the majority and controlling shareholder of both KEMCO and BYMC (the “Mine Vendors”). Also, Metal Group Co. Ltd (“Metal Group”) and Metal Tiger Exploration Company Limited (“MTE”) (the “Joint Venture Companies”); and finally Metal Tiger plc (as defined above).

KEMCO and BYMC hold several Historical Mining Lease Applications and the physical mining and processing plant assets at the centre of this transaction.

Paul Johnson, Chief Executive Officer of Metal Tiger commented:

“We are delighted to confirm a successful outcome to our contractual negotiations and this signed JVA. The Boh Yai and Song Toh mines represent an exceptional opportunity for all parties to this agreement and we look forward to the Joint Venture pushing proactively forward. As is Metal Tiger’s policy we will continue to regularly update the market with developments.

The Joint Venture will be proactively pursuing the various stages of the permitting process and the structure of the transaction is such that near term transactional costs are modest, with the larger payments scheduled for post permitting approvals when the inherent value of the project should have increased materially.

A transaction of this type, in effect a collaboration between Thai interests and a UK listed entity, are relatively rare at the moment. Given our knowledge of the Thailand business environment, and the opportunities available, we are very pleased to reach this pivotal stage.

The JVA represents the culmination of a significant amount of work by all parties and Metal Tiger would like to note on record its thanks for the dedication and support of all the parties engaged in this process of negotiations.

Metal Tiger is privileged to be investing in Thailand, a country that holds substantial opportunities for respectful, diligent and committed investors. We would reiterate that our objective is to invest in and help develop Thai resource opportunities, for the primary benefit of the Thai people, and to do so with an absolute focus on the protection of the environment and the communities with whom we engage.

As part of our communications and in addition to the engagement we are undertaking in Thailand we will be holding meetings in the UK with our Thai Joint Venture partners and Corporate Social Responsibility Manager present, to enable any shareholders, investors and other market participants to have their questions and queries addressed in a public forum.”

Pornnaret Klipbua, Managing Director of KEMCO and BYMC commented:

“I am delighted with the successful outcome following extensive negotiations with Metal Tiger and their Thai Joint Venture Partners. Metal Tiger with their financing capability and their Thai Joint Venture Partners with their sector and in-country knowledge have demonstrated to me that they have the requisite abilities to make this a highly viable partnership and I look forward to diligently working with them to successfully permit and bring back into production the Song Toh and Boh Yai Silver-Lead-Zinc mines.

This is an exciting project that will provide hundreds of jobs in Kanchanaburi and be of major benefit to the local Thai economy as well as the Thai people in general. It is my firm belief that this partnership will lay the foundation for further investment opportunities for Metal Tiger in the natural resources sector in Thailand.”

Highlights:

  • Metal Tiger has agreed a right for its Thai Joint Venture Companies to acquire 80% of the shares of BYMC which holds several Mining Lease Applications. In addition, the transactional rights include the transfer of granted licences from KEMCO into BYMC thereby centralising the Mineral Property interests into one operating company.
  • All activities in respect of operations shall be managed on behalf of the parties by various JV Management Committees. Metal Tiger will provide finance against an agreed budget. All operational matters are solely in the hands of the local Joint Venture team.
  • The transaction is based on defined payments set against a defined delivery schedule and a commitment from Metal Tiger plc to fund up to US$1,500,000 in respect of permitting costs. Reflecting the acquisition of ownership rights the following payments are to be made to the Mine Vendors:
  • Total of US$130,000 on signing the SLA payable as US$50,000 in cash and US$80,000 payable in Metal Tiger shares (US$130,000 already paid);
  • Total of US$800,000 on signing the JVA payable as US$400,000 in cash and US$400,000 payable in Metal Tiger shares (payable no later than 2 September 2016);
  • Total of US$6,000 per month which amounts to US$108,000 over an estimated 18 month permitting period for the general costs of the Mine Vendors including the costs of maintaining the current staff base keeping the mines on a care and maintenance basis whilst permitting is undertaken;
  • Total of US$500,000 payable in cash on the granting of BYMC Mining Lease Applications;
  • Total of US$625,000 payable as US$250,000 in cash and US$375,000 in Metal Tiger plc shares on the commencement of construction (ie plant, housing, water treatment and some mine refurbishment);
  • Total of US$625,000 payable as US$250,000 in cash and US$375,000 in Metal Tiger plc shares on the commencement of commercial mineral production;
  • Total of US$1,500,000 in respect of a hire purchase agreement on production to transfer the physical assets of the mine and processing plant into the BYMC;
  • In addition the Joint Venture will guarantee the Mine Vendors, against their ownership interest an annual a minimum of US$200,000 profit share for the first five years of mine operations (ie US$1,000,000 in total guaranteed).

Reflecting all the above the total payments, at the volition of Metal Tiger with the exception of the initial JVA signature payment of US$800,000, to secure the specified Thai JV interest in the Mineral Properties amounts to US$5,288,000 (or £4,008,171 at current US$ to £ currency translation rate).

  • Payments are focused on the key stages of project development with most payable only on the achievement of permitting, construction/refurbishment and production milestones over an estimated two year period.
  • This announcement has been prepared with summary transaction information enabling an expeditious release in line with the latest Market Abuse Regulations. Further announcements will be made in due course to detail the overall JVA operational and strategic plans in respect of the Mineral Properties.

As at 31 December 2015 being the date of the last published accounts KEMCO had net liabilities of Thai Baht 1,244,332 and made a loss for the year of Thai Baht 1,502,102.

As at 31 December 2015 being the date of the last published accounts BYMC had net liabilities of Thai Baht 1,848 and made a loss for the year of Thai Baht 131,271.

Note: This announcement contains inside information which is disclosed in accordance with the Market Abuse Regulation.

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

Paul Johnson (Chief Executive Officer)     Tel: +44 (0)7766 465 617
Terry Grammer (Non- Executive Chairman) Tel: +44 (0)207 099 0738
Sean Wyndham-Quin

Neil Baldwin

Nick Emerson

Andy Thacker

Spark Advisory Partners Limited

(Nominated Adviser)

SI Capital

(Sole Broker)

Tel: +44 (0) 2033 683 555

 

www.sparkadvisorypartners.com

Tel: +44 (0) 1483 413 500

Notes to Editors:

Metal Tiger plc is listed on the London Stock Exchange AIM Market (“AIM”) with the trading code MTR and invests in high potential mineral projects with a precious and strategic metals focus.

The Company’s target is to deliver a very high return for shareholders by investing in significantly undervalued and/or high potential opportunities in the mineral exploration and development sector timed to coincide, where possible, with a cyclical recovery in the exploration and mining markets. The Company’s key strategic objective is to ensure the distribution to shareholders of major returns achieved from disposals.

Metal Tiger’s Metal Projects Division is focused on the development of its key project interests in Botswana, Spain and Thailand. In Botswana Metal Tiger has a growing interest in the large and highly prospective Kalahari copper/silver belt. In Spain Metal Tiger the Company has tungsten and gold interests in the highly mineralised Extremadura region. In Thailand Metal Tiger has expanding interests over licences, applications and critical historical data covering antimony, copper, gold, silver, lead and zinc opportunities.

The Company has access to a diverse pipeline of new opportunities focused on the natural resource sector including physical resource projects, new natural resource centred technologies and resource sector related fintech opportunities. Pipeline projects deemed commercially viable may be undertaken by Metal Tiger or by an ISDX or AIM partner with whom the Company is engaged.

Metal Tiger also has an Asset Trading Division that holds various financial instruments for trading purposes including equities, warrants and royalty income. The aim of the division is to generate profits to reinvest into the Company’s project based activities.

Copyright Business Wire 2016