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In the news: Metal Tiger

In the news: Metal Tiger

Metal Tiger*

MTR : LN | 2.6p | US$39m | Buy | TP : 3.6p

Copper Mineralisation in First Hole Drilled at A4 Target within the T3 Dome Area

Metal Tiger and JV partner MOD Resources have announced that the first hole drilled at the A4 Target on the T3 Dome has intersected multiple traces of visible, vein-hosted copper mineralisation. Numerous quartz carbonate veins were reported to have been intersected with traces of fine to coarse grained copper sulphides from 360-450m down-hole. The mineralisation was hosted in sediments below the interpreted T3 Marker Unit.

COMMENT: This announcement is yet another reminder of the prospectivity of the exploration package that the JV controls along 200km of the Kalahari Copper Belt. The A4 Target is one of many drill targets that have been identified from an airborne EM survey that are planned to be tested on the larger, 60km long T3 Dome structure. We await the announcement of assay results from the programme with interest.

Five rigs will soon be in operation to test these targets. The company has also applied for the permits required to commence drilling on the large, 70km long T20 Dome area to the south-west of the T3 Dome area. The company has pushed out the expected start date of drilling from August to September.

A large number of copper occurrences have been discovered in the Kalahari Copper Belt near the geological contact between a package of shales/siltstones and the underlying sandstones. Although we anticipate the discovery of additional, possibly widespread, copper mineralisation in this environment, we believe the real prize would be the discovery of deposits that have been the beneficiary of the structural preparation that resulted in the development of wider-than-usual, high-grade mineralisation at deposits such as the JV’s T3 deposit and Cupric Canyon’s Zone 5 deposits. With a large number of well-defined targets to be tested this year, we are optimistic about the programme’s potential to deliver another discovery.

At the company’s 30%-owned Kalahari Copper JV with MOD Resources, the completion of the DFS on the main T3 Copper Project has been pushed back from the end of the year into 1Q19. This is also planned to include a scoping study into the development of an underground operation at the main T3 deposit.

 

We reiterate our Buy rating and target price (TP) of 3.6p. The company’s current market cap is equivalent to approximately US$39m and our TP is based on a risked SotP value of US$49m. This comprises US$13m of cash and investments, an adjustment of US$15m for corporate overheads, US$10m for the company’s other interests and a risked value of US$41m for its 30% interest in the Kalahari Copper JV. 

This content has been approved under section 21(1) of the FMSA 2000 by RFC Ambrian Limited ("RFC Ambrian") for communication only to eligible counterparties and professional clients as those terms are defined by the rules of Financial Conduct Authority. The contents are not directed at retail clients as RFC Ambrian does not provide investment advisory services to retail clients.  RFC Ambrian publishes this document as non-independent research which is a marketing communication under the Conduct of Business rules. It has not been prepared in accordance with the regulatory rules relating to independent research, nor is it subject to the prohibition on dealing ahead of the dissemination of investment research. It does not constitute a personal recommendation and does not constitute an offer or a solicitation to buy or sell any security. Neither RFC Ambrian nor any of its directors, officers, employees or agents shall have any liability, howsoever arising, for any error or incompleteness of fact or opinion in it or lack of care in its preparation or publication; provided that this shall not exclude liability to the extent that this is impermissible under the law relating to financial services. All statements and opinions are made as of the date on the face of this document and are not held out as applicable thereafter. This document is intended for distribution only in those jurisdictions where RFC Ambrian is permitted to distribute its research. In particular, it is not intended for distribution in and is not directed as persons in the United States.  On the date of this document, RFC Ambrian, RFC Ambrian's holding company, persons connected with it and their respective directors may have a long or short position in any of the investments mentioned in this document.
RFC Ambrian is a member of the London Stock Exchange and is regulated and authorised by the Financial Conduct Authority. RFC Ambrian is registered in England and Wales no. 4236075. Its registered office is at Level 5, Condor House, 10 St Paul’s Churchyard, London EC4M 8AL.

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