logo-loader

Metal Tiger lines up a summer listing for Thai subsidiary

Published: 12:09 16 Mar 2017 GMT

Metal Tiger lines up a summer listing for Thai subsidiary
Underground at the Boh Yai mine

It’s looking like a summer IPO for the Thai mining interests currently held by Metal Tiger PLC (LON:MTR).

The plan, according to Metal Tiger’s chief executive Michael McNeilly, is to raise between £3 mln and £4 mln from investors in London and Asia, following the results of consulting work that will provide a detailed economic appraisal of the properties.

“We’re targeting an IPO in June or July,” he says.

“We’re going through the process of completing all the key reports. SRK is working on a Competent Person’s Report and reviewing the resource update. Hopefully the first draft of that will be done by the end of the month and then by late April we will be able to put out the economic numbers of the project.”

The primary assets are two underground silver-lead-zinc mines which were worked between 1978 and 2002, and for which considerable infrastructure remains in place, including a plant.

Because of this, the restart of the project will not be too capital intensive, and the main risk moves over to permitting.

Here, the implications of a new mining act that’s coming into force later in the year will have to be studied, but it’s worth noting that Thailand has had a relatively active mining industry, with tin in the south and continues to have active phosphates and aggregates mining elsewhere.

Metal Tiger itself has been in-country only a short while, but has always professed itself at ease working in Thailand. And he’s not the only one.

“There are a lot of mining people in Asia who are comfortable with how Thailand works,” says McNeilly.

So, with that in mind, and with the mining markets on the turn, it’s perhaps no surprise that Metal Tiger has just been able to secure just over £500,000 in pre-IPO money for KEMCO PLC, company that will be used as the listing vehicle.   

This pre-IPO money isn’t coming in just to turn a fast buck on listing. On the contrary, the deal was set up such that the new investors now have two sets of warrants, one to convert to shares at 20% below the listing price, but one which converts after at 50% higher than the listing price.

So there is both motivation and expectation of a strong performance, and it’s noticeable that Metal Tiger directors, including McNeilly are now on the KEMCO register with personal stakes.

But what will the company do once it’s come to the market?

“This is a brownfields site,” says McNeilly. “There’s exploration upside. There’s been no exploration at depth. It’s already a very advanced project.”

Indeed, back in 2013 independent consultants demonstrated that as a foundation, KEMCO could work to a combined NI 43-101 resource of 4.85 mln tonnes, comprising 2.9 mln tonnes of 3.57% lead, 2.82% zinc and 72.63 grams per tonne silver in the indicated category, with a further inferred resource of 1.96 mln tonnes grading 2.95% lead, 3.08% zinc and 49 grams silver.

This information will now be fed into the new calculations that are currently being put together.

A previous report published in 2013 mentions the previous capital cost estimate of US$13 mln, but McNeilly says that the company with SRK’s advice will be “revisiting” that figure.

“In April we will have an update that we can rely on,” he says.

After that there’ll be a concerted marketing campaign ahead of the listing.

Metal Tiger is likely to retain at least 51% of the newly listed vehicle, so existing shareholders will retain a significant part of the upside. But they’ll also be able to take some money off the table as a distribution in specie is planned.

After that the focus will turn more squarely onto the company’s copper assets in Southern Africa.  But that’s another story.

 

Cordiant Digital Infrastructure marks three years of strategic growth and...

Cordiant Digital Infrastructure Ltd (LSE:CORD) Chairman of Digital Infrastructure Steven Marshall and Chief Financial Officer Mark Tiner joined Steve Darling from Proactive to provide some insight on the company’s three-year anniversary since listing on the London Stock Market. The company...

7 minutes ago