Metal Tiger PLC (LON:MTR) said its private placement offering, run by Sprott Capital Partners has raised even more than expected, with gross proceeds of £4.85mln received by the closing date yesterday.
The AIM-listed strategic natural resources investor said the fundraise, the largest by the company to date, included a total of £4.39mln raised through Sprott – above the £4.29mln targeted – while a further £460,000 was raised through a placing and subscription of shares by the company.
The group said 161,666,666 new ordinary shares in Metal Tiger were placed at a price of 3p each, while 161,666,666 warrants to subscribe for 1,666,666 new ordinary shares were also issued at an exercise price of 6p per warrant, within a 5 year period.
Meanwhile, Metal Tiger said bookrunner Sprott will receive 4,850,000 Finder Warrants in Metal Tiger, equal to 3.0% of shares issued under the placing, permitting the purchase of one Warrant Share for five years from the offer closing date at a price of 3p per unit.
Upon exercise of a Finder Warrant, Sprott will also be entitled on a 1 for 1 basis to a 6p warrant with a 5 year validity which could see the private wealth group entitled to a further 4,850,000 warrants at a 6p exercise price with a 5 year validity.
In late morning trading today, Metal Tiger shares were 7%, or 0.2p higher at 2.95p.
In a note to clients following today’s news, broker VSA Capital reiterated a ‘buy’ rating on Metal Tiger but reduced their target price for the stock by 17% to 4p to reflect the dilution from the placing.
In its statement, Metal Tiger said the placing included contributions from UK and international investors, with £460,000 coming from the UK, while the international funds primarily came from institutional investors.
Level of institutional support "extremely satisfying", says Metal Tiger boss
Michael McNeilly, Metal Tiger’s chief executive officer, said: “The level of institutional support has been extremely satisfying and is demonstrable of the maturity and evolving nature of the business since the beginning of the financial year."
The cash call funds will be used for the company to advance its interests across its mining portfolio, but in particular for the T3 project in the Kalahari Copper Belt in Botswana where Metal Tiger has a joint venture with MOD Resources.
McNeilly added: “Metal Tiger is now well positioned to advance its main direct project interests, in particular matching its important 30% contribution toward the JV in Botswana both in regards to further exploration and to the T3 project as it moves up the development curve through PFS, DFS and ultimately to a decision to mine.
“This raise also gives Metal Tiger greater comfort with regard to the spin out of its Thai assets.“
Metal Tiger first announced plans to raise some cash at the end of March, although it was only originally looking to generate £3mln, but it expanded that target and also extended the closing date for three days to April 20.