Metal Tiger PLC (LON:MTR) shares gained on Wednesday after news it has signed a binding investment agreement to acquire up to 50% of Botswanan- focused explorer Kalahari Metals Limited (KML) for a total consideration of US$1.6mln.
The AIM-listed company said it has exercised the first option under the agreement and is to be issued 18% of the enlarged share capital of KML for a total consideration of US$600,000. And the company will also appoint two non-executive directors to the board of KML.
Metal Tiger said KML is a privately owned company and holds interests in seven highly prospective exploration licences covering 4,063km2 in the Kalahari Copper Belt, consisting of two 100% owned exploration licences and five exploration licences subject to a binding earn-in agreement with Triprop Holdings Limited.
Michael McNeilly, chief executive officer of Metal Tiger, said: ”The signing of this deal with Kalahari Metals Limited follows 3 months of substantial corporate and technical due diligence and is a further exciting milestone in Metal Tiger’s continuing involvement in a world-class copper region in Botswana.”
He added: “Based on our initial discussions, key focus will be to conduct geophysics and soil geochemical surveys to identify high priority targets for drilling as well as commence work on the environmental management plans for areas likely to be of interest for drilling in the near term.
In mid-morning trading, Metal Tiger shares were nearly 2% higher at 2.6p.
City broker RFC Ambrian reiterated its ‘buy’ rating and 3.6p target price on Metal Tiger.
In a note to clients, its analysts said: “Through this transaction Metal Tiger is increasing its exposure to the prospective Kalahari Copper Belt and thereby its optionality.
“It is earning into a large portfolio of early-stage exploration licences that are along-strike from the established resources at its own JV with MOD Resources and those of the private Cupric Canyon.
“The results of the three holes announced from Triprop’s scout drilling programme indicate the presence of mineralisation, and we await further news of the planned exploration with interest.”
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