Metal Tiger PLC (AIM:MTR, OTC:MRTTF, ASX:MTR) has agreed to sell its 49% interest in Kalahari Metals Limited (KML) to Cobre Limited, which owns the other 51% of KML.
The AIM and ASX-listed investor in natural resource opportunities said Cobre will acquire 24.5% of the shares in KML for a cash consideration of £750,000 – expected to be paid in September – which Metal Tiger will use for general working capital purposes.
Metal Tiger will grant Cobre a call option for it to acquire the remaining 24.5% of Metal Tiger's shares in KML, exercisable for either £750,000 cash or the equivalent in Cobre shares (based on a 90-trading day volume-weighted average price) at the sole election of Cobre, providing Cobre a pathway to 100% ownership of KML.
The call option will lapse 12 months after completion of the cahs purchase by Cobre of the 24.5% stake, and if not exercised by Cobre, Metal Tiger will remain a 24.5% shareholder in KML.
“Since our initial investment in KML, we have seen significant exploration activity across the business, increasing our understanding of their licences. With our 21% shareholding in Cobre we will still be involved in the KML story where we continue to firmly believe in the potential for Copper-Silver discoveries in Botswana and look forward to facilitating the next stage in the Company’s development through this deal,” said Michael McNeilly, the chief executive officer of Metal Tiger.
“Whether or not Cobre elects to acquire the entirety of Metal Tiger’s KML shareholding this deal marks the end of Metal Tiger’s project investment division, and the company will no longer consider joint ventures as part of its strategy. By no longer needing to be committed to funding a project which requires monthly cash calls the company will free up resources to implement operational improvements to optimise the assessment and management of potential and existing investments. This transition amongst other corporate strategies which are in the process of either being implemented or evaluated will allow the company to operate more efficiently, improve the investment story and create a platform from which the team can focus on substantially growing the company’s net assets. We are excited by the transition this deal allows for the business and we will update shareholders on further progress across the business at the appropriate time,” McNeilly said.