Metal Tiger PLC Response to Shareholder Letter Issued by Kingsgate
December 29 2017 - 1:00AM
RNS Non-Regulatory
TIDMMTR
Metal Tiger PLC
29 December 2017
Metal Tiger plc (MTR)
29 December, 2017
Metal Tiger Plc
("Metal Tiger" or the "Company")
Kingsgate Consolidated Limited - Response to the Shareholder
Letter dated December 27, 2017
Metal Tiger Plc (LON:MTR) would like to clarify certain facts
relating to the shareholder letter issued by Kingsgate Consolidated
Limited on 27 December 2017.
Kingsgate made the following statements which are misleading and
do not reflect the Proposed New Board's strategy:
"Metal Tiger has no credible operating plan for Kingsgate and
could make an agreement with the Thai Government without any
compensation"
The proposed new board intends to restart the Chatree Gold Mine
("Chatree" or "the Mine") through the application for the renewal
and granting of mining, processing and exploration licences by the
Government of Thailand. Discussions with the Thai Government have
been initiated. Metal Tiger expects the Thai Government to be
responsive to the positive proposals of the proposed Board of
Kingsgate. Substantial value can be created for Kingsgate
shareholders through the mining of remaining gold reserves at
Chatree and through the pursuit of exploration of highly
prospective gold properties previously drilled by Kingsgate.
In addition, the proposed new board will seek to negotiate
favourable terms with the Government of Thailand relating to the
restart of Chatree given the circumstances surrounding the recent
closure, which may include a compensation claim for loss of
earnings. Metal Tiger, as the largest shareholder of Kingsgate, is
aligned with all shareholders and incentivised to support the new
board of Kingsgate so that it may pursue the best financial outcome
for Kingsgate shareholders.
"No mainstream lender would lend money to re-open Chatree after
it has been arbitrarily closed"
During the course of November and December, Metal Tiger had
several meetings with highly credible financial advisors. These
advisers were extremely confident that, subsequent to the renewal
of and granting of new mining, processing and exploration licences,
they would be able to run a competitive process with a number of
Asian lending banks and private debt funds to raise the necessary
debt finance to restart the Chatree Gold Mine.
In addition, in December 2017 a number of potential strategic
equity investors commenced detailed due diligence on the Chatree
Gold Mine based on publicly available information and have
indicated an interest to the proposed new board of Kingsgate in
pursuing further due diligence based on non-public information,
once the new board has been appointed, with a view of making a
substantial equity investment. These investors include sovereign
wealth funds, private equity funds, major family offices and
brokers.
"No competent board would borrow money to do so after what has
happened"
The Chatree Gold Mine will comfortably support a conservative
debt and equity financing package to restart the Mine. This is due
to the limited estimated restart capex requirement of US$50m as
stated by Kingsgate's Board at the latest AGM (although the
proposed Board expects the restart costs will need to be higher
than US$50m to adhere to the recent gold policy), the expected high
free cash flow generation and the relatively short payback period,
based on financial due diligence from publicly available
information on Chatree.
In addition, any debt financing provided by Thai lending banks
will further align the interests of Kingsgate shareholders and
other Thai stakeholders with the Government of Thailand, something
which the existing Kingsgate Board has been unable to achieve.
The proposed new board of Kingsgate is highly competent and has
a strong track record of raising finance for mining companies. The
new board will only pursue appropriate financing solutions that are
in the best interest of all Kingsgate shareholders.
"Although Metal Tiger has no definable plan, it almost certainly
would resort to what it has done before, and issue hundreds of
millions of shares to the point where your shares would have very
little value"
The proposed new board of Kingsgate intends to pursue financing
solutions for the restart of the Chatree Gold Mine that will limit
dilution of value for existing Kingsgate shareholders, including
Metal Tiger. Equity finance will be required and this can be raised
at both the asset and corporate level, subject to the most
competitive financing terms. In addition, non-dilutive forms of
financing will be solicited including gold streaming.
"Metal Tiger has made claims about the near term development of
Nueva Esperanza citing a high capex and low economic returns which
are completely unsubstantiated, and with which the numerous
entities that are vying to participate in it and/or finance it
would clearly disagree"
We refer Kingsgate shareholders to the Nueva Esperanza fact
sheet on the Saving Kingsgate website:
http://savekingsgate.com/fact-sheets/
The proposed new board of Kingsgate will seek to maximise the
value of Nueva Esperanza for the benefit of Kingsgate shareholders
and will consider all options.
"Metal Tiger intends replacing Peter Alexander on the Kingsgate
Board with an un-named, unidentified director."
The proposed new board wishes Peter Alexander to continue to
serve on the Kingsgate board and does not intend to replace him and
has clearly made this point. However, if Peter Alexander does wish
to resign from the Kingsgate board, then, due to the importance
placed on good corporate governance, the new proposed board will
appoint another new independent director with appropriate skills
and experience.
Metal Tiger urges that shareholders vote FOR all the motions at
the General Meeting on
January 9, 2018.
For further information on the Company, visit:
www.metaltigerplc.com and http://savekingsgate.com
Michael McNeilly (Chief Executive Officer) Tel: +44(0)20 7099 0738
Keith Springall (Finance Director & Company Secretary) Tel: +44 (0)20 7099 0738
Gordon Poole Camarco Tel: +44 (0)20 3757 4980
James Crothers (Financial PR)
Australian Media
Michael Weir Citadel-MAGNUS +61 402 347 032
Yvonne Ball Citadel-MAGNUS +61 448 232 398
This information is provided by RNS
The company news service from the London Stock Exchange
END
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