TIDMMTR
Metal Tiger Plc
18 September 2017
Metal Tiger Plc
("Metal Tiger" or the "Company")
KEMCO PLC IPO update
Metal Tiger Plc (LON:MTR), the London Stock Exchange AIM listed
investor in strategic natural resource opportunities, announces
that the Board has taken the decision to postpone the IPO of its
Thai Joint Venture over the two silver-lead-zinc mines until Q1
2018.
Rationale for postponing IPO:
The Board has decided to delay the Thai IPO for the following
commercial reasons:
-- Pre-marketing feedback;
-- New Thai Minerals Act and National Mineral Management Policy Committee;
-- Community vote; and
-- Further clarification on the Master Plan will enhance the valuation.
Test-marketing feedback:
The Company has met with several potential investors, including
several family offices introduced by Charles Hall (Chairman of
Metal Tiger) and received serious interest in the IPO based on the
merits of the project. Notably, six family offices have expressed
substantial interest in investing in the IPO. The Company has also
discussed the project with a large commodities trading firm which
has indicated it will send a Letter of Intent for offtake financing
and have also expressed an interest in seeing the pathfinder
admission document to consider an equity investment. Such interest
from sophisticated investors validates the fact that we are in a
strong base metals market with zinc being one of the top performers
given the prevailing global supply constraints. A number of
potential investors have requested a postponement of the IPO to Q1
2018 to seek clarification on certain aspects of the new Thai
Minerals Act and the National Minerals Management Policy.
National Minerals Management Policy and new Thai Minerals
Act:
On 29 August 2017 the new Thai Minerals act, Minerals Act B.E.
2560 (A.D. 2017) (the "2017 Minerals Act") came into effect
replacing and consolidating the Minerals Act B.E. 2510 (A.D. 1967),
last amended in 2002, and the Mineral Royalty Act B.E. 2509 (A.D.
1966), last amended in 1979, into a single statute and made several
changes to the 1967 Minerals Act.
The key changes are:
-- Adding a new committee, i.e. National Mineral Management Policy
Committee;
-- Establishing Minerals Management Master Plans;
-- Revising the limited areas for mining;
-- Revising types of prospecting and mining leases;
-- Revising validity periods of the licenses;
-- Changing license issuer authority;
-- Environmental and social concern; and
-- Adding civil liability (punitive compensation).
Under the 2017 Minerals Act, the Ministry of Natural Resources
and Environment and the Ministry of Industry ("MOI") will have
responsibility and supervisory power to enforce the 2017 Minerals
Act. However, the Department of Primary Industries and Mines
("DPIM") and MOI are still the government bodies responsible for
the supervision of exploration and mining operations and of other
mining related activities.
Under the new act, an additional committee is to be established
called the National Minerals Management Committee (the "NMC"),
which includes amongst others, the Prime Minister (as chairman),
Minister of Natural Resources and the Environment, Minister of
Industry, Minister of the Interior, and Minister of Agriculture and
Cooperative (as vice-chairman), representatives of Local
Administrative Organizations and non-governmental Organizations
including industry bodies (as qualified committee).
The NMC is empowered to, among other things, propose strategies,
policies, and minerals management master plans (the "Master Plans")
to Cabinet for approval. The first Master Plan will be prepared and
updated by the NMC every five years. As part of this plan the NMC
will need to designate areas that are mineral abundant with high
economic value as mineral deposit areas for mining (the "MDAs").
Under the 2017 Minerals act, mining in preserved areas or mining of
preserved minerals specified in Master Plans is prohibited.
Moreover, the 2017 Minerals Act expressly provides that mining
operation will only be granted in MDAs. It is worth noting that the
2017 Mineral Act does not require that mineral prospecting be
undertaken in the MDAs only.
Key team members, including the Thai JV partner, Pornnaret
Klipbua, Surapol Udompornwirat (Permitting Manager) and the
Company's Thai lawyers, DFDL, have attended numerous consultations
on the new Mining Act 2017. These consultations included talks on
the minerals management master plans, led by the Department of
Mineral Resources Thailand and DFDL have produced minutes
summarising the key points from these meetings. The DMR is
responsible for submitting the draft submission of MDA "zones" for
consideration by the NMC. The Company has met with key
representatives from the MOI as well as the DMR and based on these
conversations is confident that the areas over which the Thai JV
has Mining Lease Applications will be designated as MDAs. This is
in part because of the project's historical operations, defined
resource and clear economic potential of the area, and also due to
the fact that the JV has existing applications over the area.
Conversations with various government officials as well as press
releases indicate that the timing for submission of a final draft
regarding the designation of the MDAs for consideration by the NMC
is expected to occur in November 2017 and subsequently to be
considered and approved by the NMC in December. Furthermore, this
timing is backed up by a strong commercial rationale, since delays
will have an impact on existing applications within the wider
minerals industry in Thailand and in particular, to the large
aggregates companies such as Siam Cement Group. As such, whilst the
Board of Metal Tiger takes comfort from its consultations and
meetings with regard to the project area being designated as a MDA,
it believes it would be more prudent based on investor feedback to
await confirmation of such designation prior to undertaking formal
IPO marketing (which the Company has not yet commenced). As such,
the Company believes it should postpone the IPO until Q1 2018 by
which time it expects that the first Master Plan will have been
published and the MDAs designated.
Valuation:
The Company believes waiting for clarification on the first
Master Plan will significantly improve the valuation at which it is
able to gain investor support. The Company notes that the
attributable NPV10 (post tax) for 80% of the project would be
valued at US$36,720,000 (GBP27,172,800) and therefore any valuation
would typically apply suitable permitting, country and corporate
overhead risk discounts to the valuation to determine the pre-money
valuation as well as look at comparable listed companies'
valuations. It would be difficult to determine a fair policy risk
discount and therefore the Board considers it best to postpone the
IPO. The Company believes it will also get a far better valuation
by postponing the IPO until Q1 2018 than what it could achieve if
it marketed prior to the first Master Plan being published.
Public Hearing for Thai JV Project
The Thai JV is preparing to hold a public hearing for the
project under Section 56 of the Mineral Act B.E. 2560. After a
minimum 30 day gazetting period a Mineral Industries Official
together with the Heads of the Villages where the mining project is
located shall co-organise a "Public Hearing" attended by
stakeholders, including villagers who live in the radius of 3km
from the boundary of the mining lease application, committee of the
village where the mining lease application is located and by
Non-Government Organisations ("NGOs") established with the
objective of looking after natural resources and registered at the
Department of Environment Promotion. In the event that more than
half of the participants and more than half of members of the local
Administration Council agree with the mining project, the Mineral
Industries Official shall report the result of the meeting to the
provincial Governor and Director of the Department of Primary
Industries and Mines within seven days after receiving the
result.
In the event that more than half of the participants or more
than half of the members of the local Administration Council object
to the mining project, the Mineral Industries Official shall report
the results of the meeting together with the reasons for the
objection to the provincial Governor and Director of the Department
of Primary Industries and Mines, who will consider the reasons for
the objection. If the reasons are not acceptable to them then they
will instruct the Minerals Industries Official to continue the
mining lease process.
If the grounds of the objection are judged valid then the
authority shall instruct the Mineral Industries Official to conduct
a meeting for a public vote.
The Thai JV will work to hold the public hearing before the year
end and believes it should receive a positive outcome.
Pre-IPO Investors
On Thursday 7 March 2017, the Company announced that it had
completed a successful pre-IPO private placing with High Net Worth
and Sophisticated Investors for KEMCO Mining PLC ("KEMCO"), which
is to be the listing vehicle for the Company's Thai JV.
Given the Company is only announcing the postponement of the
IPO, not a cancellation, the warrants will not immediately convert.
In accordance with their current terms, conversion of the warrants
into MTR shares will occur automatically on 13 October 2017,
however the Board of Metal Tiger intend to write to pre-IPO
investors requesting that they extend their conversion until this
time. Metal Tiger Directors and management who subscribed for
GBP67,000 have already agreed to delay the conversion until the end
of February 2018.
In either case the conversion price will be calculated by
reference to the 15-day VWAP of Metal Tiger shares following 13
October 2017 (or the extended date if applicable) less 20%. In
other words, and for the avoidance of doubt, in the event of
conversion on 13 October 2017, the VWAP is calculated from the
trading days between 16 October through to 3 November, less
20%.
A further announcement will follow in due course to update the
market.
Michael McNeilly, Chief Executive Officer of the Company,
commented:
"We have taken the difficult yet necessary decision to postpone
the Initial Public Offering of KEMCO Mining Plc until Q1 2018, as a
result of the implementation of the new Thai Minerals Act that will
make several important changes to the country's 1967 Minerals
Act.
Following initial conversations with government officials, we
remain confident that the areas in which the Thai Joint Venture has
Mining Lease Applications will be designated as MDAs. The
forthcoming release of the Master Plan and designated MDA's will
provide further clarification to potential investors, whilst also
delivering what we believe will be a boost to the proposed PLC's
valuation.
We are highly encouraged by the positive feedback we have had so
far in our meetings with potential investors and pre-marketing
roadshow and remain convinced by the strengths of the assets within
the Thai Joint Venture and the suitability of KEMCO Mining Plc as a
public company."
For further information on the Company, visit:
www.metaltigerplc.com:
Michael McNeilly (Chief Tel: +44(0)20 7099 0738
Executive Officer)
Keith Springall (Finance Tel: +44 (0)20 7099 0738
Director
& Company Secretary)
Stephen Allen or RFC Ambrian Ltd Tel +44 (0)20 3440 6800
Bhavesh Patel (Nominated
Adviser)
Jonathan Williams RFC Ambrian Ltd Tel +44 (0)20 3440 6800
(Joint Broker)
Nick Emerson SI Capital Tel: +44 (0)1483 413 500
(Joint Broker)
Andrew Monk VSA Capital Limited Tel: +44 (0)20 3005 5000
Andrew Raca (Joint Broker)
Gordon Poole Camarco Tel: +44 (0)20 3757 4980
James Crothers (Financial PR)
Notes to Editors:
Metal Tiger plc is listed on the London Stock Exchange AIM
Market ("AIM") with the trading code MTR and invests in high
potential mineral projects with a precious and strategic metals
focus.
The Company's target is to deliver a very high return for
shareholders by investing in significantly undervalued and/or high
potential opportunities in the mineral exploration and development
sector timed to coincide, where possible, with a cyclical recovery
in the exploration and mining markets. The Company's key strategic
objective is to ensure the distribution to shareholders of major
returns achieved from disposals.
Metal Tiger's Metal Projects Division is focused on the
development of its key project interests in Botswana, Spain and
Thailand. In Botswana Metal Tiger has a growing interest in the
large and highly prospective Kalahari copper/silver belt. In Spain
Metal Tiger the Company has tungsten and gold interests in the
highly-mineralised Extremadura region. In Thailand Metal Tiger has
interests in two potentially near-production stage silver/lead/zinc
mines as well as licences, applications and critical historical
data covering antimony, copper, gold, silver, lead and zinc
opportunities.
The Company has access to a diverse pipeline of new
opportunities focused on the natural resource sector including
physical resource projects, new natural resource centred
technologies and resource sector related fintech opportunities.
Pipeline projects deemed commercially viable may be undertaken by
Metal Tiger or by an AIM or NEX Exchange (formerly ISDX) partner
with whom the Company is engaged.
View source version on businesswire.com:
http://www.businesswire.com/news/home/20170917005053/en/
This information is provided by Business Wire
(END) Dow Jones Newswires
September 18, 2017 02:00 ET (06:00 GMT)
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