Metal Tiger (LSE:MTR) advanced 2.2pc to 1.9p this morning after reporting that the sale of its T3 project and the creation of a new exploration joint venture with MOD Resources will complete by the middle of this month.

As announced in July, Metal Tiger has sold its 30pc interest in the T3 Project for MOD shares and options worth a total of A$27.7m. As part of this agreement, the two firms have entered into a new joint venture covering the remainder of their exploration licences – excluding T3 – in Botswana’s Kalahari Copper Belt. Metal Tiger will own a 30pc stake in this JV, with its exposure to any future discoveries further boosted by its considerable stake in MOD Resources.

Last month, the businesses received ministerial approval for the transfer of eight JV licences into the new joint venture, which will be called Tshukudu Exploration. Transfer approval for the remaining ten permits is pending. In today’s update, Metal Tiger said the only outstanding precedent for the deal’s completion is the demerger itself.

When it first announced the sale of T3, Metal Tiger said MOD’s 100pc ownership would make the asset more attractive to potential financiers while maintaining exposure for its shareholders. At the time, chief executive Michael McNeilly added:

We are delighted to sign this deal with our long-standing partner MOD, which is the culmination of five months of hard work on both sides. We believe this deal represents an exceptional outcome for both Metal Tiger and MOD shareholders and the optimal path forward for the advancement of the T3 Project. The creation of the new exploration JV preserves and formalises Metal Tiger and MOD’s highly successful exploration partnership in the Kalahari Copper Belt where we continue to see scope for substantial value creation in the short term and will continue to draw upon the joint financing capabilities of both the London and Australian markets.

‘Through the transaction, Metal Tiger will become the largest shareholder in MOD and is pleased to give its full support to the MOD Board to continue their excellent work in the management of exploration activities and the expeditious development of T3. We have full confidence that Metal Tiger’s investment in MOD will deliver exceptional returns for Metal Tiger shareholders.’

Aside from its interests in Botswana’s Kalahari Copper belt, Metal Tiger has a pipeline of additional investments. In Spain, it has tungsten and gold interests in the highly-mineralised Extremadura region.  Meanwhile, in Thailand, the business owns stakes in two potentially near-production-stage silver/lead/zinc mines. It also holds licences, applications and critical historical data covering antimony, copper, gold, silver, lead and zinc opportunities in the country.

Author: Daniel Flynn

Disclosure: The author does not own shares in the company mentioned in this article