Metal Tiger

  • Metal Tiger (LSE:MTR) and MOD Resources (LSE:MOD) fell this morning after revealing that a hole drilled by their joint venture (JV) business in Botswana did not return commercial grades. However, with another hole intersecting wide zones of finely disseminated copper mineralisation, the firms said they remain ‘very encouraged’ by their initial results in the country’s Kalahari Copper Belt (KCB).

    Today saw the companies update investors on the exploration activities completed by JV business Tshukudu Exploration, formed earlier this year when Metal Tiger sold its stake in the T3 project, also based in the KCB. Tshukudu is 30pc-owned by Metal Tiger and 70pc-owned by MOD and controls exploration permits covering around 8,000km2 in the KCB. It is worth noting that Metal Tiger’s exposure is bolstered further by its 12.5pc stake in MOD.

    As previously announced, Tshukudu has been carrying out widely-spaced drilling at a prospect called the T23 Dome, which is part of the regional scale T20 exploration project. It sits around 15km west of another prospect called T4, where the JV intersected strong copper mineralisation in 2016, including an intersection of 2m at 6.1pc copper and 111 g/t silver from 101m depth.

    In today’s update, Tshukudu’s owners revealed the assay results for hole MO-T23-001D, its first foray into the T23 dome. It encountered a shallow intersection of 25m at 0.36pc copper and 4g/t silver from 65m downhole depth, including 3m at 0.7pc Cu & 10g/t Ag from 65m downhole and 1m at 1pc Cu & 13g/t Ag from 80m downhole.

    MOD said that while these are not economic grades, they do confirm that copper mineralisation occurs in the sequence – called the lower D’Kar formation – that hosts all known deposits in KCB. MOD added that this provides Tshukudu with the confidence to expand drilling to test the potential for high-grade vein systems and high-priority NPF contact along the structurally complex area.

    As at writing, Metal Tiger was trading down 13.5pc to 1.47p while MOD had fallen 7.6pc to 19.4p following the release of the news. These falls come despite a third diamond drilling hole at T23 – MO-T23-003D – intersecting wide zones of finely disseminated chalcocite and bornite copper mineralisation from 85m to 385m downhole depth. The hole also encountered a strongly mineralised vein at 268m, confirming the potential for high-grade vein-hosted mineralisation similar to other copper discoveries in the KCB. Tshukudu is now waiting for assay results that will confirm copper grades in the hole.

    Elsewhere today, both companies reiterated that airborne electromagnetic geophysics surveys carried out over T23, T4, and another site called T22 has identified numerous additional prospects. These include several new buried dome structures and fold features that offer structural drilling targets for a programme planned in early 2019.

    Multiple copper and zinc soil anomalies have also been identified to the south of T23, extending around 60km along the centre of the T20 exploration project and open to the west.  These will be high priority targets for drill testing early next year.

    On today’s results, Michael McNeilly, chief executive officer at Metal Tiger, said: ‘We are delighted to report another intersection of shallow copper mineralisation on the T23 Dome, which forms part of the T20 Exploration Project, 100km west of the T3 Project. With further drilling targets identified by the latest geophysics data interpretation and soil sampling results, we have a qualified pipeline of further exploration drilling targets and a good prospect of new discoveries for 2019.’

    Meanwhile, MOD's managing director Julian Hanna added: ‘While we are still at an early stage of exploring the T23 Dome, we are very encouraged by the first drilling results. Having confirmed the prospectivity of this area, our exploration team can now start testing the potential for high-grade mineralisation within specific structures defined by the EM.

    ‘MOD's discovery in March 2016 which is now the T3 Copper Project, followed by recent successes at the A4 and A1 Domes, and now the T23 Dome, suggests the Central Structural Corridor, which links all these occurrences, may represent one of the largest, most under-explored district scale targets for sediment hosted copper.’

    When we spoke to McNeilly earlier this month, he reiterated his excitement at the sizeable unexplored potential on offer across Tshukudu’s considerable acreage in the KCB:

    ‘There is just a huge amount of area that we haven’t even covered yet, and so many different target deposits where we are looking for T3-type deposits where the mineralisation has ideally been thrust up, concentrated and folded over into a nice slab mineralisation near surface. There are also many prospective Ngwako Pan Formation contacts that host other substantial copper deposits at depth. With this much going on, the right thing to do at this time is to demonstrate the area’s potential for development. This is why we are going off and drilling other targets and not just spending our money on one area.’

    Author: Daniel Flynn

    The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.
    The Author has not been paid to produce this piece by the company or companies mentioned above.
    Catalyst Information Systems Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.
    MiningMaven.com and Catalyst Information Systems Ltd are not responsible for its content or accuracy and do not share the views of the author.  News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

     

  • Thursday saw Metal Tiger (LSE:MTR) reveal that one of its investment companies has identified a series of drill-ready targets in Botswana’s prospective Kalahari Copper Belt (KCB). Kalahari Metals (KML) carried out the second phase of its airborne geophysics survey over two areas called the Ngami copper project (NCP) and the Okavango copper project (OCP).

    The work at NCP targeted numerous fold structures identified in the first phase of surveying that presented ideal trap-sites for high-grade copper-silver mineralisation. It created a higher resolution picture of these areas that ultimately allowed KML to identify three anticline dome targets.

    The targets are analogous to MOD Resources’ T3 deposit, which contains a 60Mt resources at 0.98pc copper and 14g/t gold.  KML has now proposed a combination of diamond drill holes to confirm conductors in each target. This will allow it to corroborate model results and zone in on potential mineralisation.

    Meanwhile, work at OCP identified a fold-closure target that KML has set out as a high priority for proposed diamond drill testing. It believes the site, identified through the mapping of marker conductors from assets held by Cupric Canyon, could host copper/silver mineralisation.

    Metal Tiger, which has the right to acquire up to 50pc of KML under an investment agreement established last June, dipped 1.5pc to 1.3p on the news. However, Michael McNeilly, Metal Tiger’s chief executive, said:

    ‘The increased resolution provided by the Phase-2 Airborne Electromagnetic and Magnetic survey data combined with Layered Earth inversion modelling has provided compelling structural and lithological targets for drill-testing. We are actively reviewing KML’s proposed diamond and reverse circulation drilling targets against the strong likelihood of adding significant value to the project through drilling. KML is awaiting sign off of feedback on the environmental management plan shortly for the Ngami licence and further updates will be provided to shareholders in due course.’

    KML doubled its exploration landholding in the KCB last November through an earn-in agreement with Resource Exploration and Development. This saw it acquire an interest in five recently granted exploration licences with a total area of 4,661km2. It now holds interests in 12 exploration licences covering 8,724km2 in the structure.

    Speaking to Mining Maven in December, McNeilly said the acquisition makes Metal Tiger the company with the biggest landholdings in the KCB globally. Alongside its indirect stake in KML, it is part of an exploration joint venture with MOD Resources that owns permits covering 8,000km2 in the area. It is also MOD’s largest shareholder, giving it significant exposure to the upside on offer at T3 without the burden of cash calls as the project develops.

    ‘We are a very highly leveraged play for a district that at some point is likely to be acquired by a mid-tier or subject to finding enough copper, a large-cap mining company,’ McNeilly told us.

    Author: Daniel Flynn

    The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    The Author has not been paid to produce this piece by the company or companies mentioned above.

    Catalyst Information Systems Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.

    MiningMaven.com and Catalyst Information Systems Ltd are not responsible for its content or accuracy and do not share the views of the author.  News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

  • Shares in Metal Tiger (LSE:MTR) were up 1.5% today after the company announced drilling results from its Joint Venture project (JV) with MOD Resources Limited. The project in the Kalahari Copper Belt in Botswana is 30% owned by Metal Tiger. The company reported that six widely spaced diamond drill holes has been completed in the first phase programme at the A1 Dome, approximately 22km from the T3 Copper Project. Assay results confirm wide disseminated copper intersections in two drill holes.

  • Metal Tiger (LSE:MTR) advanced 3.5pc to 1.5p on Tuesday morning after summarising its progress in Botswana towards the end of 2018 and laying down its exploration plans for the next 12 months.

    Over the whole of 2018, Metal Tiger’s 30pm-owned joint ventures with MOD Resources (LSE:MOD) drilled a total of 148 holes in the country’s prospective Kalahari Copper Belt. Of these, the firms drilled 41 in the final quarter of the year.

    In Tuesday’s update, Metal Tiger said nine holes drilled at its A4 done over the period intersected copper-containing Ngwako Pan Formation contacts and/or vein hosted copper. The A4 Dome is located 8km away from the MOD’s T3 project and is the first of several buried domes to be drilled as part of the T3 expansion project.

    The expansion project forms part of a strategy to explore for additional resources within the transport distance of the planned T3 copper project process plant. The plan is for this to add significant value to the project for MOD and, in turn, Metal Tiger as MOD’s largest shareholder.

    The second buried dome is called A1 and is located around 22km northeast of T3. In today’s update, Metal Tiger said one hole at the site has intersected a wide zone of disseminated copper.

    Meanwhile, the firm said three holes drilled at its T23 dome intersected visible copper. A further hole is yet to complete. The T23 dome is part of the T20 exploration project, which lies 120km west of the T3 expansion project. It also contains the extensive T20 soil anomaly and T4 prospect and is interpreted to occur within the same structural corridor that hosts T3.

    Finally, Metal Tiger laid out 2019 plans for its JV with MOD resources, which is called Tshukudu Exploration. The JV was established last year after Metal Tiger sold its 30pc share in T3 to MOD for MOD shares and options. As a result, Metal Tiger now holds around a 12.5pc position in MOD, giving it continuing exposure to T3, where a feasibility study is ongoing is due to complete by the end of the current quarter.

    Through their new exploration JV, Metal Tiger and MOD plan to conduct follow-up drilling of ‘very encouraging’ shallow mineralisation along the T4-T23 dome area in Q1 2019. They also plan to undertake initial testing of extensive copper and zinc soil anomalies within the adjacent T20 exploration project over the period. In the second half of the year, the JV plans to conduct follow-up drilling on the A4 dome.

    Michael McNeilly, chief executive officer of Metal Tiger, said: ‘The period saw significant advancements the exploration work, undertaken by both MOD and the JV, continuing to deliver encouraging drilling results that demonstrate the potential of area. At the corporate level, Metal Tiger completed an important and value adding transaction resulting in Metal Tiger becoming MOD’s largest shareholder whilst positioning the Company to continue to benefit from, not only T3’s development, but the underexplored, district scale potential of the Kalahari Copper Belt through the JV.

    ‘The tireless work by our JV partners and our on the ground team has continued to add value to the JV. 2019 will no doubt prove to be an exciting year with T3 moving towards a decision to mine and the extensive JV land holdings continuing to indicate new copper discoveries. We look forward to providing further updates to shareholders in due course.’

    Metal Tiger received a 27pc boost earlier this month following the news that MOD had received an unsolicited takeover bid from ASX-listed Sandfire Resources. Sandfire offered to acquire 100pc of MOD’s shares at $0.38 each, valuing the firm at $113m. However, MOD said it believed the indicative proposal undervalued its assets. Despite this, it said it would be ‘willing to engage’ with Sandfire if it presents a more compelling price.

    Author: Daniel Flynn

    The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.
    The Author has not been paid to produce this piece by the company or companies mentioned above.
    Catalyst Information Systems Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.
    MiningMaven.com and Catalyst Information Systems Ltd are not responsible for its content or accuracy and do not share the views of the author.  News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

  • Metal Tiger (LSE:MTR) finished up 3.5pc to 1.3p on Monday after announcing that major institutional backer Sprott Capital Partners will support it in a £3m fundraise.

    The Botswana-focused mining investment business has signed a non-binding term sheet that will see Sprott act as finders on its behalf for a non-brokered private placement. Based in Toronto, Sprott is one of the world’s largest dedicated natural resources investors. Its affiliate company Exploration Capital Partners is Metal Tiger’s biggest shareholder, with a 10.2pc stake (as at October 2018).

    As part of the placing, nearly 207m Metal Tiger shares will be placed at 1.45p each, an 11.5pc premium to their middle market closing price on Friday last week. Alongside this, subject to Sprott raising the required funds, up to 103.5m warrants will be issued with an exercise price of 2p each and a term date of two years. The Sprott offering will only be available to certain accredited investors and is expected to close on or before 8 March 2019.

    Speaking to MiningMaven, Metal Tiger chief executive Michael McNeilly called the continuing endorsement of Sprott a ‘fantastic sign’ for the company.

    ‘We are delighted to have entered into the Sprott Term Sheet to raise up to an additional c.£3.0 million. Such additional funding will provide yet further support to our strategy, and we look forward to updating shareholders in this regard,’ he said.

    ‘It not only emphasises Sprott’s interest in getting more exposure to the Kalahari Copper Belt (KCB), a highly sought-after copper opportunity, but also in Metal Tiger’s wider portfolio and management. We look forward to working closely with them as we continue to realise the potential of our Botswana projects well as the rest of our high-impact portfolio.’

    Separately to the Sprott raise, Monday also saw Metal Tiger launch a further £1m placing to new and existing investors. This is also taking place at 1.45p a share with 2p warrants attached for every two placing shares purchased.

    A number of the company’s director will take part in this raise, including McNeilly and non-executive chairman Charles Hall, who will invest £14,500 and £58,000 respectively. Furthermore, Dianne Grammer, the wife of non-executive director Terry Grammer, will purchase £137,500 worth of shares.

    Metal Tiger said the proceeds would be used alongside existing cash resources to support its projects in the KCB. This includes the firm’s joint ventures with MOD Resources and Kalahari Metals (KMI). Metal Tiger has the right to acquire up to 50pc of KMI under an investment agreement established last June.

    On Monday, McNeilly added: ‘We are very pleased with the level of support we have received in respect of the Placing from new and existing investors. The Placing will enable Metal Tiger to, among other things, enter into constructive negotiations with Kalahari Metals, regarding the Company potentially providing further financing for proposed exploration drilling at the Okavango and Ngami projects. It will also allow us to continue to take advantage of opportunities that are identified by the Company.

    Last week, KMI revealed a series of drill-ready targets from the second phase of its airborne geophysics survey over two areas in the KCB called the Ngami copper project (NCP) and the Okavango copper project (OCP). The firm also doubled its exploration landholding in the KCB last November through an earn-in agreement with Resource Exploration and Development. This saw it acquire an interest in five recently granted exploration licences with a total area of 4,661km2. It now holds interests in 12 exploration licences covering 8,724km2 in the structure.

    Speaking to Mining Maven in December, McNeilly said the acquisition makes Metal Tiger the company with the biggest landholdings in the KCB globally. Alongside its indirect stake in KML, it is part of an exploration joint venture with MOD Resources that owns permits covering 8,000km2 in the area. It is also MOD’s largest shareholder, giving it significant exposure to the upside on offer at T3 without the burden of cash calls as the project develops.

    ‘We are a very highly leveraged play for a district that at some point is likely to be acquired by a mid-tier or subject to finding enough copper, a large-cap mining company,’ McNeilly told us.

    Author: Daniel Flynn

    The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    The Author has not been paid to produce this piece by the company or companies mentioned above.

    Catalyst Information Systems Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.

    MiningMaven.com and Catalyst Information Systems Ltd are not responsible for its content or accuracy and do not share the views of the author.  News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

     

  • Like many of its peers, Metal Tiger (LSE:MTR) has suffered at the hands of a weak commodity market in recent months, with its shares falling from a high of 3.4p to their current 1.4p. However, far from concerning itself with this downturn, Metal Tiger has taken the opportunity to expand its copper acreage in Botswana’s Kalahari Copper Belt (KCB). Indeed, this expansion has been so vast that the company says it now holds more direct and indirect land in the highly-prospective, undeveloped region than any other business in the world. Fresh from setting-up a new exploration joint venture following a beneficial deal with long-term partner MOD Resources, Metal Tiger’s CEO Michael McNeilly tells us where he plans to take operations next.

    Maintaining exposure

    July saw Metal Tiger take the major step of selling off its 30pc stake in the T3 project, located in the KCB. The news came just months after a pre-feasibility study on the project gave it a base case NPV of $281m and only weeks after a resource upgrade gave it a total mineral resource estimate of 590Kt copper and 27Moz silver.

    Metal Tiger sold its stake to its 70pc joint venture (JV) partner on the project, MOD Resources, in exchange for 17.1m MOD shares and 40.7m unquoted options with a nil exercise price and three-year lifespan. It is worth noting that any remaining options will automatically convert to shares if MOD receives a takeover offer.

    When combined, the shares and options - worth A$27.7m at the time of the deal - take Metal Tiger’s position in MOD to 25pc, making it the company’s largest shareholder. Alongside the shares and options, Metal Tiger will retain a 2pc net smelter royalty for T3, capped at $2m, and received the right to appoint McNeilly to MOD’s board, allowing some continued oversight of the project.

    With the deal taking MOD’s position in T3 to 100pc, both firms argued that one party’s full ownership would make the project more attractive to development financiers. Meanwhile, Metal Tiger said its increased position in MOD would provide considerable ongoing exposure to the project while removing the financial burden of having to contribute to ongoing mine construction costs. 

    This ongoing exposure could prove particularly useful next March when MOD is expected to deliver a completed definitive feasibility study for T3. Provided it has been granted an environmental impact licence by this point, MOD intends to apply for a mining licence in H1 2019 with the aim of launching T3 into the next stage of its development.

    Given that both Metal Tiger and MOD are junior miners, McNeilly says he believes the terms of the deal represent the best outcome for shareholders:

    ‘This project developed from strength-to-strength very quickly. When work on the DFS began, Metal Tiger and MOD were left in a position where it would be very difficult to attract project financing for T3 because banks are more hesitant to engage with two companies with relatively small balance sheets than they are a mid-sized business or a major. We would have struggled to fund our 30pc stake, so removing our funding requirements and increasing our indirect exposure to the project by exchanging our stake for MOD shares and options was definitely the right thing to do for shareholders. We still have a board seat, so we will be very involved in helping and guiding MOD to protect the investment for our shareholders.’

    Exploration focus

    Aside from allowing Metal Tiger to relinquish its direct position in T3, July’s deal also saw the two firms transfer the 18 exploration licences held in the original JV into a new JV named Tshukudu Exploration. With the permits covering c.8,000km2 in the KCB - or 1,000 times the area covered by T3 - the new JV grants both sides the chance to focus specifically on their considerable exploration potential in the belt.

    Like its older iteration, the new JV will be 30pc owned by Metal Tiger and 70pc held by MOD. However, after factoring in Metal Tiger’s assumed 25pc equity position in MOD, the former’s stake in the JV increases to 47pc. The new JV also grants MOD the right to acquire a 100pc interest in any exploration asset on which the two firms decide to complete a scoping study.

    McNeilly tells us this increased exposure and ability to sell-off assets before they hit the development stage allows to better focus on exploration, which he calls the company’s ‘modus operandi’:

    ‘This deal maintains non-contributing exposure to T3’s development while leveraging us further towards exploration. Moving forward, it also gives MOD the ability to pay cash or shares for scoping study assets that it wants to develop. This gets us to where we really want to be - capturing value in the exploration/development chain. We think it is likely that MOD will buy scoping study assets off of us because it removes the need for them to continue paying a 2% net smelter royalty should production begin, in the event that they exercise their option to roll up the entire JV in 3 years from completion.’

    A great deal of work had already begun on these licences before establishing the new JV, and progress has only continued since. For example, drilling at the A1 and A4 domes, part of the T3 Dome complex (seen on the map below) has repeatedly found copper mineralisation.

    Meanwhile, in September, Metal Tiger announced that the JV had received approval to drill at its T20 exploration project, 100km west of T3. It will target the T4 dome and T4 prospect, where previous RC drilling identified copper. However, its first target has been the T23 dome, where Metal Tiger announced that it had intersected shallow copper mineralisation last month. Additional drilling rigs are now being mobilised to extend drilling in the area and re-start work at T4, 

    Beyond this immediate workflow, McNeilly remains excited by the sizeable unexplored potential on offer across the JV’s considerable acreage in the belt

    ‘There is just a huge amount of area that we haven’t even covered yet, and so many different target deposits where we are looking for T3-type deposits where the mineralisation has ideally been thrust up, concentrated and folded over into a nice slab mineralisation near surface. There are also many prospective Ngwako Pan Formation contacts that host other substantial copper deposits at depth. With this much going on, the right thing to do at this time is demonstrate the area’s potential for development. This is why we are going off and drilling other targets and not just spending our money on one area.’

    Land-grab 

    In June, Metal Tiger increased its exposure to the KCB even further by signing a binding agreement to buy up to 50pc of private, Botswanan-focused explorer Kalahari Metals (KML). KML holds interests in seven exploration licences covering 4,063km2 in the Belt, consisting of two 100pc owned licences and five subjected to a earn-in agreement with a business called Triprop Holdings.

    Since Metal Tiger announced the agreement, KML has completed a phase one exploration programme on its portfolio, carrying out airborne EM studies on copper projects called Ngami (NCP) and Okavango (OCP). The work generated numerous dome-style exploration targets analogous to the T3 Deposit while modelling has identified over 340km of potentially mineralised geological contact.  

    KML has prioritised these areas for follow-up work before drill testing once it has acquired the necessary permits. Drilling will proceed at NCP under an environmental management plan agreed with Botswana’s government. OCP, meanwhile, will require a more detailed environmental impact assessment to complete before drilling. Regardless, Metal Tiger believes KML should be in a position to start to test drill new copper targets by the end of Q1 2019.

    What’s more, KML extended its stake in the KCB further last month by entering into an earn-in agreement with Resource Exploration and Development to acquire an additional five licences covering 4,661km2 of ground.

    Metal Tiger has so far committed to two of the three stages that comprise the deal, giving it a 34pc position in the business. If it decides to commit to the final stage and take its stake to 50pc, then McNeilly believes Metal Tiger will hold an unparalleled land position in the prospective region:

    ‘I think the market has also missed the fact that Kalahari has acquired another bulk of land in the belt, taking its total exploration interests to more than 8,700km2. This would take its direct and indirect land interest to around 8,600km2. When we combine that with the 8000km2 or so held by our JV with MOD, Metal Tiger has become the company with the biggest landholdings in the Kalahari Copper Belt. We are a very highly leveraged play for a district that at some point is likely to be acquired by a mid-tier or subject to finding enough copper, a large-cap mining company.’

    Copper downturn

    Metal Tiger is building up its exposure to copper assets at a time when prices of the metal sit at a depressed level. After diving to lows of c.$5,800/lb in the third quarter, prices have bounced back slightly since September to lie flat at around $6,169/t. However, they remain well below 2018 highs of c.$7,300/t hit at the end of the second quarter.

    The factors driving this downturn vary, but it can at least be pinned partly on lingering concerns over an escalating trade war between the US and China, who have been trading sanctions and threats for the better part of the year. With China representing half of the world’s copper consumption, bears in the market have expressed concern around a slowing of global growth and, in turn, weaker demand for industrial material.

    McNeilly disagrees with this negative view, arguing that the supply and demand metrics remain ‘fine’. Indeed, he believes that the copper’s current weakness presents an opportunity to bolster Metal Tiger’s asset base at minimal cost ahead of an inevitable market rebound:

    ‘At some point, the mid-tier and major miners will have to start investing in exploration again and really start driving M&A again- we have already seen some very encouraging deals. What’s more, we are seeing state-owned companies in China being to pick up assets. This almost opportunistic buying can only mean that, at some point, prices will begin to seriously recover, especially if supply and demand forecasts hold true."

    One investor that seems to share McNeilly’s outlook is long-term shareholder and global asset manager Sprott, which has been increasing its position in Metal Tiger steadily over recent months to 15.4pc at last count. Notably, Sprott and its affiliates injected £2.6m into the business over the Summer when it raised £6.2m at 2.8p a share to support the financial commitments related to its MOD JV, its Kalahari tie-up, and working capital. McNeilly believes that the fact Sprott's input represents more than double its minimum commitment to the placing, sums up its enthusiasm for using the KCB as a way of playing any potential copper rebound:

     ‘Sprott is very committed to the potential of the district, and it's clear to see why - prospective ground packages of this scale are simply very difficult to find. Indeed, within the KCB you have one of the ten largest non-producing, undeveloped resources in the world.’ 

    Unfortunately, Sprott’s optimism around Metal Tiger has not been matched by that of the market. Like many of its peers in the junior resources space, it has been hit by the commodity market slump in recent months with shares falling from highs of 3.35p in August to their current 1.5p. This gives the firm a market cap of c.£21.3m. McNeilly says the complexity of its T3 deal has probably done little to mitigate the negative sentiment triggered by a weak copper market. Accordingly, he feels Metal Tiger is trading at a ‘massive discount to the sum of its parts’:

     ‘Our deal was complicated, and I think that some areas of the retail market have missed the considerable option value, huge amount of exposure to MOD, and liquidity it grants us. However, I would argue that we should not be trading at a discount as we have direct project interests and are contributing and we have a track record of being able to generate returns at minimised dilution. If anything, we should be trading close to or even at a premium because we can generate returns that a lot of these mining juniors simply cannot offer. The truth is that the market is tough this year. Many miners are struggling, and we are all down about the same amount. This will change, and Metal Tiger is well placed to capitalise when it does.’

    Shrewd operator

    While complex, Metal Tiger’s deal with MOD looks smart. Not only has the firm maintained exposure to the T3 Project while cutting its funding commitments, but it has also increased its effective exposure to the pair’s exploration assets in the prospective Kalahari Copper Belt. MOD’s London listing last month will only help UK investors in better understanding the real significance of these terms as T3 continues to move forward.

    Compounding this, Metal Tiger’s decision to buy a large stake in Kalahari Metals gives it yet more exposure to copper assets at a time when the market looks to have bottomed. Should McNeilly be correct in his belief that the copper market is due to turn around, then Metal Tiger’s huge asset base in a relatively under-developed region could provide investors with a great way to ride the wave.

    Author: Daniel Flynn

    The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.
    The Author has not been paid to produce this piece by the company or companies mentioned above.
    Catalyst Information Systems Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.
    MiningMaven.com and Catalyst Information Systems Ltd are not responsible for its content or accuracy and do not share the views of the author.  News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

     

     

     

  • This morning, MOD Resources: (LSE:MOD) and Metal Tiger (LSE:MTR) released an update on drilling at A4 Dome in the central Kalahari Copper Belt in Botswana. The A4 Dome forms part of the T3 Expansion Project in which MOD holds a 70% working interest alongside joint venture partner, Metal Tiger.

    MOD stated the initial phase of drilling is supportive of the company’s strategy to define additional sources of ore within the T3 Expansion Project which could result in increased production through the planned T3 processing plant.

    To date only one-third of the approximately 5km long prospective area has been tested which lies only 8km from MOD’s 60Mt T3 Copper Project. Drill hole intersections included significant widths and grades of both vein and Ngwako Pan Formation (NPF) contact type mineralization.

    Independent underground mining consultants, Entech Pty Ltd, have undertaken a preliminary, conceptual underground mining study of the A4 Dome using inputs from one of Australia’s leading underground mining service providers, Barminco, a subsidiary of AusDrill. The study gives positive outcomes for a combination of room-and-pillar ore extraction of higher-grade contact mineralisation and long hole open stoping mining of the NPF contact related mineralization via a decline from surface. 

    The NPF contact is an important regional target in the Kalahari Copper Belt as it hosts substantial deposits including the 100Mt @ 2% Cu 'Zone 5' resources held by Cupric Canyon Capital, around 125km east of A4 Dome.

    MOD's Managing Director, Julian Hanna, said: "Recent drilling results from the A4 Dome, combined with the preliminary conceptual underground mining study, provide strong support to expand drilling along the dome and start developing it into a resource. If results continue to be positive, the A4 Dome has potential to provide substantial additional ore sources, which may lead to an increase in production levels through the proposed T3 process plant, only 8km from the A4 Dome."

    "While the feasibility study for the T3 Copper Project is nearing completion, and represents a robust, long-life, stand-alone mining opportunity for the Company, the nearby A4 Dome keeps delivering good results. The large scale of the A4 Dome, and the potential to utilise capital and infrastructure planned at T3, has allowed us to consider modern, highly efficient underground mining techniques as a realistic option for A4 Dome."

    A decision to progress the A4 Dome programme towards a potential mineral resource estimate is expected to be made early 2019.

    Author: Stuart Langelaan

    The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.
    The Author has not been paid to produce this piece by the company or companies mentioned above.
    Catalyst Information Systems Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.
    MiningMaven.com and Catalyst Information Systems Ltd are not responsible for its content or accuracy and do not share the views of the author.  News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

     

     

     

  • MOD Resources (LSE:MOD) soared 57.3pc to 22.5p yesterday after revealing an unsolicited takeover bid from a major copper miner. The ASX-listed resources firm, which dual listed in London last November, received the proposal from fellow Australian business Sandfire Resources. MOD’s largest shareholder Metal Tiger (LSE:MTR) also rose 27pc to 1.6p on the news.

    Sandfire offered to acquire 100pc of MOD’s shares at $0.38 each, valuing the firm at $113m. However, MOD said it believed the indicative proposal undervalued its assets. Despite this, it said it would be ‘willing to engage’ with Sandfire if it presents a more compelling price.

    MOD is the owner of the 60Mt T3 copper project in the centre of Botswana’s highly prospective Kalahari Copper Belt (KCB). The company is progressing a feasibility study for the project, which it expects to release by the end of Q1 2019. This is expected to help it reach a decision to mine within the first half of the year.

    The firm believes that its flagship asset presents the potential for a long-life, high-margin, open-pit copper mine with significant exploration upside. Indeed, based on its pre-feasibility study, the asset has an NPV (pre-tax) of $370m under the base case and $529m under the expansion case.

    In yesterday’s update, MOD gave many reasons for considering Sandfire’s initial offer insufficient.

    First-of-all, the company highlighted its dominant position in the KCB, which comes in at around 11,700km2 in granted licences. It called the area ‘one of the last under-explored sediment-hosted copper belts’, adding that exploration results have already indicated the potential for additional copper mineralisation.

    Elsewhere, the business pointed to T3’s prospectivity. It said it expects the project to produce a high-grade, high-quality concentrate that will attract keen interest from metal traders and smelter. It also claimed to have confidence in a range of alternative funding options for progressing T3 to production following third-party discussions.

    Finally, MOD pointed to the fact that its share price and the MOD/SFR exchange ratio are at a 2.5-year low. Extending this point, it highlighted its most recent $0.47 per share placing price.

    Managing director Julian Hanna said the proposal confirms the potential of the T3 Copper Project. However, he said ‘significantly undervalues’ the company’s assets.

    Elsewhere in Monday’s update, MOD announced that it had carried out a $10m placement with institutional and sophisticated issued. It issued the shares at $0.30 each, a 36pc premium to its last closing share price on ASX. It will now follow the placing with a rights issue to raise c.$5m from eligible shareholders. This will be priced at $0.24 per share.

    MOD said the funds would be used to complete a 2019 capital works programme. This will see it progress T3, purchase a farm on which the T3 open pit is based, complete underground mining studies, and carry out follow-up exploration work. It will also fund infill drilling to upgrade part of the early stages of T3 mine production to a JORC compliant Measured Resource category. Finally, MOD said the money would enable it to progress negotiations with numerous parties around funding T3’s future development.

    Hanna added: ‘Funding from this capital raise will enable the Company to progress the T3 Copper Project towards a development decision and conduct further drilling for additional resources. With strong ongoing support of our shareholders through a placement and a fully underwritten rights issue, we believe that the Company will have sufficient working capital to achieve our objectives.’

    Author: Daniel Flynn

    The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.
    The Author has not been paid to produce this piece by the company or companies mentioned above.
    Catalyst Information Systems Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.
    MiningMaven.com and Catalyst Information Systems Ltd are not responsible for its content or accuracy and do not share the views of the author.  News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance