TIDMMTR TIDMKIBO
RNS Number : 4523C
Metal Tiger PLC
19 January 2015
METAL TIGER PLC
19 January 2015
Metal Tiger plc
("Metal Tiger" or the "Company")
Memorandum of Understanding - Gold Project
In line with the Company's investing policy, Metal Tiger Plc
(LON: MTR), is pleased to announce that it has entered into a
Memorandum of Understanding for a 50/50 Joint Venture with Kibo
Mining plc ("Kibo") on its Morogoro South gold-prospective
exploration portfolio in Tanzania ("Morogoro Portfolio"). The
Morogoro Portfolio has a number of exploration rights in central
Tanzania, consisting of 18 licences, offers, applications and
tenders covering a combined surface area of approximately 1,411
square kilometres.
Metal Tiger's CEO, Cameron Parry, commented: "This transaction
builds on Metal Tiger's current joint venture relationship that
encompasses Kibo's uranium portfolio in Tanzania as announced on 14
January 2015. The 50/50 Joint Venture in relation to Kibo's
Morogoro Project is also in line with Metal Tiger's primary
interest in gold opportunities, complementing the existing Thai
interests and various options under consideration in Spain.
Furthermore, upon satisfactory completion of due diligence for this
project, Metal Tiger will benefit from additional warrants in Kibo
Mining, further exposing shareholders to the considerable potential
upside going forward."
Under the MOU Metal Tiger has up to and including 20 February
2015 to complete its due diligence process and within which period
the parties are to complete and sign a binding JV agreement. The
terms of the MOU would see Metal Tiger pay for the ongoing licence
renewal fees and other maintenance costs for a minimum of 12 months
(estimated to be approximately US$100,000 p.a.) and up to a maximum
of 3 years within which timeframe Metal Tiger is to expend a total
of US$800,000 on project costs (including licence renewal fees) and
an agreed exploration work program, to maintain its 50% interest in
the JV. Should Metal Tiger expend less than a total of US$800,000
whilst maintaining the Morogoro Portfolio licences, but not less
than US$300,000 then Metal Tiger's 50% interest in the JV will
revert to a 10% free carry on the Morogoro Portfolio. Should Metal
Tiger expend less than $300,000 in total then Metal Tiger's total
interest in the JV shall revert to Kibo.
As part of the JV, should it proceed, Kibo will issue Metal
Tiger with warrants over 10,000,000 new ordinary shares in Kibo,
exercisable within a three-year term at an exercise price of 9p
each but subject to a mechanism to increase the warrant exercise
price in the event Kibo's share price trades at a significant
premium as follows:
-- In the event that Kibo's listed closing mid-market share
price on the AIM market of the London Stock Exchange ("AIM")
exceeds 18 pence (GBP0.18) per share for a consecutive period of 15
days in which AIM is open, then the exercise price of any
unexercised warrants shall increase from 9 pence (GBP0.09) to 14.5
pence (GBP0.145);
-- In the event that Kibo's listed closing mid-market share
price on AIM exceeds 27 pence (GBP0.27) per share for a consecutive
period of 15 days in which AIM is open, then the exercise price of
any unexercised warrants shall increase to 19 pence (GBP0.19).
Gold Prospective Joint Venture Areas - Morogoro South
A wholly owned subsidiary of Kibo Gold Limited, itself a wholly
owned subsidiary of Kibo Mining Plc (LON: KIBO), owns a portfolio
of gold prospective asset licences for exploration in Tanzania
(collectively the "Morogoro South Portfolio").
The Morogoro South Portfolio of exploration licences is located
in the emerging goldfield of the Morogoro-Dodoma-Handeni region
within a 90 kilometre radius of the city of Morogoro, Tanzania. The
portfolio consists of 18 licences, offers, applications and tenders
with a combined surface area of approximately 1,411 square
kilometres.
Key Terms of the Memorandum of Understanding
Following completion of the due diligence period by/on 29
February 2015 and the parties entering into the JV agreement as
outlined in the MOU, the parties are to operate under a 50/50 Joint
Venture of the gold-prospective properties that form the Morogoro
South Portfolio, as follows:
-- Metal Tiger is to acquire 50% of Kibo Gold Limited ("KB
Gold"), a 100% wholly owned subsidiary of Kibo Mining plc, that
owns the Morogoro South Portfolio for a consideration of GBP1.
-- Metal Tiger is to meet the expenses in relation to the
licence renewal fees and other maintenance costs of the Morogoro
South Portfolio for a minimum of 1 year (estimated to be
approximately $100,000) and up to a maximum of 3 years.
-- Metal Tiger is to expend the first US$800,000 under the JV in
expenses and exploration relating to the Morogoro South Portfolio,
at which point costs moving forward are shared 50/50 between the
parties.
-- Should Metal Tiger elect to not continue with the JV after
the minimum term of one year, or fail to expend US$100,000 by the
first anniversary of the JV, or should Metal Tiger fail to expend
the full expenditure by the third anniversary of the JV then:
o if less than US$300,000 of the agreed expenditure, the 50%
interest in the JV owned by Metal Tiger shall revert back to KB
Gold subject to them exercising a claw-back option;
o if greater than $300,000 of agreed expenditure, Kibo shall
have the right to exercise the claw-back option in respect of Metal
Tiger's interest in KB Gold however Metal Tiger shall retain a 10%
free carry in the Morogoro South Portfolio.
-- At any time following the first anniversary of the JV, on not
less than 90 days notice to Kibo, Metal Tiger may elect to cease
sole funding of the JV expenditure.
The acquisition by Metal Tiger of the interest in KB Gold is
conditional, inter alia, on:
-- by not later than 20 February 2015 Metal Tiger conducting,
and confirming in writing that it is satisfied (at its sole
discretion) with the results of the legal, financial and technical
due diligence investigations to be undertaken by Metal Tiger in
relation to the Morogoro South Properties and KB Gold; and
-- Kibo and KB Gold procuring all necessary consents from the
regulatory authorities in Tanzania.
For further information on the Company, visit:
www.metaltigerplc.com:
Cameron Parry Tel: +44 (0)207 099
(CEO) 0738
Paul Johnson Tel: +44 (0)7766 465
(Non-Executive 617
Director)
Sean Wyndham-Quin Spark Advisory Partners Tel: +44 (0) 2033 683
Neil Baldwin Limited 555
(Nominated Adviser)
Nick Emerson SI Capital Limited Tel: +44 (0) 1483 413
Andy Thacker (Sole Broker) 500
This information is provided by RNS
The company news service from the London Stock Exchange
END
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