11th Apr 2016 09:48
LONDON (Alliance News) - Metal Tiger PLC on Monday said it has signed an agreement with the owners of the Boh Yai and Song To mines in western Thailand to give it time to progress the joint venture opportunity.
Metal Tiger said its 90%-owned subsidiary, Southeast Asia Exploration & Mining Co Ltd, and the owners of the two silver, lead and zinc mines have signed a standstill letter agreement, which provides all the parties with up to three months to undertake due diligence and to formulate a formal joint venture agreement.
The joint venture agreement would allow the parties to work together to secure permits for the mines and to collaborate on the rehabilitation of the mines to bring them back into production. During the three-month period, the owners of the mines have agreed not to sell their interest in the mines to another firm.
"Rehabilitation of the mines will be a tremendously positive step forward for the local community given the many hundreds of jobs that will be created over the life of mine. The high-grade nature of the mineralisation, combined with established mine, infrastructure and processing plant, makes this a unique commercial opportunity for all parties," said Paul Johnson, chief executive of Metal Tiger.
Metal Tiger said it is aiming to formalise a joint venture agreement "at the earliest opportunity" as its plans regarding mine permitting and the rehabilitation process are at a "very advanced stage".
Metal Tiger has paid GBP56,637 in cash to the mine owners to secure the standstill agreement, and also issued 874,025 shares in the company to the mine owners priced at 4.05 pence each, giving them a total value of GBP35,398.
That means Metal Tiger is paying a consideration equal to GBP92,035, and those shares being issued to the mine owners will represent around 0.17% of Metal Tiger's enlarged issued share capital.
Metal Tiger acquired its 90% stake in Southeast Asia Exploration & Mining Co Ltd back in February, paying USD200,000 in cash and paying another USD300,000 through the issue of 23.8 million shares priced at 0.87 pence each. Further payments up to USD160,000 may be due in the future, plus the potential for Metal Tiger to have to issued a further 23.8 million warrants.
Acquiring that stake gave the company eight special prospecting licence applications in western Thailand that surround the historical mining operations at the Boh Yai and Song Toh silver, lead and zinc mines, explaining why Metal Tiger is keen on acquiring those two mines.
An exploration and mining database covering the Boh Yai and Song Toh mines also was part of the deal struck in February, opening the door for Metal Tiger to begin negotiations with the owners.
Metal Tiger acquired two mining lease applications covering the historical Kanchanaburi mining lease applications, one exclusive prospecting licence covering a gold and antimony project in south-east Thailand, a mining lease application in the south-east Thailand, and two further special prospecting licence applications relating to projects in the Nakon Sawan and Lopburi provinces.
Metal Tiger shares were trading down 5.5% to 3.83 pence per share on Monday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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