5th Feb 2015 11:33
LONDON (Alliance News) - Metal Tiger PLC Thursday said it has agreed to invest up to GBP150,000 in fellow AIM-listing Ariana Resources PLC, and said there is potential for further investment if Ariana becomes a gold producer.
"Metal Tiger is pleased to enter into this strategic investment agreement, which enables the company to invest directly in Ariana Resources at a significant point in their business development pathway," said Cameron Parry, chief executive of Metal Tiger.
Metal Tiger said its GBP150,000 investment in shares with attached warrants will strengthen Ariana's cash position and provide general working capital, which will allow Ariana to focus on delivering its Kiziltepe gold project in Turkey, which is scheduled to be producing in 2016.
"The full amount of the investment, when received, is expected to provide Ariana with sufficient working capital for core company operating costs until the fourth quarter of 2015," said Kerim Sener, managing director of Ariana Resources.
Metal Tiger has initially invested GBP75,000 for 8.3 million shares in Ariana at a price of 0.9 pence per share. Metal Tiger also has been issued with 8.3 million warrants to subscribe for new shares in Ariana within a three-year period at an exercise price of 1.8 pence per share.
"The board believes there is considerable upside for Metal Tiger should Ariana continue to deliver and move the company into gold producer status," said Metal Tiger.
Metal Tiger will invest a further GBP75,000 under the same conditions as the initial investment once Ariana has secured the necessary forestry permits for the Kiziltepe project, which are needed before construction and gold production can begin at the project.
The second instalment may be accelerated and paid earlier at Metal Tiger's option, but Ariana must secure the forestry permits by June 30 to secure the second instalment, said Metal Tiger.
If Ariana sells its interest in the Ardala gold, copper and molybdenum porphyry and the Salinbas gold and silver zone in Turkey for cash or shares that exceeds USD15 million, the price of any un-exercised warrants held by Metal Tiger will increase to 2.7 pence per share.
"Metal Tiger and Ariana have agreed to collaborate to identify and consider new resource investment opportunities in Turkey where both parties may be able participate. Most notably both companies are keen to consider the additional opportunities that may arise in respect of fresh licence auctions due to take place in the next two months in Turkey," said Metal Tiger.
Last Friday, Metal Tiger said it was looking at numerous investment opportunities in companies with "high quality, high value" assets that are undervalued due to weaker investment sentiment in the natural resource sector.
Metal Tiger shares initially rose 15% on the news to 0.774 pence per share but have since reversed to be down 1.1% at 0.668p. Ariana shares are up 19% to 0.985 pence per share.
By Joshua Warner; [email protected]; @JoshAlliance
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