10th Feb 2020 11:50
(Alliance News) - Metal Tiger PLC is to invest GBP1.7 million into South Korea-focused Australian gold miner Southern Gold Ltd, it said on Monday.
Resources investor Metal Tiger has signed a binding subscription agreement to invest at AUD0.14 per share as part of a AUD10 million, around GBP5.2 million, fundraise by the Sydney-listed firm. This would give Metal Tiger a 15% stake.
Metal Tiger has nominated Non-Executive Director Terry Grammer to join Southern Gold's board following the subscription, and also wants geologist Douglas Kirwin to join.
Southern Gold has a number of gold projects in South Korea, including a joint venture with London-listed Bluebird Merchant Ventures Ltd at the Gubong and Kochang mines.
"Southern Gold was first identified as a possible investment opportunity for Metal Tiger in July 2019 through an encounter with Douglas Kirwin. Recognising Doug's technical talent, experience and success, we immediately started to undertake a significant amount of corporate and technical due diligence on Southern Gold," said Metal Tiger Chief Executive Michael McNeilly.
"Following a site visit by Terry Grammer and I in November 2019, the true scale of the exploration opportunity presented itself. The realisation the company had successfully built a team that could operate in-country gave us the comfort to put a deal to the board of Southern Gold. In this deal we have obtained commitments that Southern Gold would run a strategic review process to focus on areas where we believed there could be room for improvement."
"The existing investor support in the placement gives us added comfort. We believe Southern Gold represents a unique area/country exploration play with significant exploration upside potential," McNeilly continued.
Elsewhere, Metal Tiger has decided to write off its Spanish asset, the Logrosan joint venture, following a review, it said.
Metal Tiger shares were 9.7% higher on Monday in London at a price of 1.70 pence each.
By George Collard; [email protected]
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