Metal Tiger PLC (LON:MTR) Chief Executive Officer Michael McNeilly caught up with DirectorsTalk for an exclusive interview to discuss their Botswana copper/silver project, the progress of the T3 open-pit project, postponing the IPO of the Thai joint venture KEMCO & this being a strong year for the company
Q1: The T3 copper/silver deposit in Botswana seems to have gone from strength to strength this year and I note that drilling activities have restarted. Can you provide a bit of an update as to what you’ve found so far?
A1: We really liked the T3 asset and as a sign of how much we like it is obviously we’ve increased our effective state in the project by increasing our ownership and our joint venture partner MOD Resources, which was done a month ago, which we now own over 5% of. That actually equates to a market value of roughly £3.2 million so that gives us a huge amount of upside on some of the other non-T3 assets as well should those come good.
In terms of the deposit itself, you’ll note the recent announcement on 3rd October, this asset continues to surprise Metal Tiger and MOD, we found new zones of visible copper mineralisation, 300 metres west in the north-east of the plan pit and a long strike down-dip as well to the north. So, it’s really churning out more and more copper, of course we need to wait for assays to come back and confirm what the grades will be but it’s very very encouraging. We’re looking at disseminated and vein hosted sulphides so you’re looking at disseminated chalcocite and localised veins with chalcocite and bornite which is all the high-grade stuff. So, it’s very encouraging.
Q2: You’ve also recently updated the market on the PFS for the T3 open-pit project, how is that progressing?
A2: It’s progressing very well and, obviously, another thing to note just briefly is that we also announced on Monday that we had very good metallurgical test work results which is incredibly important for us trying to move this into production and ties in with the work we’re doing on the PFS which is on schedule for December this year. In terms of that, we’ve actually increased the production target on that by 25% to a 2.5 million tonne per annum plant and obviously we’re working off the increased resource which we announced recently as well. So, we’ve got a stronger copper price so hopefully this will result in a very good NPV for the project when it is announced in December.
Q3: Just focussing on the Thai assets, I notice that the company now intends to postpone the IPO of the Thai joint venture, KEMCO. Can you provide some context to this?
A3: We’re still very much behind the spin-off of the KEMCO Thai assets, we see a huge amount of value, the postponement of the IPO was a necessary commercial decision, particularly in light of the implementation of the new Thai Minerals Act which we didn’t know was going to come into effect in February. We knew one was being proposed but we didn’t know when it would be proposed and that got signed off in August and in terms of coming to the market, we need certain things to have completed with the new Minerals Act which we expect we’ll have completed by December of this year so that we can come back and market from a much stronger position.
We’ve had a lot of encouraging feedback from potential investors who have looked at the asset so we’re confident in the quality of the project, we just need to ensure that we’re marketing from a position of strength.
Q4: All in all, then, a strong year for Metal Tiger?
A4: Yes, it’s been a very strong year for Metal Tiger, obviously we raised significant capital from Sprott, with 10% being held by Sprott currently who are our largest single shareholder, and that has given us the financing to really support our 30% contribution to the Botswana joint venture. It has also allowed us, from our other assets within the asset trading division, to take profits to put towards financing both the KEMCO IPO where we also have a pre-IPO investment of about £514,000 which has gone towards covering a lot of the actual IPOI costs, so to speak, in terms of lawyers, accountants, nominated advisers.
You’ll note that our balance sheet, from June, is very strong and we’re in a very good position in terms of capital and liquid assets. We’ve also seen some very encouraging trends in the copper price this year so today, I think the copper price is around $3 a pound and when our scoping study on the T3 asset went out, we were looking at a $2.53 a pound of copper price. We also published an upside model at $3 a pound which showed an NPV of $297 million which obviously we would have 30% attributable to Metal Tiger.
Clearly, if the PFS comes out you’re looking at measured and indicated resources which will go into calculating the resource on which the economics are used so if that maintains a similar NPV from what we had previously, that’s an incredibly good result because there’s a much higher level of confidence with measured and indicated resource than there is in simply indicated and inferred.
On top of that, we have, I think from the beginning of the year, improved significantly the Board, we have a strong management team and we look forward to continuing to deliver value to shareholders.