Metal Tiger plc Investment in Kalahari Metals Limited

Metal Tiger Plc (LON:MTR) has today announced that it has signed a binding Investment Agreement (the “Agreement”) to acquire up to 50% of Botswanan focused explorer Kalahari Metals Limited. KML is a privately owned company and holds interests in seven highly prospective exploration licences covering 4,063km² in the Kalahari Copper Belt, consisting of two 100% owned exploration licences and five exploration licences subject to a binding earn-in agreement with Triprop Holdings (Pty) Limited .

Highlights

• Metal Tiger will have the right to acquire up to 50% of KML for a total consideration of US$1.6 million.
• Metal Tiger has exercised the First Option under the Agreement and is to be issued 18% of the enlarged share capital of KML for a total consideration of US$600,000.
• The 100% KML owned exploration licences are situated northeast along strike of the Cupric Canyon Capital (circa 50 km) and the MOD Resources Limited (MOD)/Metal Tiger JV projects (circa 170km). They cover 1,996 km² and consist of a significant land holding over the prospective copper belt.
• KML have the right to earn-in to up to 80% of Triprop followed by a right to purchase the remaining 20% of Triprop at an independent valuation. Triprop hold 5 granted exploration licences arranged as two separate blocks of ground with a combined total area of 2,067 km².
• Metal Tiger to appoint two non-executive directors to the board of KML.
• Licences cover the prospective D’Kar and Ngwako Pan Formations with favourable structural positions and are associated with major copper deposits in the region.
• Available datasets include high resolution airborne magnetic geophysics survey, soil geochemical sample data and results of 20-hole scout drilling with prospective intersections including 5.1m @ 0.69% Cu and 1.8m @ 1.80% Cu & 8.2g/t Ag.
• The deal gives Metal Tiger exposure to a further 4,063 km² of largely unexplored ground, adjacent to significant recent discoveries in the highly prospective Kalahari Copper Belt.
• For more information on Kalahari Metals Limited please visit their website: www.kalaharimetals.com

Michael McNeilly, Chief Executive Officer of Metal Tiger plc, commented: “The signing of this deal with Kalahari Metals Limited follows 3 months of substantial corporate and technical due diligence and is a further exciting milestone in Metal Tiger’s continuing involvement in a world class copper region in Botswana. Metal Tiger has had a long focus on the exploration of the region and through its close partnership with MOD Resources Limited and its involvement with the seminal T3 deposit discovery, is able to bring exceptional strategic and technical expertise to create an exciting new joint venture with the experienced operational team at KML. We look forward to updating shareholders in the near future with regards to KML’s proposed exploration plan. Based on our initial discussions, key focus will be to conduct geophysics and soil geochemical surveys to identify high priority targets for drilling as well as commence work on the environmental management plans (‘EMPs’) for areas likely to be of interest for drilling in the near term.

The Board of Metal Tiger greatly looks forward to working with its new partners at KML and holds great belief in the potential of the Kalahari Copper Belt to develop into a world class economic copper district”.

Agreement Structure and Commercial Terms

• Under the terms of the Agreement, Metal Tiger will have the right to acquire up to 50% for a total consideration of US$1.6 million, via the following option structure:
  • First Option: Metal Tiger to be issued new KML shares representing 18% of KML’s enlarged share capital in consideration for US$600,000 cash less £30,000 in new shares in Metal Tiger to be issued to the shareholders of Triprop. This will result in the issue of 1,188,118 new shares in the Company which are expected to be admitted to trading to AIM on or around 12 June 2018.
  • Second Option: Metal Tiger to be issued new shares in KML to increase total holding to 34% of KML’s enlarged share capital in consideration for US$500,000 cash within 6 months from the date of the exercise of the First Option.
  • Third Option: Metal Tiger to be issued new shares in KML to increase total holding to 50% of KML’s enlarged share capital in consideration for US$500,000 cash within 6 months of the exercise of the Second Option.

• Metal Tiger has no obligation to continue with any subsequent payments following the First Option payment.
• Metal Tiger to appoint two non-executive directors to the board of KML.

Terms of KML’s earn-in with TripropKML have signed a binding earn-in agreement with Triprop (the “Earn-in”) under the following key terms:

• Stage 1 Earn-in:
  • KML to incur US$600,000 in respect of agreed work programmes and budgets within 1 year of the start date to be agreed by KML and Triprop, on completion of which, Triprop to issue new ordinary shares totalling 51% of its enlarged share capital;
  • Metal Tiger to issue 1,188,118 new shares to the shareholders of Triprop. For the avoidance of doubt, these shares are the Triprop Shares to be issued as a condition of the signing of the Agreement and the exercise of the First Option to own 18% of the enlarged share capital of KML.
• Stage 2 Earn-in:
  • KML to incur US$1,200,000 in respect of agreed work programmes and budgets within 1 year of the exercise of the second option by KML and Triprop, on completion of which, Triprop to issue new ordinary shares to bring KML’s total holding to 80% of the then enlarged share capital of Triprop.
  • Triprop shareholders to receive either:
    • New shares in Metal Tiger to the value of £60,000, valued at the mid-market closing price on the date prior to the announcement of the issue; or
    • If KML is listed on a recognised investment exchange (including the AIM market of the London Stock Exchange, ASX or TSX), new shares in KML to the value of £50,000, valued at the mid-market closing price on the date prior to the announcement of the issue.
• Following completion of the Stage 2 Earn-in, Triprop shareholders will grant KML the option to acquire their outstanding shares based on independent valuation, to be satisfied in consideration for:
  • New shares in Metal Tiger; or
  • If KML is listed on a recognised investment exchange (including the AIM market of the London Stock Exchange, ASX or TSX), new shares in KML.
• KML to be appointed as operator of the Triprop licences.
• Upon completion of the Stage 1 Earn-in, KML and Triprop to enter into a joint venture agreement granting KML the right to appoint 2 of 4 directors to the Triprop Board, one of whom will be the chairman.

Summary of the Assets

Details of the seven exploration licences which are the focus of the KML joint venture are set out in Table 1 below. The concessions form two separate contiguous blocks of ground. Both licence blocks are at the early exploration stage, however they represent a significant land holding along strike of advanced and exploration-stage copper projects, including the JORC compliant Metal Tiger/MOD owned T3 Deposit (36.0Mt @ 1.14% Cu & 12.8g/t Ag) and the privately held Cupric Canyon Capital (“Cupric”) Boseto Project (177 Mt at 1.3% Cu), Zone 5 Deposit (100Mt @ 1.95% Cu & 20g/t Ag) and Banana Zone (191Mt @ 0.6% Cu) deposits.

Eastern Block (the Okavango Copper Project):

• Licences: KML held PL148/2017 and PL149/2017 adjacent to Triprop held PL043/2012, PL042/2012 & PL041/2012.
• Location: Concessions are adjacent to those currently held by Cupric, 50km NE of Cupric Zone 5 Deposit (100.3Mt @ 1.95g/t Cu & 20g/t Ag); 170km NE of Metal Tiger/MOD T3 Deposit (36Mt @ 1.14% Cu & 12.8g/t Ag).
• Geology: covers the north-eastern continuation of the Kalahari Copper Belt (“KCB”) along the strike of the Ghanzi Ridge which consists the Neoproterozoic Ghanzi Group sediments which hosts the main known copper deposits in the Botswanan belt.
• Work completed:
  • Orientation soil geochemical sampling.
  • Scout drilling.
• Prospectivity: Magnetic geophysics data indicates that the target contact zone between the D’Kar and Ngwako Pan Formations extends into the block under cover and that favourable domal structural positions are present. In particular, the southern part of Licences PL148/2017 and PL149/2017 are located within the Central Structural Corridor (“CSC”) which extends SW through Metal Tiger/MOD JV Licences toward Namibia. The presence of later stage major dyke swarms trending NW-SE cross-cutting perpendicular to the CSC, introduces additional secondary structures and potential heat sources into the copper bearing formations.

Western Block (the Ngami Copper Project):

• Licences: Triprop held PL035/2012 & PL036/2012.
• Location: covers the prospective ground along the northern edge of the KCB and abuts the MOD and Metal Tiger/MOD JV concessions. Circa 50km NW of T3 Deposit, 100 km SW of Boseto (177 Mt at 1.3% Cu) and 70 km west of Cupric’s Banana zone (191Mt @ 0.6% Cu).
• Geology: Inferred basement geology consists of D’Kar and Ngwako Formations and their contacts.
• Work Completed:
  • High resolution airborne magnetics geophysics survey (11,693 line-km at 75m spacing) & interpretation.
  • Orientation soil geochemical sampling (10,486 samples collected along profiles perpendicular to the D’Kar contact).
  • Scout drilling (20 holes, 2,047m drilled).
• Prospectivity: Scout drilling confirmed the presence of the D’Kar and Ngwako Pan Formation contact zone and three holes intersected significant copper mineralisation above 0.5% Cu including 5.1m @ 0.69% Cu in hole TRDH14-11 and 1.8m @ 1.80% Cu & 8.2g/t Ag in hole TRDH14-16A (apparent thicknesses), see also Table 2 below. The stratigraphy, lithologies and mineralisation described in the drill hole logs are similar to those found in Metal Tiger/MOD neighbouring JV Licences.

Table 1: Details of Exploration Licences in the KML Joint Venture

Table 2: Key drilling intersections from Triprop 2014 scout drilling programme (Western Block) (Source: Remote Drilling Services database 2015)

Competent Person’s Statement

The technical information contained in this disclosure has been read and approved by Mr Nick O’Reilly (MSc, DIC, MAusIMM, FGS), who is a qualified geologist who acts as the Competent Person under the AIM Rules – Note for Mining and Oil & Gas Companies. Mr O’Reilly is a Principal consultant working for Mining Analyst Consulting Ltd which has been retained by Metal Tiger PLC to provide technical support.Following the issue of the 1,188,118 Triprop Shares, Metal Tiger has 1,110,431,438 issued shares.