Metal Tiger plc (LON:MTR), the London Stock Exchange AIM listed investor in natural resource opportunities, has this morning provided an update in relation to its investment in Cobre Limited (ASX:CBE).
Cobre has today announced that it has entered into a legally binding Letter of Intent with the two minority shareholders of Cobre’s 80% owned subsidiary, Toucan Gold Pty Ltd, to acquire the remaining 20% of shares in Toucan that Cobre does not already own.
Metal Tiger has also conditionally agreed to invest an additional A$310,000 into Cobre (the “MTR Investment”), by way of a subscription for new ordinary shares in Cobre, subject to certain conditions being met, to maintain its pro-rata shareholding in Cobre.
Highlights and Key Transaction Terms:
- Following completion of the Transaction, Cobre will hold 100% of the shares in Toucan;
- Toucan is the 100% owner of the nine tenements comprising Cobre’s flagship Perrinvale project in Western Australia (“Perrinvale”);
- Consideration for the remaining Toucan shares will be satisfied by way of a cash payment of A$527,900 and 6,160,000 new Cobre Shares at a deemed consideration price of A$0.20 per share; and
- 100% ownership of Toucan provides Cobre with complete control over Perrinvale and the ability to make key strategic decisions independently.
Conditions Precedent:
The Transaction is subject to a number of Conditions Precedent (“CPs”) including:
- Cobre and the Vendors (together, the “Parties”) negotiating and executing a share purchase agreement to more fully record the terms of the Transaction;
- Any other conditions that Cobre or ASX deems necessary being satisfied in order to ensure compliance with ASX listing rules or the Corporations Act 2001 (Cth);
- The Parties agreeing to work in good faith and use their best endeavours to satisfy the CPs as soon as possible but by no later than 30 June 2020; and
- If any CP has not been satisfied by 30 June 2020, Cobre may elect to terminate the agreement and not proceed with the Transaction.
The MTR Investment
Metal Tiger has conditionally agreed to invest a further A$310,000, at Cobre’s IPO price of A$0.20 per share, resulting in the issue of 1,550,000 new Cobre Shares. The MTR Investment is conditional on completion of the Transaction and, as Metal Tiger is a substantial shareholder and has Board representation, also requires the approval of Cobre shareholders, with such approval to be sought at the Company’s Annual General Meeting to be held later this year. Assuming completion of the Transaction and shareholder approval of the MTR Investment, Metal Tiger will be interested in 20,900,000 Cobre Shares, which, assuming no further shares are issued by Cobre, would result in Metal Tiger maintaining its 19.99% interest in the company.
Further details of the Transaction can be found in Cobre’s release at the following link:
https://www.asx.com.au/asxpdf/20200428/pdf/44h9mr26qszlln.pdf
Michael McNeilly, Chief Executive Officer of Metal Tiger plc, commented:
“It is pleasing to see Cobre move to 100% ownership of Perrinvale through this accretive transaction. We believe Perrinvale has the potential to represent a highly strategic asset in the future copper market and, through this deal, we will have an increased effective interest in the project and maintain our significant shareholding in Cobre. We look forward to seeing future developments.”
Background information on Cobre
Cobre, an Australian public company that was incorporated on 18 May 2018, is seeking to create shareholder value through the successful exploration of base metal projects.
Cobre’s subsidiary, Toucan, holds a group of tenements collectively referred to as the Perrinvale Project in central Western Australia. Michael McNeilly, Chief Executive Officer of Metal Tiger, is a Non-Executive Director on the Board of Cobre.
As at 31 December 2019, Cobre reported net assets of A$1.1m. For the period ended 31 December 2019, Cobre reported a loss after tax of A$1.2m.
