KEMCO PLC IPO update

Metal Tiger plc

Metal Tiger Plc

18 September 2017

Metal Tiger Plc

("Metal Tiger" or the "Company")

KEMCO PLC IPO update

Metal Tiger Plc (LON:MTR), the London Stock Exchange AIM listed investor in strategic natural resource opportunities, announces that the Board has taken the decision to postpone the IPO of its Thai Joint Venture over the two silver-lead-zinc mines until Q1 2018.

Rationale for postponing IPO:

The Board has decided to delay the Thai IPO for the following commercial reasons:

• Pre-marketing feedback;
• New Thai Minerals Act and National Mineral Management Policy Committee;
• Community vote; and
• Further clarification on the Master Plan will enhance the valuation.

Test-marketing feedback:

The Company has met with several potential investors, including several family offices introduced by Charles Hall (Chairman of Metal Tiger) and received serious interest in the IPO based on the merits of the project. Notably, six family offices have expressed substantial interest in investing in the IPO. The Company has also discussed the project with a large commodities trading firm which has indicated it will send a Letter of Intent for offtake financing and have also expressed an interest in seeing the pathfinder admission document to consider an equity investment. Such interest from sophisticated investors validates the fact that we are in a strong base metals market with zinc being one of the top performers given the prevailing global supply constraints. A number of potential investors have requested a postponement of the IPO to Q1 2018 to seek clarification on certain aspects of the new Thai Minerals Act and the National Minerals Management Policy.

National Minerals Management Policy and new Thai Minerals Act:

On 29 August 2017 the new Thai Minerals act, Minerals Act B.E. 2560 (A.D. 2017) (the “2017 Minerals Act”) came into effect replacing and consolidating the Minerals Act B.E. 2510 (A.D. 1967), last amended in 2002, and the Mineral Royalty Act B.E. 2509 (A.D. 1966), last amended in 1979, into a single statute and made several changes to the 1967 Minerals Act.

The key changes are:

• Adding a new committee, i.e. National Mineral Management Policy Committee;
• Establishing Minerals Management Master Plans;
• Revising the limited areas for mining;
• Revising types of prospecting and mining leases;
• Revising validity periods of the licenses;
• Changing license issuer authority;
• Environmental and social concern; and
• Adding civil liability (punitive compensation).

Under the 2017 Minerals Act, the Ministry of Natural Resources and Environment and the Ministry of Industry (“MOI”) will have responsibility and supervisory power to enforce the 2017 Minerals Act. However, the Department of Primary Industries and Mines (“DPIM”) and MOI are still the government bodies responsible for the supervision of exploration and mining operations and of other mining related activities.

Under the new act, an additional committee is to be established called the National Minerals Management Committee (the “NMC”), which includes amongst others, the Prime Minister (as chairman), Minister of Natural Resources and the Environment, Minister of Industry, Minister of the Interior, and Minister of Agriculture and Cooperative (as vice-chairman), representatives of Local Administrative Organizations and non-governmental Organizations including industry bodies (as qualified committee).

The NMC is empowered to, among other things, propose strategies, policies, and minerals management master plans (the “Master Plans”) to Cabinet for approval. The first Master Plan will be prepared and updated by the NMC every five years. As part of this plan the NMC will need to designate areas that are mineral abundant with high economic value as mineral deposit areas for mining (the “MDAs”). Under the 2017 Minerals act, mining in preserved areas or mining of preserved minerals specified in Master Plans is prohibited. Moreover, the 2017 Minerals Act expressly provides that mining operation will only be granted in MDAs. It is worth noting that the 2017 Mineral Act does not require that mineral prospecting be undertaken in the MDAs only.

Key team members, including the Thai JV partner, Pornnaret Klipbua, Surapol Udompornwirat (Permitting Manager) and the Company’s Thai lawyers, DFDL, have attended numerous consultations on the new Mining Act 2017. These consultations included talks on the minerals management master plans, led by the Department of Mineral Resources Thailand and DFDL have produced minutes summarising the key points from these meetings. The DMR is responsible for submitting the draft submission of MDA “zones” for consideration by the NMC. The Company has met with key representatives from the MOI as well as the DMR and based on these conversations is confident that the areas over which the Thai JV has Mining Lease Applications will be designated as MDAs. This is in part because of the project’s historical operations, defined resource and clear economic potential of the area, and also due to the fact that the JV has existing applications over the area.

Conversations with various government officials as well as press releases indicate that the timing for submission of a final draft regarding the designation of the MDAs for consideration by the NMC is expected to occur in November 2017 and subsequently to be considered and approved by the NMC in December. Furthermore, this timing is backed up by a strong commercial rationale, since delays will have an impact on existing applications within the wider minerals industry in Thailand and in particular, to the large aggregates companies such as Siam Cement Group. As such, whilst the Board of Metal Tiger takes comfort from its consultations and meetings with regard to the project area being designated as a MDA, it believes it would be more prudent based on investor feedback to await confirmation of such designation prior to undertaking formal IPO marketing (which the Company has not yet commenced). As such, the Company believes it should postpone the IPO until Q1 2018 by which time it expects that the first Master Plan will have been published and the MDAs designated.

Valuation:

The Company believes waiting for clarification on the first Master Plan will significantly improve the valuation at which it is able to gain investor support. The Company notes that the attributable NPV10 (post tax) for 80% of the project would be valued at US$36,720,000 (£27,172,800) and therefore any valuation would typically apply suitable permitting, country and corporate overhead risk discounts to the valuation to determine the pre-money valuation as well as look at comparable listed companies’ valuations. It would be difficult to determine a fair policy risk discount and therefore the Board considers it best to postpone the IPO. The Company believes it will also get a far better valuation by postponing the IPO until Q1 2018 than what it could achieve if it marketed prior to the first Master Plan being published.

Public Hearing for Thai JV Project

The Thai JV is preparing to hold a public hearing for the project under Section 56 of the Mineral Act B.E. 2560. After a minimum 30 day gazetting period a Mineral Industries Official together with the Heads of the Villages where the mining project is located shall co-organise a “Public Hearing” attended by stakeholders, including villagers who live in the radius of 3km from the boundary of the mining lease application, committee of the village where the mining lease application is located and by Non-Government Organisations (“NGOs”) established with the objective of looking after natural resources and registered at the Department of Environment Promotion. In the event that more than half of the participants and more than half of members of the local Administration Council agree with the mining project, the Mineral Industries Official shall report the result of the meeting to the provincial Governor and Director of the Department of Primary Industries and Mines within seven days after receiving the result.

In the event that more than half of the participants or more than half of the members of the local Administration Council object to the mining project, the Mineral Industries Official shall report the results of the meeting together with the reasons for the objection to the provincial Governor and Director of the Department of Primary Industries and Mines, who will consider the reasons for the objection. If the reasons are not acceptable to them then they will instruct the Minerals Industries Official to continue the mining lease process.

If the grounds of the objection are judged valid then the authority shall instruct the Mineral Industries Official to conduct a meeting for a public vote.

The Thai JV will work to hold the public hearing before the year end and believes it should receive a positive outcome.

Pre-IPO Investors

On Thursday 7 March 2017, the Company announced that it had completed a successful pre-IPO private placing with High Net Worth and Sophisticated Investors for KEMCO Mining PLC (“KEMCO”), which is to be the listing vehicle for the Company’s Thai JV.

Given the Company is only announcing the postponement of the IPO, not a cancellation, the warrants will not immediately convert. In accordance with their current terms, conversion of the warrants into MTR shares will occur automatically on 13 October 2017, however the Board of Metal Tiger intend to write to pre-IPO investors requesting that they extend their conversion until this time. Metal Tiger Directors and management who subscribed for £67,000 have already agreed to delay the conversion until the end of February 2018.

In either case the conversion price will be calculated by reference to the 15-day VWAP of Metal Tiger shares following 13 October 2017 (or the extended date if applicable) less 20%. In other words, and for the avoidance of doubt, in the event of conversion on 13 October 2017, the VWAP is calculated from the trading days between 16 October through to 3 November, less 20%.

A further announcement will follow in due course to update the market.

Michael McNeilly, Chief Executive Officer of the Company, commented:

“We have taken the difficult yet necessary decision to postpone the Initial Public Offering of KEMCO Mining Plc until Q1 2018, as a result of the implementation of the new Thai Minerals Act that will make several important changes to the country’s 1967 Minerals Act.

Following initial conversations with government officials, we remain confident that the areas in which the Thai Joint Venture has Mining Lease Applications will be designated as MDAs. The forthcoming release of the Master Plan and designated MDA’s will provide further clarification to potential investors, whilst also delivering what we believe will be a boost to the proposed PLC’s valuation.

We are highly encouraged by the positive feedback we have had so far in our meetings with potential investors and pre-marketing roadshow and remain convinced by the strengths of the assets within the Thai Joint Venture and the suitability of KEMCO Mining Plc as a public company.”

For further information on the Company, visit: www.metaltigerplc.com:

Michael McNeilly (Chief Executive Officer)				Tel: +44(0)20 7099 0738
Keith Springall (Finance Director & Company Secretary)				Tel: +44 (0)20 7099 0738
Stephen Allen or Bhavesh Patel		RFC Ambrian Ltd (Nominated Adviser)		Tel +44 (0)20 3440 6800
Jonathan Williams		RFC Ambrian Ltd (Joint Broker)		Tel +44 (0)20 3440 6800
Nick Emerson		SI Capital (Joint Broker)		Tel: +44 (0)1483 413 500
Andrew Monk Andrew Raca		VSA Capital Limited (Joint Broker)		Tel: +44 (0)20 3005 5000
Gordon Poole James Crothers		Camarco (Financial PR)		Tel: +44 (0)20 3757 4980

Notes to Editors:

Metal Tiger plc is listed on the London Stock Exchange AIM Market (“AIM”) with the trading code MTR and invests in high potential mineral projects with a precious and strategic metals focus.

The Company’s target is to deliver a very high return for shareholders by investing in significantly undervalued and/or high potential opportunities in the mineral exploration and development sector timed to coincide, where possible, with a cyclical recovery in the exploration and mining markets. The Company’s key strategic objective is to ensure the distribution to shareholders of major returns achieved from disposals.

Metal Tiger’s Metal Projects Division is focused on the development of its key project interests in Botswana, Spain and Thailand. In Botswana Metal Tiger has a growing interest in the large and highly prospective Kalahari copper/silver belt. In Spain Metal Tiger the Company has tungsten and gold interests in the highly-mineralised Extremadura region. In Thailand Metal Tiger has interests in two potentially near-production stage silver/lead/zinc mines as well as licences, applications and critical historical data covering antimony, copper, gold, silver, lead and zinc opportunities.

The Company has access to a diverse pipeline of new opportunities focused on the natural resource sector including physical resource projects, new natural resource centred technologies and resource sector related fintech opportunities. Pipeline projects deemed commercially viable may be undertaken by Metal Tiger or by an AIM or NEX Exchange (formerly ISDX) partner with whom the Company is engaged.

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