Many analysts, chartists, bloggers and twitter posters are predicting the Metal Tiger share price is going to re-rate upwards.
Many follow what analysts and chartist ‘experts’ say and this can become a self-fulfilling prophesy. The herd arrive and the share price goes up.
Bonker99 has produced a blog highlighting the investment case (see here). This excellent blog indicates because of the Botswana asset the current value is c4.5p.
Significant value to be unlocked as at the time of writing this blog the share price is c2.08p.
As well as Botswana progressing well, other events are happening that are going to bring the investment case to a wider investor base.
The Swiss Cheese model suggests that when everything aligned the unexpected happens. The share price rise could therefore when it happens according to the theory be significant.
The Botswana opportunity is well documented in the broker99 blog. We also have the following events coming that will potentially impact in the share price.
1. MOD resource / MTR business alignment
Currently the 70%/30% JV split offers shareholders in both companies equal value, in the event of a capital event, as MOD has significantly more shares in issue than MTR.
What needs to change is an alignment of the two businesses that facilitates;
1.1 One business, or a structure that enables the two businesses to be bought by a major copper mining company.
Need to prepare now for the time when the business will be sold.
Reason for believing this will happen is:
- Julian Hanna has a timeline for entering retirement and would obviously like a capital event to happen so he can enjoy the fruits of his endeavours, over the last few years.
- MTR are an investment business rather than a production business.
1.2 A structure that provides better alignment between MOD and MTR.
Currently MOD if they could fund 100%, could focus on non JV areas. Currently costs are split 70%/30%. Hypotheticaly, if T3 sold MOD would be awash with funds and wouldn’t need MTR, they could therefore focus on non JV areas.
MTR have already built up a c5% interest in MOD. This is significantly reducing MTR’s risk. Increasing this percentage would further reduce MTR risk.
Reason for believing a plan is in place, is Sprott has invested millions in MTR rather than MOD. Why didn’t Sprott invest directly in MOD?
Obviously MTR have a strategy that Sprott has bought into.
Note: Sprott is the Warren Buffet of the mining sector.
2. Warrant Holders
To receieve ‘free’ KEMCO shares, shareholders need to exercise their warrants. When this happens private investors will know they are preparing for the KEMCO IPO.
Expect in the near future we will see warrant conversions. This will be like a chequered flag to some investors.
3. Delayed KEMCO IPO
Mid October we will get an announcement indicating the percentage of Pre-Ipo investors who have extended their agreement until February 2018, so they can take part in the KEMCO IPO.
We know MTR BOD are leaving their funds invested. Many private investors will also leave their funds invested.
This will be a big vote of confidence as investors are basically agreeing to leave their funds with MTR for another 4 months. Funds that could be invested elsewhere making returns.
4. Copper Price
The price of copper recently breaching the $3 a pound level for the first time since November 2014. This also significantly increases the potential returns from the T3 prospect and wider licence areas.
The cheese holes are aligning, with many aligned and long term holders are about to reap the rewards.
The share price re-rate will be quick.