Tag Archives: MTR

#MTR Kingsgate game of cards

Metal Tiger has been a sleeping giant for a while.

Interest has been sparked and investors are now taking more interest in the business.

This blog highlights some of the Metal Tiger Business opportunities (see here).

Since then Metal Tiger have indicated they are investing in Kingsgate. This blog provides some background information on Kingsgate and the Chatree mine and indicates MTR are not the only business who see Kingsgate’s challenges as an opportunity (see here).

Metal Tiger have previously stated they intended to curtail their asset trading activity and would sell investments at the appropriate time. We have seen this most recently with Greatland Gold (GGP).

We can therefore conclude that Metal Tigers investment in Kingsgate is possibly a strategic investment.

MTR have been steadily buying KCN shares in the open market. Currently have 5.34% of the shares plus whatever they bought on the 18th October.

Why are Metal Tiger interested in Kingsgate?

Obviously since the announcement of the closure of the Thailand Mine, Kingsgate shareholders have seen the value of their shares plummet.  Many large shareholders will have watched the share price drop from c$6 a share to c24c. Those who bought in at AUS$4 will have experienced a 94% drop.

If the mine re-opens and KCN shares increase in value to $2, this being a third of previous highs, based on today’s share price this would be a 440% return. This doesn’t take into account Kingsgate’s Chile assets or the profits MTR will have already potentially made buying KCN shares at a much lower price.

News on Chile asset due in December. This is expected to have a positive impact on the value of KCN assets.

So looking at conservative figures, MTR potentially looking at a minimum of a 500% return in a relatively short period of time. This is all dependant on the Chartree mine reopening.

What do Metal Tiger have to offer that could facilitate the opening if the Chatree mine?

1. Contacts

  • CEO lives in Thailand and is married to a Thai. Has great contacts in Thailand.
  • Terry Grammer lives in Thailand. Why in the last couple of weeks did he invest just under a half of a million pounds in MTR?
  • Mark Potter recently became a Thai national and lives in Thailand. Mark has exceptional contacts in Thailand.
  • Extensive network of contacts in government departments.
  • Team on the ground with extensive experience in obtaining mine permits. For example Surapol Udompornwirat a Thailand permitting specialist. Surapol previously worked for Kingsgate.

2. Reputation

MTR have a good reputation in Thailand. This is completely opposite to Kingsgate’s reputation.

Everybody knows that to operate in Thailand you need to respect the Thai culture.

3. Liquid Assets/funds

MTR have in recent weeks built up a significant war chest with for example £480k from Terry Grammer and returns from their asset trading division,

4. Sprott / Rick Rule

The Warren Buffet of the mining sector has made a significant investment in MTR. Why recently was MTR CEO at a meeting with Rick Rule of Sprott? Sprott will be on side with the KCN play.

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What happens next regarding KCN?

1. MTR decide not going to achieve their goal and exit their position with a substantial profit?

2. MTR continue to buy and at the appropriate time make their move.

a. Put somebody on the board?

b. Replace the board?

c. Package up KEMCO/KCN?

d. Use contacts/expertise to get Chartree mine reopened?

e. KCN take measures to repel MTR action. All they can do is take on debt to make business less attractive, buy back shares to make cost for MTR greater, convince shareholders that they rather than MTR are the best option for shareholders.

KCN have informed ASX that they intend to buy back 10% of the shares. These will be cancelled pushing up the share price. Unfortunately for KCN they now have to wait 2 weeks and can then only purchase 2% of the shares every 30 days.

This means MTR have a two week window to buy on the open market before KCN can do the same. I am therefore expecting MTR to buy everyday on the open market.

MTR can buy about 15% of the traded volume in a day without moving the sp up or down. The fact they are currently buying c20% in the open market indicates they are being fairly aggressive.

If MTR stop buying we can conclude they have reached their goal or have an off market agreement with a major shareholder.

This is getting interesting, with MTR currently in the driving seat for the next couple of weeks.

I await KCN’s and MTR’s next moves with interest. It certainly looks as if MTR are holding all the Aces in this game of cards.

 

 

 

 

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Invest in Metal Tiger #MTR or MOD Resources #MOD?

The recent brokers note on MOD Resources indicated a target, giving an uplift of 50% to the current share price (see here).

This target is based predominantly on the T3 prospect, a joint venture with Metal Tiger (70/30% split).

IMG_1788Investors wanting to invest in this copper prospect in Botswana, have a choice, invest in Metal Tiger (MTR) or invest in MOD Resources (MOD).

Because of:

1. British Pound vs Australian dollar exchange rate

2. MOD has significantly more shares in issue the MTR

3. 70% MOD, 30% MTR split

4. MTR having 5% of MOD share capital

the returns should the T3 prospect be sold and capital returned to shareholders would currently favour MTR investors.

Looking at  the pros and cons for investing in MTR vs MOD,you need to consider the following:

1. MOD have announced over the next year they will be investing A$10m in Botswana. 75% of this investment will be used on MOD/MTR prospects. The downside is what the exploration within MOD 100% areas will discover.

2. MTR JV covers several MOD prospect areas. All the areas highlighted in orange in this table.IMG_10073. MTR will be announcing this month details of the Thailand IPO (KEMCO). MTR shareholders will receive ‘free’ shares in KEMCO. Currently the MTR share price doesn’t include any value for Thailand.

4. Disparity between MOD and MTR share price. MOD share price has increased whilst the MTR share price has stagnated.

IMG_1858At some stage you would expect MTR share price to increase and for the gap to close. Alternatively it could be MOD over priced.

5.  Copper price now over $3/lb. This is still below the 5 year high with many analysts predicting the price will continue its rise.

6. Having met the management of both companies they come across as professional and competent.

7. Assays due from the holes drilled on T3 when drilling recommenced in the first week of August. We already know visible copper present. What will happen to the share price if significant results or trading halt called due to ASX requirements? Could this result in a spike in the MTR sp as trading will not be halted on the AIM market?

8. Sprott took a significant investment in MTR. Why didn’t they invest in MOD when they did their placing? Have they decided that MTR is the better investment?

9. Finance – both MTR and MOD have significant capital to fund drilling.

10. NPV of A$210m for T3/T1 is only going to increase as data analysed.

Looking at these 10 points, the following graphic indicates the best investment, MOD or MTR (white = neutral, green MTR, red MOD).

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Near term more value is going to come from MTR/MOD JV licence areas rather than those owned 100% by MOD.

If somebody wanted more exposure to the other MOD licence areas, you could put a strong case forward to invest in MTR, take the potential near term gains and then invest in MOD.

Another consideration would be each businesses other interests such as MOD’s Sams Creek asset and MTR’s investment portfolio.

MOD or MTR, it looks like September is going to be a very interesting time for the share price.

The recently released MOD, Ocean presentation and brokers note made me question if I should invest directly in MOD. I have concluded that investing in MTR offers the greatest potential.

If MOD and MTR merged (after the KEMCO split), this would remove the requirement for investors to make the decision and also simplify the acquisition process, if a major copper business was interested in the business. 

Investors who invest now are in at basement level prices. It’s just a matter of sitting and waiting for the BOD’s of both businesses to deliver.

Metal Tiger investing in #Thailand. #MTR

The Thailand IPO is due to happen in June/July 2017.

This will be when Metal Tiger shareholders will be ‘given’ shares in KEMCO the new Thai company.

Not many companies you can invest in knowing that in the very near future you will be the beneficiary of shares in another company. What is even more compelling is the current share price of Metal Tiger doesn’t take into account any value for Thailand.

KEMCO will be launched in June/July and this will be followed by events that will potentially have a positive impact on the share price. These being:

1. Thailand new permitting requirements goes live in August.

2. MTR apply for relevant permits August.

3. Kingsgate started their 3 month consultation period regarding the closure of their Thai mine at tthe beginning of April. Positive outcome announced July/August would have impact on sentiment towards KEMCO.

4. Directors and Major shareholders of MTR have been exercising their warrants. If this continues it is a clear indication all are preparing to ensure they are entitled to as many ‘free’ KEMCO shares as possible.

5. Announcement about key investors who have taken part in the KEMCO IPO.

Thailand venture is approaching a 3 month period when announcements are expected that will have a positive impact on market sentiment.

 

We also have Botswana with the current delay associated with environmental permits due to come to an end as announcements on applications submitted and awarded released to market.

 

Tiger shareholders who have researched the business can see the bottleneck of news that is coming. Investor sentiment could change overnight with the announcement of any one of the above events.

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#MTR fund raising and MOD Resources.

Metal Tiger placing has created some unrest amongst smaller private investors with many believing the dilution of their shareholdings has benefited the BOD and major investors.

In fact the BOD and major investors have also seen their shareholdings diluted.

So why has the Metal Tiger placing happened when the share price so low?

What we do know is MOD have said they intend to drill the life out of T3. To do that they need funding.

We now have A$5.46m (c£3.19m) raised by MOD resources with institutional investors partaking. MOD Resources are ready to start drilling T3 in early January 2017.

What would have happened to the MTR share price if they hadn’t already had their placing? In all probability the MTR share price would have gone down as investors would know MTR need to fund 30% of the T3 exploration. This scenario would have resulted in the MTR placing being at lower levels than has already occurred.

It looks like MTR had no choice but to raise the necessary funding when they did.

We know the CEO of MTR and MOD BOD members, together, attended meetings with potential funders during MOD boards recent visit to the UK. Is it possible as a result of these meetings, institutional investors indicated willingness to invest in MOD?

If that’s the case this could explain why MTR offered warrants as part of their placing and MOD haven’t.

It is going to be interesting to see what happens to the share price of MTR as a result of this news.

Investing is about the transfer of wealth from the impatient to the patient.

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#MTR getting closer to an offer?

The Quarterly Activities Report issued today contains information that indicates MTR’s strategy of proving up resources and transferring increased asset value into shareholder returns is moving closer to fruition.

The report states:

1. MOD/MTR joint venture is receiving interest from third parties, including major mining organisations and investment funds.

2. Metal Tiger have recently received interest in their 30% position in the JV and the company continues the liaise with third parties.

We also have the General Meeting today passing both resolutions, moving the company closer to the position of being able to distribute assets too shareholders. The court order will follow.

The following events are IMHO reasons to believe the company is moving closer to fulfilling their strategy of returning value to shareholders:

  • Weak pound, whilst it lasts, makes now a good opportunity for overseas investors or companies to make an offer for MTR’s investment in Botswana.
  • JV have changed their strategy and are focusing prospecting the T3 dome. Is this to maximise the known potential of the area before a formal offer us tabled?
  • Both MOD and MTR are receiving interest from major mining companies or investment companies. This is the first time we have been informed both companies are being pursued.
  • Recent RNS stated:

1. Reinterpretation of magnetics data has resulted in drilling being refocused on the T3 dome. It must be significant when MOD have previously stated that other zones are potentially better than T3. I wonder what MOD have seen that has made them change their plan?

Or was this a subtle way of letting any potential buyer know that MOD/MTR intend to keep increasing their knowledge of the T3 area and the JORC information released to date is only part of the story?

2. Deep IP hole arisings had visible copper mineralisation and the assay results are now awaited.

MOD mentioning what they have indicates they expect the assay data to be significant. If they didn’t, why have they mentioned in an announcement to the market?

It is definitely a good way of letting any potential buyer know that the JORC information is only the tip of the resource.

 

MTR made an investment of $100k in Botswana. The returns look as if they will be substantial when you consider that T3, if this is the area of any offer, is less than 1% of the JV licence area.

T2 apparently is a more promising prospect.

Mining company strategy – preparing for commodity cycle bounce.#MTR #KGLD #GGP

Interesting graphic indicating how small mining companies can take strategic actions to prepare themselves for future opportunities as the commodity cycle moves to the next phase.

As the market bounces from the bottom of the commodities cycle, those companies that have prepared themselves for the upswing will be in a very good position to maximise shareholder returns.

Strategic positioning carried out by several AIM companies will enable them to make strategic acquisitions that will maximise shareholder returns as the market recovers.

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#MTR Asset division timing and #MOD joint venture

Mining companies share prices have fallen out of sync with other markets as can be seen in this graph.

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How long will it be before the sector is back to the position it was in May 2014?

The Metal Tiger asset division has taken a position in many companies as they believe we are at the bottom of the cycle. If they are correct it can be seen from this graph that mining sector companies have the potential to make significant share price gains.

Metal Tiger also have the added driver that it has, with their joint venture partner MOD Resources an interest in a potentially enormous copper prospect in Botswana.

With China accounting for 40% of the copper market and their economy increasing it is easy to see why  major businesses in the sector are looking to secure copper resources. Whilst the growth in the China economy is not now predicted to be as great as previously forecast the growth will have a significant impact on copper demand due to their dominance in the market.

We also have countries such as India who are forecast to double their copper requirements.

 

MOD/MTR are in an enviable position and should be able to maximise their returns due to the size of the Botswana copper prospect and its discovery at a time when copper resources are in demand.

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