CONTENTS
COMPANY
INFORMATION
1 COMPANY INFORMATION
DIRECTORS :
2 STRATEGY AND PERFORMANCE
2 Chairman’s Statement
3
Chief Executive
Officer’s Commentary
4 Strategic Report
Charles Patrick Stewart Hall
(Non-Executive Chairman)
David Michael McNeilly
(Chief Executive Officer)
Mark Roderick Potter
(Chief Investment Officer)
Terrence Ronald Grammer
(Non-Executive Director)
Neville Keith Bergin
(Non-Executive Director)
27 GOVERNANCE
SECRETARY :
Malcolm Graham Bacchus
27 Chairman’s Corporate
Governance Statement
28 Board of Directors and
Committees of the Board
31
Compliance with the QCA
Code of Practice
33 Report of the Directors
36 INDEPENDENT AUDITOR’S REPORT
REGISTERED
OFFICE :
107 Cheapside,
London EC2V 6DN
COMPANY
REGISTRATION
NUMBER :
04196004
REGISTRAR
AND TRANSFER
OFFICE :
Link Asset Services
The Registrar, 34 Beckenham Road,
Beckenham BR3 4TU
41 FINANCIAL STATEMENTS
BANKERS :
NatWest Bank plc
180 Brompton Road,
London SW3 1HL
41 Consolidated Statement of
Comprehensive Income
42 Consolidated and Company
Statements of Financial
Position
43 Consolidated and Company
Statements of Cash Flows
44 Consolidated Statement of
Changes in Equity
45 Company Statement of
Changes in Equity
46 Notes to the Financial Statements
77 NOTICE OF ANNUAL
GENERAL MEETING
FRONT COVER : Airborne electromagnetic data
collection over the Okavango Copper Project
using New Resolution Geophysics’ XCiteTM system
SOLICITORS :
Faegre Baker Daniels LLP
7 Pilgrim Street,
London EC4V 6LB
Clayton Utz
Level 15, 1 Bligh Street, Sydney,
NSW 2000, Australia
DFDL Mekong (Thailand) LLP
No 3 Rajanakarn Building, South Sathorn Road,
Yannawa Sub-District, Sathorn District,
Bangkok Metropolis 10120, Thailand
AUDITOR :
Crowe U.K. LLP
St Bride’s House, 10 Salisbury Square,
London EC4Y 8EH
NOMINATED
ADVISOR :
Strand Hanson Limited
26 Mount Row
London W1K 3SQ
JOINT
BROKERS :
Arden Partners plc
125 Old Broad Street
London EC2N 1AR
SI Capital Limited
46 Bridge Street, Godalming,
Surrey GU7 1HL
1
Annual Report & Accounts | 2018
CHAIRMAN’S STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2018
The Group also incurred a loss on the sale of its equity
stake in Kingsgate Consolidated Limited although the
majority of this loss, as reflected in these financial
statements, represents an unwinding of a gain reported as
at 31 December 2017 on marking to market at that date.
Whilst we have reduced our operating costs during the
year, the overall effect of these gains and losses is to
record a loss for the year, before tax, of £3.96million,
although it should be appreciated that this is after recording
£12.4million of unrealised losses in our Direct Equities
portfolio, which may reverse during the holding period.
We are continuing to work hard in realising value from
the Group’s investments and to make new strategic
investments in the market. Shareholders will appreciate,
however, that investments in early stage mining projects
and companies which carry out such projects are not
short term players and may take some years to realise their
full potential.
On corporate governance, shareholders will note that we
have joined the Quoted Company Alliance and we have
included in our Report and Accounts this year a detailed
description of our corporate governance practices and
how it aligns with the QCA code. We have also taken the
opportunity this year to introduce on-line voting for the
Annual General Meeting, which will both make it easier
for shareholders to vote and cut down on our use of
paper. Full details of how to vote on-line are given in the
notes at end of the Annual General Meeting Notice which
is included with this Report and Accounts. Shareholders
who are unable to take advantage of on-line voting may
still vote by paper and details of how to do this are also
included in the Annual General Meeting notes.
I should like to take this opportunity to thank all our
shareholders, business partners and staff for their
continued support of the Company and look forward to
our future together.
Charles Hall
Chairman
30 May 2019
I am pleased to present the Group’s annual report
and audited financial statements for the year ended
31 December 2018.
In July 2018, we were delighted to announce the sale
of the Group’s 30% interest in the T3 Copper Project in
Botswana, which we held in a joint venture with MOD
Resources Limited (“MOD”) of Australia, to MOD. In
consideration for the sale of its 30% interest, Metal Tiger
received shares, options and royalty interests amounting to
£16.8million and generating a profit of £12.5million. The
sale has increased the opportunity for the Group to invest
in other projects, to reduce its cash exposure to funding
the development of the T3 resource whilst continuing
to benefit from the potential upside in those assets as
reflected in our resulting enlarged stake in MOD. The
Group retains its interests in the remaining exploration
assets through a new joint venture company where the
Group holds a 30% interest and MOD holds 70%.
The Group also invested £859,000 during the year to
acquire 34% of Kalahari Metals Limited (“KML”) with
interests in the Kalahari Copper Belt in Botswana close to
the MOD property. The acquisition agreement provided
for an option to increase this interest to 50% for a further
US$500,000, which was exercised following the year end.
As reported last year, development of the Group’s interests
in Thailand were delayed pending the Thai Government’s
ratification of its new Minerals Management Master Plan,
which was only effectively completed in December 2018.
We believe there is the potential to increase significantly
the resources at the Boh Yai lead-zinc-silver mine
through a modest exploration drill campaign and we, in
conjunction with our joint venture partner, continue to
determine the optimal path forward.
The drilling programme at our Spanish sites, held via a 50%
interest in Logrosán Minerals in Spain, during 2018 and
early 2019, has provided some exciting results with high
grade tungsten and gold intersections.
The profits made in the sale of the T3 interests have been
offset by a decline in the price of MOD shares during
the course of the year and by a more general reduction
in the market price of our quoted equity portfolio. The
decline, across the market, has been caused by a number
of external factors, including but not limited to, US-China
trade tensions and, closer to home, Brexit. With that said,
and in spite of some negative sentiment with regard to
the global economy, demand for copper is anticipated to
remain strong and we would hope to see the price start to
recover in 2019.
2
Metal Tiger plc CHIEF EXECUTIVE OFFICER’S COMMENTARY
FOR THE YEAR ENDED 31 DECEMBER 2018
I am pleased to present the audited results for the year
ended 31 December 2018.
Alongside the financial statements and supporting notes, a
full review of business activities during the year is provided
within the Strategic Report.
Given that the results are for the period ended
31 December 2018, they reflect a historical position in terms
of the Group’s progress and indeed its financial position.
Accordingly, to assist, therefore, we have included within
the Strategic Report further information on the key events
post year end.
This highlights the substantial progress achieved by the
Group’s copper/silver investments in Botswana and, in
particular, the sale of its 30% interest in the T3 Copper
Project in Botswana to MOD Resources Limited (“MOD”).
This sale represented a shift in direction for the Company
in relation to one of its key Direct Project investments. The
Board was cognisant of the complexities that would have
been faced trying to fund and co-develop the T3 Copper
Project. The structure of the deal set pre-defined terms for
MOD to acquire exploration assets along pre-determined
valuation guidelines from Metal Tiger, further details of
which are set out in the Strategic Report.
The first half of 2018 saw renewed enthusiasm for copper,
with prices reaching peak levels in June 2018, followed by
a sharp drop and sustained suppression thereafter. Many
pundits have blamed the US-China trade war for the falls
in several commodity prices, especially copper, and yet
this drastic drop seems to be decoupled from the medium
to long term supply demand story, which, in the Board’s
opinion, remains very strong. As such, the Board believes
that its opportune repositioning to one which is more
likely to be rewarded by the increased M&A activity that is
typical where a disconnect between short term price and
long term forecasts and supply and demand fundamentals
establishes itself.
The Board considers the Kalahari Copper Belt to remain
largely under-explored and believes that the T3 discovery
has resulted in a paradigm shift in terms of exploration
which opens up the possibility that the tonnage required for
larger copper producers may exist in a form in the ground
that can be mined economically and with vast scale.
This conviction actively led the Board and its technical
consultants to identify in Kalahari Metals Limited (“KML”) an
investable operational team with a significant land package
in the Kalahari Copper Belt. In 2018, this investment bore
fruit as the money invested was spent rigorously identifying
drill targets, progressing environmental permissions and
strategic opportunities to double KML’s land package in the
Kalahari Copper Belt.
2018 saw some important management changes, with a
reduction in Board size and the transition of Mark Potter
from a Non-Executive Director to Chief Investment Officer.
Furthermore, the Company switched from having a full-
time technical director to using technical consultants on an
as-needed basis to assist the existing technical knowledge
of the Board and team at Metal Tiger.
In early 2018, Metal Tiger attempted unsuccessfully to
remove certain members of the board of Kingsgate
Consolidated Limited and subsequently exited its position in
the company.
The Board made the tough but necessary decision to cut
back costs and staff in Thailand in 2018 whilst waiting for
the implementation of the new Minerals Act and associated
regulations. The Board believes that the work undertaken by
the team in Thailand has created significant value and looks
forward to progressing the project as the opportunity arises.
In 2018, the Company made several investments with a
view to the future and to generating substantial returns for
the Group, which are set out in the Strategic Report. It is
our belief that the Group has a diverse and varied exposure
to several strong management teams, commodity classes,
some excellent geology and a diverse range of jurisdictions,
with the potential for significant returns from several of
the investments. A key challenge of the Company remains
finding suitable Direct Project investments where it can
properly implement its strategy given its relative size and
limited access to finance on suitable terms.
In 2018, we continued to be active in Direct Equities,
making a number of investments over the year, as well
as three further investments post year end. We continue
to seek opportunities, be that through new or further
investments or divestments of existing investments, to
create shareholder value. Further details of our Direct
Equities activity are set out in the Strategic Report.
We have continued to make good progress in 2019 across
both our Direct Project and Direct Equities Divisions and
further details of our activities post year end are set out in the
“Post Year End Developments” section of the Strategic Report.
I would like to place on record my thanks to all the team
at Metal Tiger and its advisors who have worked incredibly
hard to bring the Company to its present strong position.
And finally, but most importantly, my thanks to the
shareholders who have continued to support the
Company and to those investors who helped finance the
Company. We continue to deliver our strategic objectives
of generating value in the resource sector for the benefit of
Metal Tiger shareholders.
Michael McNeilly
Chief Executive Officer
30 May 2019
3
Annual Report & Accounts | 2018 STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2018
RESULTS
The results of the Group for the year ended 31 December 2018 are set out the Consolidated Statement of Comprehensive
Income and show a loss before taxation for the year ended 31 December 2018 of £3,958,000 (2017: loss £347,000).
The net asset value of the Company rose to £18,951,000 from £15,443,000 being 1.40p per share from 1.33p per share in
2017 on a fully diluted basis.
REVIEW OF THE BUSINESS DURING THE YEAR
The Group’s operations are carried out within two divisions.
Direct Projects are direct investments into mineral exploration and development projects either through subsidiaries, associates
or joint venture companies, operated by the Group’s in-country partners who have the requisite knowledge and expertise to
advance projects.
Direct Equities are either strategic investments or part of an on-market portfolio. Strategic investments are those where Metal
Tiger seeks to influence positively the management of investee companies to enhance shareholder value. The on-market
portfolio investments in listed mining equities and warrants, with a view to making capital gains both in the short and long
term as a result of market mispricing or an increase in underlying commodity prices. The on-market portfolio consists of
investments in listed mining equities and warrants where the Board believes the underlying investments are attractive. The
goal is to make capital gains both in the short and long term as a result of market mis-pricing or an increase in underlying
commodity prices.
The following sections of the review cover the operations of both divisions during the year, the Group’s general investment
policy and central operations including administrative costs and working capital.
Tshukudu Metals Exploration Team
4
Metal Tiger plc Direct Projects
BOTSWANA
T3
0
50
100
150
Kilometres
Joint venture operations with MOD Resources Limited
Having announced binding terms in July 2018, in
November 2018, Metal Tiger completed a transaction with
its 70% joint venture partner and operator, ASX-listed MOD
Resources Limited (“MOD”) to sell its 30% interest in the T3
Copper Project (circa 24km2 within prospecting licence
PL190) for 17,090,000 MOD shares and unquoted options
to receive a further 40,673,566 new ordinary shares for
nil consideration, exercisable under certain conditions for
a total value equivalent to £15.57million as at the date of
the deal. In addition, Metal Tiger obtained a US$2million
capped net smelter royalty over the T3 Project as part of
the transaction.
Furthermore, Metal Tiger and MOD established a
new exploration joint venture company, Metal Capital
Exploration Limited (“Metal Capital Exploration”), held 30%
by Metal Tiger and 70% by MOD, and operated by Metal
Capital Exploration’s wholly owned subsidiary Tshukudu
Exploration Botswana (Pty) Limited (“Tshukudu Exploration”).
Metal Tiger is restricted from holding more than 12.5%
of MOD’s issued share capital until 16 November 2021
(“Prohibited Voting Restriction”).
Following completion of the transaction, Metal Tiger’s direct
interest in MOD, consisting of the shares and options, falls
within Direct Equities, whilst the new joint venture remains
within Direct Projects.
Metal Tiger granted MOD contractual rights over the
new joint venture company, exercisable under certain
conditions, including the rights (subject to any requisite
shareholder and regulatory approvals/waivers) to purchase:
• 100% of further discoveries on Prospecting Licences held
by Tshukudu Exploration, which progress to an announced
scoping study (the “Mineral Resource Option”);
• Metal Tiger’s 30% interest in Tshukudu Exploration as
a one-time election on the third anniversary of the
transaction (the “JV Roll-up Option”); and
• Metal Tiger’s 30% interest in Tshukudu Exploration in
the event of a board endorsed change of control of
MOD (the “JV Consolidation Option”).
Mineral Resource Option
MOD has a right to purchase any asset held by Tshukudu
Exploration that is the subject of a scoping study
announced to the ASX. MOD may exercise the option by
paying cash, issuing ordinary shares or cashless options
or any combination of cash, shares and cashless options
at MOD’s election and subject to any applicable laws
(including the ASX and LSE Listing Rules). The contract
includes provisions to ensure that appropriate waivers are
made should MOD’s choice of consideration place Metal
Tiger in a position where it would breach Metal Tiger’s
Prohibited Voting Restriction. The consideration to be paid
on such exercise of the Mineral Resource Option is to be
calculated according to the relative proportion of MOD’s
enterprise value that independent brokers attribute to the
value of the asset, the subject of the Mineral Resource
Option at the time of exercise, multiplied by MOD’s actual
trading enterprise value based on its 20-day VWAP and
applied to Metal Tiger’s percentage ownership in the asset.
All Mineral Resource Options will lapse following a bidder
acquiring at least 51% of MOD pursuant to a change of
control offer to acquire 100% of MOD.
Each Mineral Resource Option may be exercised by
MOD at any time between 60 and 150 days following
the announcement of the results of the scoping study. A
Mineral Resource Option not exercised within this time
period will lapse but will not affect the Company’s right to
exercise a future Mineral Resource Option arising from:
• a different scoping study; or
• a materially revised scoping study based on the same
exploration asset, as defined, always provided that there
shall be a maximum of two relevant scoping study
results announcements for the same asset.
5
Annual Report & Accounts | 2018 STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2018
JV Roll-up Option
For the three years following completion of the
sale of T3 and the establishment of the new JV,
(for a period of 90 days), MOD has a one-off right
to acquire Metal Tiger’s 30% interest in Tshukudu
Exploration (held via Metal Capital Exploration). MOD
may exercise this option by paying cash, issuing
ordinary shares, cashless options or any combination
of cash, shares and cashless options at MOD’s
election and subject to any applicable laws (including
ASX and LSE Listing Rules). The consideration to be
paid by MOD on exercise of the JV Roll-Up Option
will be calculated based on the relative proportion
of MOD’s enterprise value that independent brokers
attribute to the value of Tshukudu Exploration at
the time of exercise multiplied by MOD’s trading
enterprise value based on its 20-day VWAP and
applied to Metal Tiger’s percentage ownership in the
asset. Metal Tiger will receive a 2% net smelter return
royalty in respect of any future production from the
assets of Tshukudu Exploration (excluding those
assets already acquired under a Mineral Resource
Option). The JV Roll-up Option will lapse following a
bidder acquiring at least 51% of MOD pursuant to a
change of control offer to acquire 100% of MOD.
JV Consolidation Option
In the event of any MOD board-recommended
change of control offer to acquire 100% of the shares
of MOD, then MOD will have a right to acquire
Metal Tiger’s 30% stake in Tshukudu Exploration at
any time prior to the bidder acquiring 51% of MOD
pursuant to the change of control. If the change of
control event fails to complete, the completion of
the JV Consolidation Option will not occur but the
JV Consolidation Option will not be extinguished for
any future change of control events. Consideration
on exercise can only be paid in cash. Consideration
will be calculated according to the relative proportion
of MOD’s enterprise value that independent brokers
attribute to the value of Tshukudu Exploration at the
time of exercise multiplied by the implied enterprise
value of the change of control offer and applied to
Metal Tiger’s percentage ownership in the asset.
Metal Tiger will also receive a 2% net smelter royalty
in respect of any future production from the assets
which are the subject of the JV Consolidation Option
(excluding those assets already acquired under a
Mineral Resource Option).
Unquoted MOD Options
The unquoted options have:
• no voting or dividend rights until they are
converted into ordinary shares;
6
Drill core showing coarse grained bornite and chalcopyrite
Metal Tiger plc • may be exercised at any time following completion
i) a standard dilution formula for a non-contributing
for nil consideration provided that it will not cause the
Company to have voting power in excess of 12.5% of
the issued ordinary shares in MOD upon issue of the
resulting ordinary shares;
• may not be exercised unless the number of ordinary
shares to be issued to the Company upon exercise
would be at least 2% of the issued ordinary shares,
provided that if the Company only holds unquoted
options which are capable of exercise into less than 2%
of MOD’s issued ordinary shares, such restriction will
not apply; and
• have an expiry date which is three years from the date
of completion, being 16 November 2021.
Operation of New Exploration Joint Venture
The New Joint Venture is governed by a shareholders’
agreement entered into between MOD and the Company
in respect of their shareholdings in Metal Capital Exploration
and Metal Capital Exploration’s 100% interest in Tshukudu
Exploration, incorporating the following key terms:
a) the board of Metal Capital Exploration comprises two
directors nominated by MOD and one nominated by
Metal Tiger; and:
i) if the Company’s shareholding in Metal Capital
Exploration is reduced to 10% or less then the
Company shall not be entitled to nominate any
directors (and its representatives on the board
shall immediately resign as directors of Metal
Capital Exploration);
ii) if the Company’s shareholding in Metal Capital
Exploration is reduced to 30% or less then the
Company shall only be entitled to nominate one
director (and any other of its directors on the board
shall immediately resign as directors of Metal Capital
Exploration); and
iii) if the Company’s shareholding in Metal Capital
Exploration is reduced to 10% or less then the
Company shall not be entitled to nominate any Metal
Capital Exploration directors (and its representatives
on the board shall immediately resign as directors of
Metal Capital Exploration);
b) MOD is the manager of all operations and activities
pertaining to the exploration assets;
c) all funding required will be by way of equity
contributions and/or shareholders’ loans and
contributed to pro rata by MOD and Metal Tiger in
accordance with their shareholding in Metal Capital
Exploration, with:
party to apply until any right granted in respect of the
exploration assets has lapsed; and
ii) following the lapse of any right granted in respect
of the exploration assets, the dilution for a non-
contributing party shall be determined by two experts
based on the value of the assets of the joint venture;
d) if Metal Tiger’s or MOD’s shareholding in Metal Capital
Exploration is diluted to less than 10% then Metal
Tiger or MOD, as the case may be, must transfer their
shares in Metal Capital Exploration to the non-diluting
shareholders (on a pro-rata basis) in consideration for
the grant by Metal Capital Exploration of a 2% NSR
royalty in favour of the diluting Metal Capital Exploration
shareholder; and
e) the sale or transfer of a shareholder’s shares in Metal
Capital Exploration is subject to customary pre-emptive
rights and drag and tag rights.
The Company has appointed Michael McNeilly as its MOD
board representative, and maintains the right to an MOD
board representative provided that the Group owns at least
a 10% interest in MOD (including shares and MOD options).
The Company has committed to support MOD Board
recommendations until November 2021, with certain
restrictions also having been placed on the Company’s
ability to sell MOD shares. The lock up on Metal Tiger’s
17,090,000 MOD shares no longer applies from
16 November 2019.
The Company is restricted from holding over 12.5% of
MOD’s issued share capital until 16 November 2021,
except that waivers will be made should MOD’s choice of
consideration on the exercise of Mineral Resource Option
cause a breach of this restriction.
Strategically, the transaction placed the Group with an
effective 47% interest in the new exploration JV, whilst
removing the requirement to fund the T3 Copper Project.
The Definitive Feasibility Study (“DFS”) for the T3 Copper
Project was completed and announced by MOD
Resources at the end of March 2019. Further details of this
are given in the review of post year end developments
later in this report. Upon completion, results of the T3 infill
programme will be incorporated into an updated resource
model during the third quarter of 2019, when MOD
expects to upgrade a significant proportion of production
within the first two stages of the open pit into the higher
confidence JORC compliant Measured Resource category.
This may result in upgrading part of the current Probable
Ore Reserve to the Proved Ore Reserve category.
7
Annual Report & Accounts | 2018
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2018
Regional Exploration (Metal Tiger 30%)
The Kalahari Copper Belt is one of seven sediment hosted
copper belts that have demonstrated potential to host
deposits with over 2,000,000 tonnes of contained copper.
hitting 52m at 1.5% Cu in A4, 130m at 0.52% Cu in A1, and
25m at 0.36% Cu in T23 (Figure 1). Economic tonnages
and grades have yet to be demonstrated, however the
technical success rate is considered to be impressive,
especially as numerous similar targets remain to be tested.
During the last quarter of 2018, the Minister for the
Department of Mineral Resources, Green Technology and
Energy Security renewed 18 key licences for a minimum
of two years and transferred these licences from Tshukudu
Metals Botswana (Pty) Ltd to Tshukudu Exploration.
Tshukudu Exploration’s extensive landholding in the
Kalahari Copper Belt includes several regional soil and
Airborne Electromagnetic (“AEM”) anomalies that occur
scattered within a zone extending over >140km along
the Central Structural Corridor. This includes the 50km
long T3 Dome hosting the T3 deposit and the interpreted
~60km long anomalous soil zone within the T20 Dome.
This land package increased in 2018 when Tshukudu
Metals Botswana (Pty) Ltd, acquired a 100% interest in two
exploration licences PL126/2013 and PL127/2013 over the
centre of T20 Dome.
In Q2 2018 and Q3 2018, Tshukudu Exploration received
long-awaited Environmental Management Permits, which
provide the necessary permission to commence drill
testing, for ~680km2 around T3 and for ~700km2 at the T20
“dome complex”, respectively. Since then, the company
drilled three regional targets (A4, A1, T23) within trucking
distance of a nearby processing plant and encountered
significant copper (plus silver) mineralisation in all three,
During 2018, the joint venture completed exploration
activities on selected targets within two well defined
areas, the T3 Expansion Project and the T20
Exploration Project. At the T3 Expansion Project
the priority targets drilled during 2018 were at the
A4 Dome and the A1 Dome. Minor drilling was
completed within the T20 Exploration Project area.
The A4 Dome is located 8km from the T3 Copper Project,
with 20 holes having been drilled in 2018. It remains
a high priority target with 18 of the completed holes
being successful in identifying both vein hosted and
Ngwako Pan Formation (“NPF”) contact mineralisation.
It is believed by the joint venture that the A4 Dome
could represent future underground mine potential as
feed for the T3 Copper Project. Therefore, viewed in
the context of the Company’s deal with MOD, the A4
Dome represents a highly strategic project for drilling.
The A1 Dome is located 22km to the northeast of the T3
Copper Project. In 2018, six widely spaced holes were
drilled, intersecting copper and NPF contact mineralisation
with one drill hole intersecting 52m at 0.61% Cu from
624m and included two individual assays of 3.66% Cu and
4.29% Cu on the NPF contact from 673m down-hole.
Figure 1
T3 Expansion Project
(~950km2): Significant copper
intersected in all Domes drilled
to date. Target high-grade
vein & NPF contact potential.
8
Metal Tiger plc T20 Exploration Area
The T20 Exploration Area, located
approximately 100km west of the T3
Dome and interpreted to occur within
the same structural corridor, remains
a high priority for future drilling. T20
Dome includes multiple copper and
zinc soil anomalies, several with similar
or higher values to those associated
with the original T3 discovery. More than
80,000 soil samples were taken across
the T20 Exploration Area, identifying
multiple copper and zinc anomalies
displaying similar or higher values to
those associated with the original T3
discovery. These samples occur in a
~60km long zone extending from the
T20 Dome to the T4 Copper Prospect.
These results were announced on
25 January 2018.
The T20 Exploration Area is interpreted
to be underlain by shallow dipping
sediments including the prospective
D’Kar Formation (“D’Kar”) and NPF
contact. This contact hosts high grade,
structurally related, copper deposits in
the eastern part of the Kalahari Copper
Belt. The combined strike length of the
zone that hosts the T20 soil anomalies
and the T3 AEM anomalies is interpreted
to extend >140km.
A surface calcrete layer covers large
areas of the T20 Area and there is no
known previous exploration drilling
apart from at the adjacent T4 Copper
Prospect. From experience gained at
T3, it appears that zinc is more mobile
than copper in the weathering profile
and may be detected above the calcrete
layer more readily than copper. The
peak soil value that led to the discovery
of T3 at shallow depth below calcrete
was 28ppm Cu, with 27ppm Zn.
During 2018, the joint venture drilled
three holes within the T23 Dome,
a priority target within the T20
Exploration Area, at 600m sections to
test the potential of the prospective
NPF contact interpreted from AEM to
occur at shallow depth. Drill results
intersected disseminated copper
mineralisation supporting the potential
of the structural corridor to host further
copper mineralisation.
T20 Exploration Project: ~3.350km2
Area of soil anomalies: ~750km2
Drill core showing coarse grained bornite and chalcopyrite
9
Annual Report & Accounts | 2018 STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2018
Kalahari Metals Limited
On 6 June 2018, Metal Tiger announced that it had
entered into an investment agreement to acquire
up to 50% of Botswanan focused explorer, Kalahari
Metals Limited (“KML”). At the time of the investment,
KML owned 100% of two licences in the Kalahari
Copper Belt situated along strike of Cupric Canyon
Capital’s (exploration) projects (circa 50km) and our
joint venture projects with MOD covering 1,996km2.
In addition, KML had a binding earn-in agreement
with Triprop Holdings (Pty) Limited (“Triprop”) in
relation to five exploration licences covering a
combined area of 2,067km2. KML has a right to earn
up to 80% of Triprop and has the right to purchase
the remaining 20% of Triprop at an independent
valuation. As part of the Stage 1 Earn-in with Triprop,
KML was entitled to earn 51% of Triprop (through
Triprop issuing new shares to KML) if KML completed
US$600,000 of spend in respect of agreed work
programmes and budgets by 25 May 2019. As noted
in “Post Year End Developments”, the Stage 1 Earn-in
requirement has been met and Triprop has exercised
its rights to acquire this interest since the year end.
The initial acquisition resulted in Metal Tiger investing
US$600,000 and issuing 1,188,118 new shares in
Metal Tiger to the shareholders of Triprop for 18% of
the shares in KML previously held by Triprop.
Details of Exploration Licences in the KML Joint Venture
Automated core saw’s commissioning and training
Licence ID
Holder
PL148/2017
PL149/2017
KML
KML
KML
Earn-in
100%
100%
Prospect Metals
1/7/2017
30/6/2020
1/7/2017
30/6/2020
Valid for
Valid from
Valid to
Duration
(years)
Licence Area
(km)
Work Area
Block
3
3
Sub-total:
2
2
2
2
2
Sub-total
Total Area
Eastern
Western
Eastern
998
998
1,996
756
252
103
483
473
2,067
4,063
PL035/2012
Triprop
PL036/2012
Triprop
PL041/2012
Triprop
PL042/2012
Triprop
PL043/2012
Triprop
100%
100%
100%
100%
100%
Base Metal,
Precious Metals
& PGMs
1/4/2018
31/3/2020
1/1/2018
31/12/2019
1/4/2018
31/3/2020
1/4/2018
31/3/2020
1/4/2018
31/3/2020
10
Metal Tiger plc MOD/Metal Tiger - JV total licence holding ~ 11,700km2
Soil anomalies over magnetics
11
Annual Report & Accounts | 2018 STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2018
Core samples at logging facility in Ghanzi
12
In July 2018, KML commenced its Phase 1 exploration
programme for Cu-Ag mineralisation. New Resolution
Geophysics was contracted to conduct airborne high
resolution heliborne magnetic and electromagnetic
surveys (“AEM”) on the prospective Okavango Copper
Project (“OCP”) and Ngami Copper Project (“NCP”). The
surveys covered a total of 16,700 line-km of magnetics and
1,982 line-km of AEM. This phase of work was followed
up with an additional 1,830 line-km of high resolution
magnetics and 1,830 line-km of detailed AEM completed
in December 2018.
Airborne geophysical data has been successfully used
in the Kalahari Copper Belt for targeting the basin wide
NPF/D’Kar contact, the basin-wide REDOX change
from oxidised below to reduced above, near where
copper sulphides potentially precipitate. The NPF/D’Kar
contact undulates, along a NE-SW axis, implying NW-SE
compression and folding (orientation of the Pan African
orogeny). In addition, it can be inferred that a NW-SE
compression has also occurred, resulting in a classic ‘dome
and basin’ fold interference pattern. The superposition
of these two approximately perpendicular folding events
produces domes that are ideal basinal fluid traps. Magnetic
data provide a means for mapping the contact due to
the magnetic susceptibility contrast between D’Kar and
underlying, weakly magnetic, NPF. Marker conductors in the
lower D’Kar can be mapped in 3D using a combination of
inversion methods applied to AEM data.
High resolution magnetic surveys were carried out at a
75m line spacing, providing the necessary detail to map
subtle structure, NNW trending Karoo dyke swarms,
estimate cover thickness and, importantly, distinguish
between magnetic units in the lower D’Kar and weakly
magnetic NPF ultimately providing a detailed lithostructural
map of the geology under Kalahari Group cover.
AEM surveys were flown in two parts. Initially, licence
wide regional surveys were completed at 2km or 4km
spacing to estimate Kalahari cover thickness and to
exclude regions where perched saline water or conductive
cover may limit the effectiveness of the method before
embarking on detailed surveys. Detailed 400m surveys
were then flown over priority areas in both the OCP and
NCP. Processing of AEM data included layered earth
inversions which proved highly successful in mapping out
folded targets where lower D’Kar stratigraphy is preserved,
providing potential trapsites for mineralisation. In addition,
weak conductors associated with the lower D’Kar contact
were effectively mapped from known deposits (Zones 5
and 5N) into the OCP licence area. Results from the AEM
surveys have been used to generate drill targets on both
the OCP and NCP.
On 31 October 2018, the Company elected to invest a
further US$500,000 bringing the Group’s holding up to
34% (from 18%) and agreed a second phase of exploration.
Metal Tiger plc The board of KML was initially of the opinion that it would
have been in a position, following Metal Tiger’s investment,
to test drill new copper targets at the end of Q1 2019. This
has been delayed later into 2019.
Furthermore, Loci Environmental (PTY) Ltd, a Botswanan-
based environmental consultancy, was engaged to prepare
and obtain environmental permitting over both projects.
On 30 November 2018, KML signed an Earn-in Agreement
with Resource Exploration and Development Ltd (“RED”)
to acquire an interest in five recently granted exploration
licences (Figure 2), with a total area of 4,661km2. Since
the year end, KML has entered into a binding agreement
with RED to acquire 100% of Kitlanya (Pty) Ltd (its
100% subsidiary) and has executed a conditional Share
Purchase Agreement which terminates the Earn-in
Agreement and allows for KML to purchase Kitlanya (Pty)
Ltd for US$700,000 to be satisfied by the issue of shares
representing approximately 13.4% of KML as enlarged
by the acquisition. Post completion, the transaction will
value KML at US$5,200,000. The acquisition is conditional
on approval of the change of control of Kitlanya being
granted by the authorities in Botswana and receipt of an
updated letter of good standing for the licences.
Work completed over the Kitlanya ground includes a
compilation of historical exploration data, reprocessing
and interpretation of available geophysical data, and a
short soil sampling programme totalling 3,240 samples.
Results highlight the potential for further ‘dome’ targets on
this licence package.
Major deposits (Cu eqt)
1470951 - 2135390
451873 - 1470950
62102 - 282000
Copper Resource
MOD (70%) MTR (30%) JV
MOD 100%
Cupric Canyon Capital 100%
Kalahari Metals JV with Kitlanya
Kalahari Metals JV with Triprop
Kalahari Metals
Maun
Sehithwa
Boseto
Okavango Copper Project
Kitlanya West
Ngami Copper Project
Zone 5
BOTSWANA
Banana Zone
T3
Kitlanya West
I
I
A
B
M
A
N
Ghanzi
0
N
50km
Figure 2
Current Metal Tiger related and third party licence holdings in the Kalahari Copper Belt. Licences target important positions on the Kalahari Copper Belt basin
margins and strike extensions of known deposits along the ‘central structural corridor’. KML Licence locations include wholly owned and joint venture ground
and have been divided into the following projects (from west to east): Kitlanya West; Ngami Copper Project; Kitlanya East; and Okavango Copper Project.
13
Annual Report & Accounts | 2018 STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2018
THAILAND
The new Minerals Act in Thailand came into effect in
August 2017, but certain provisions of the Act required
interpretation and implementation. Core among these
were the determination of Mineral Deposit Areas (“MDAs”)
within which mining leases can be granted, the creation
of a five year Minerals Management Master Plan, the
appointment of members to the National Board of Mineral
Resource Policy and Administration (“NBMRPA”), and
the making of downstream bureaucratic changes at the
various agencies affected. The Master Plan confirming that
the mining lease applications for the Thai lead-zinc-silver
mines (“Kemco”) are considered MDAs was ratified by the
Thai Cabinet early in 2018 but the entire implementation
process, allowing for the resumption of licence and lease
application processing, was only completed in December
2018. Evidence of bureaucratic functionality in this context
became apparent at the first monthly meeting of the
NBMRPA in January 2019, with the granting of highest
priority applications first.
THAILAND
Kanchanaburi
Lopburi / Nakhon Sawan
Bangkok
Prachinburi
Chanthaburi
Tin Belt
Lead / Zinc Belt
Sukhothai Terrain Volcanic Belt
Loei-Phetchabun Copper / Gold Belt
Mining Licence Application &
Special Prospecting Licence
Application Locations
Phuket
14
In order to minimise costs at the Bangkok office during
this period of government inactivity and uncertainty,
field exploration programmes, environmental work at
the Kemco site and engagement with third parties for
studies necessary for the advancement of mining lease
applications were put on hold. Staff was reduced and
technical activities were limited to those that could
be conducted at the desktop level with data already
accumulated or readily available. These activities included:
• creation of detailed drilling plans aimed at increasing
the resource at the Boh Yai mine at various budget
levels and for alternate land access scenarios using
3D modelled grade shells for the existing resource,
structural interpretations and historical drill core
data coverage;
• modelling of temporal historical Kemco production
from ore extraction to concentrate production
incorporating tonnes, grades, recoveries, reagent
consumption and energy usage for analysis of
variations according to ore type/location and
concentrate type produced;
• spatial trend and correlation analyses for geological
features identified from historical drill core logs and
interpretive cross sections;
• creation of comprehensive Thailand-wide exploration
plans to act as the basis for potential future exploration
programmes in Thailand unrelated to the Kemco
project; and
• performance of due diligence assessments of geological
datasets and economic models for several exploration
projects in Thailand, in the gold and tin spaces.
The Company is very confident about the potential to
increase significantly the resource at the Boh Yai mine
through a modest drill campaign targeting modelled
ore extensions and gaps in the data (Figure 3). The joint
venture partner is currently exploring legal options which
allow the implementation of exploration plans at Boh Yai
before formally restarting the mining licence application
process for which the next step will be holding public
hearings. The Board is in active discussions with our joint
venture partner about renegotiating the joint venture
agreement terms and the Company will update the market
in due course should these discussions bear fruit. At the
same time, Metal Tiger Thailand is exploring downstream
processing options which could potentially have a positive
impact on the economics of the project.
Metal Tiger plc Figure 3
Drilling plan with target
spaces, Boh Yai
Concentrator ball mill
15
Annual Report & Accounts | 2018 STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2018
SPAIN
Logrosán Minerals Limited (“LML” or
“Logrosán Minerals”) is the joint venture
operating company for the Logrosán
Exploration Project (“Logrosán Project”)
and Maria Gold & Antimony Project
(“Maria Project”). It is held 50/50
by Metal Tiger and its joint venture
partner, Mineral Exploration Network
(Finland) Ltd (“MEN”), and has four
exploration concessions and two
exploration licence applications held
through LML’s wholly-owned Spanish
subsidiary Logrosán Minera S.L. as set
out in the table below. The licences
cover all Group C minerals including
Au, Ag, Pb, Sn, W, Pt and Cu.
SPAIN
Madrid
Logrosán/Maria Project
Logrosán - view of the appalachian relief of the working area
16
Metal Tiger plc Licences held by Logrosán Minera S.L.
Asset
Status
Licence Expiry Date
Licence Area
(km2)
Comments
Antonio Caño Exploration Licence
(#10C 10314-00)
Exploration
6 December 2019
37.22
Zorita Exploration Licence
(#10C 10332-00)
San Cristóbal
(#10C 10321-00)
Exploration
18 June 2021
85.08
Exploration
16 June 2019
43.81
“Maria Project” Mari Hernández Permit
(#10313-00)
Exploration
14 November 2019
40.09
Exploration
10 April 2022
28.11
Renewable three times to maximum
of nine years from 2/12/2013
Renewable to maximum nine years
from 18/6/2015
Renewable to maximum nine years
from 10/6/2016
Renewable to maximum nine years
from 31/10/2013
Renewable to maximum nine years
from 10/4/2019
Exploration Licence
Application
n/a
30.72
Exploration Licence Application
stamped 11/9/2017
San Cristóbal Sur
(#10358-00)
Logrosán Norte
(#10C10367-00)
Metal Tiger announced that it had completed the
proposed €500,000 of exploration funding into the
Logrosán Project on 15 March 2016, to earn the 50%
holding in LML. On 31 May 2016, Metal Tiger announced
it had concluded negotiations to include the Maria Gold
and Antimony Project (“Maria” or “Maria Project”) licence
(40.09km2) into the Logrosán Minerals JV. Maria is located
approximately 15km north of the Logrosán Project.
During the 18 months prior to the joint venture commencing,
Metal Tiger’s joint venture partner, MEN, had carried out more
than 40,000 soil samples, hundreds of pan-concentrate
samples, covered thousands of linear kilometres with ground
magnetic survey and assessed electro-magnetic tomography.
The presence of tungsten mineralisation had been confirmed
by soil sampling, outcrop sampling, trenching and historical
drill holes. Gold mineralisation had been indicated by pan-
concentrate sampling which delineated three areas with
anomalous gold.
Prior to concluding the Maria deal, Metal Tiger’s due
diligence Rotary Air Blast (“RAB”) drilling had indicated
that the area has high prospectivity for antimony-gold
style mineralisation; six RAB drill holes had returned
intersections between 1g/t Au and 3.94g/t Au and nine drill
holes with antimony intersections >1% Sb (with grades up
to 2.6% Sb and the largest Sb intersection 4m at 1.2% Sb).
Under the Maria deal, Metal Tiger provided €500,000 over
the balance of 2016 and first quarter of 2017 in exploration
expenditure, split over the Maria and Logrosán Project areas.
On 19 July 2016, Metal Tiger announced that the San
Cristóbal Exploration Licence (43.81km2) certificate had
been received.
Between 24 April 2015 and 12 November 2016, the joint
venture drilled 384 RAB drill holes totalling 6,879m to
an average depth of 17.9m and analysed over 2,500
drill samples, spread across the licence holdings. The
drilling had the purpose of confirming the presence and
indicative scale of sub-surface mineralisation intersections
only, and not for the purposes of Resource definition,
but as a minimal environmental impact alternative
to deep trenching. The drill holes were arranged on
profiles set across the soil geochemistry and ground
magnetic anomalies with the azimuth of each drill hole
perpendicular to the perceived mineralised trend.
During the 2017 spring season, work focused on the
delineation of gold anomalies at the Logrosán licence
group. With the shallow RAB drilling on hold, the field
programme concentrated on soil sample gold analysis,
with infill soil sampling and mapping to laterally delineate
the existing gold anomalies as part of target generation for
a potential deep drill programme planning and costing. A
total of 7,345 samples were assayed for gold comprising
the infill soil samples and analysis of XRF sample pulps
from samples not previously analysed for gold.
This infill sampling helped to delineate a new regional
scale gold anomaly and a new tungsten anomaly at
Logrosán East. The infill soil sampling and gold analysis
effectively joined El Seranillo North and El Seranillo East
into a single, 5km long gold anomaly. The new tungsten
anomaly has been named “W Target 3”, it measures
2.3km long and 0.9km wide, with up to 466ppm W in the
soil, and is located 3km NE and along strike from the La
Dehesa Target deposit which was RAB drilled during 2015.
17
Annual Report & Accounts | 2018 STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2018
It is noteworthy that a large scale, 19km long, arsenic
anomaly coincides with a regional magnetic structure
linking Logrosán South in the southwest of the Project
area to the north of Logrosán East, in the northeast of the
Project area passing through both the existing La Dehesa
Target and the new W Target 3.
Field operations during the autumn of 2017 consisted
of infill soil sampling in the north of Logrosán East (3,117
samples) and systematic sampling from road cuttings across
this anomaly (total of 780m sampled at 5m intervals).
In the autumn of 2018, work at the Logrosán Project
focused on planning a Reconnaissance Drilling Programme
with the objective to show whether mineralisation
continues to depth ahead of deciding next steps. No further
work was conducted at the Maria Project in 2018.
The Reconnaissance Drilling Programme commenced in
December 2018, before the Christmas break, completing
in February 2019. The programme comprised 12 diamond
drill (“DD”) holes, for a total 2,283m, drilled with the
objective of determining the potential extent and tenor
of mineralisation at depth within an initial four broad
mineralised targets qualified at near surface depths by
geochemistry, geophysics, trenching and the previous
RAB drilling. Two of these four targets were selected for
gold, one target for gold and tungsten and one target for
tungsten. Individual DD holes varied between 30m–300m
in depth, with an average of 190m and between 40-50
degrees inclination. The programme utilised a single
Geomachine Oy GM-200 diamond core drilling rig with a
Finnish WL-56 size drilling bit to produce a 39mm diameter
core. Core was geologically logged and photographed in
detail. As this was a reconnaissance drilling programme,
core sample intervals were submitted to accredited ALS
Laboratory (“ALS”) in Seville as whole core. Pulps from
selected high grade samples were re-analysed and ALS
ran their own internal QA/QC. Results received since
the year end have been encouraging and further details
are given in “Post Year End Developments” below.
Reconnaissance Diamond Drill Programme Results
The objective of the Reconnaissance Drill Programme was
to show mineralisation continues to depth at four of eight
specific target areas ahead of deciding next steps for the
Logrosán Project. Details of the various target areas were
originally announced 27 June 2017.
The four broad targets, selected on the basis of existing
work permits, were:
Logrosán East Targets (gold) consisting of a 5km long,
50m–80m wide gold anomaly (formerly El Seranillo North
and El Seranillo East). The current diamond drilling has
18
tested the anomaly at two points (El Serranillo North and
El Serranillo East - approximately 2.5km separation) below
prospective results in surface trenches (up to 1.88g/t Au
and 7.16g/t Au).
In the El Serranillo North target area a total of 22 chip
samples had previously confirmed anomalous gold
background over an area of 0.3km2 ranging up to a
maximum of 4.45g/t Au. Two deep holes (LDD001 and
LDD002) targeted the southern limb of this anomaly with a
single 1m intersection above 1g/t Au, but with four separate
3m-4m wide zones averaging 0.06g/t Au that could
possibly vector to higher mineralisation in the vicinity.
At the El Serranillo East target a single drill hole
LDD009 intersected 1m at 96.2g/t Au in a 1.5m wide
vuggy, oxidised, quartz-carbonate vein, which also
contained traces of the copper oxide malachite.
Previous soil sampling in this area also delineated
anomalous copper (Au-Cu-As soil association).
On a regional scale the Logrosán East anomaly also marks
the eastern most edge of a strontium depletion front
emanating from the San Cristobal intrusion.
San Cristobal granitic intrusion in Logrosán
Metal Tiger plc Logrosán East Targets (for gold) key intersections:
• Hole LDD009 (El Serranillo South)
o 1m at 96.2g/t Au from 54m
• Hole LDD002 (El Serranillo North)
o 1m at 1.65g/t Au from 200m
Zorita Target (previously called W Target 1 / Logrosán
South RAB target) is a 1.2km long by 200m wide soil
tungsten anomaly. Previous RAB drilling, 17 holes (268m),
on two profiles drilled perpendicular to the tungsten
anomaly strike at a 380m separation confirmed near
surface high-grade tungsten mineralisation in the north
and the centre of the target. The anomaly remains open
(untested by drilling) for 700m to the south and for 120m
to the north.
The diamond drilling (totalling three holes) has shown
the high grade tungsten mineralisation continues to at
least 44m down-hole depth (hole LDD011), with narrow
high grade gold mineralisation intersected (hole LDD012)
beneath the Logrosán South arsenic soil anomaly to the
east of the tungsten anomaly.
Zorita Target (for gold and tungsten) key intersections:
• Hole LDD011
o 3m at 0.35% WO3 from 44m, including:
2m at 0.45% WO3 and 0.01% SnO2 from 45m
• Hole LDD012
o 1m at 23.2g/t Au from 191m
o 1m at 9.73g/t Au from 237m
La Dehesa Target (previously called W Target 2) consists of
a 700m long by up to 150m wide soil anomaly orientated
NE-SW. It coincides with a 1.6km long geophysical
structure and three further weaker anomalies associated
with parallel structures.
Previous RAB drilling, 65 holes with average 20m depth
(1,300m in total), returned 8m at WO3 0.32% near surface.
The diamond drilling, totalling six holes between
30m-300m depth, has shown that the high grade tungsten
mineralisation has the potential to extend from surface to
at least 99m down-hole depth (hole LDD004), possibly
past 262m down-hole depth (hole LDD007). Intersections
from four diamond holes show significant potential to
build out a deposit over at least 400m strike length.
La Dehesa Target (for tungsten) key intersections:
• Hole LDD004
o 6m at 0.29% WO3 and 0.05% SnO2 from 61m including:
1m at 0.52% WO3 and 0.08% SnO2 from 61m and
2m at 0.51% WO3 and 0.06% SnO2 from 65m
o 3m at 0.30% WO3 and 0.05% SnO2 from 85m
o 4m at 0.38% WO3 and 0.07% SnO2 from 95m including:
2m at 0.64% WO3 and 0.07% SnO2 from 97m
• Hole LDD007
o 1m at 0.40% WO3 and 0.04% SnO2 from 249m
o 3m at 0.42% WO3 and 0.05% SnO2 from 259m
Location and Region
The Logrosán Project and Maria Project areas are located
approximately three hours’ drive west of Madrid, in a
geologically prospective, under-explored and mining-
friendly jurisdiction in west-central Spain within the province
of Cáceres in the Extremadura autonomous region. The
projects are served by a well-developed and maintained road
network, with good power, water and telecommunications
infrastructure and enjoys the full support of the regional and
local government and administration.
Neighbouring Properties
There are two publicly listed exploration and pre-production
development companies located within the surrounding
region. W Resources Plc’s La Parrilla tungsten mine (49Mt at
0.1% WO3) and mill which is currently under development, is
43km southwest of the project areas and Berkeley Energia’s
Gambuta uranium deposit is 30km north.
Summary
Work during 2018 and Q1 2019 centred on a short
Reconnaissance Drilling Programme designed to support
a decision on further work at the Logrosán tungsten and
gold project. The work was conducted in a cost-effective
manner, utilising spare drill rig capacity and with direct
staffing by our joint venture partner, MEN.
Metal Tiger believes that the drill findings have added
significantly to the value of the project with five high
grade tungsten intersections averaging 3m at 0.3% WO3,
plus associated tin credits, confirmed at depth. As a
comparison, commercial tungsten deposits typically grade
from 0.1% WO3.
Drilling also yielded three high grade, one metre wide,
gold intersections (ranging between 9.7g/t and 96.2g/t
Au), across two separate targets which have delineated
subsurface gold for the first time in the Logrosán area.
Metal Tiger will be considering the next steps for the
project with its JV partner and will provide further updates
during the course of 2019.
19
Annual Report & Accounts | 2018
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2018
Direct Equities
Key events during 2018
During the period 1 January to 31 December 2018, the Direct
Equities Division increased its net assets to £12,241,000
from £9,345,000 but reported a loss of £12,946,000
before finance and administrative costs, primarily driven by
unrealised losses relating to its listed equity investments in
MOD Resources Limited and Thor Mining plc. The unrealised
losses were the result of deteriorating macro-economic
conditions for metals markets primarily the result of the
US-China trade war and a general lack of investor interest in
small cap mining companies.
The Direct Equities Division continues to invest in high
potential mining exploration and development companies
during these difficult market conditions for junior
miners. The focus is to invest in mining companies that
are significantly undervalued by the market and where
there is substantial upside potential through exploration
success and/or development of a mining project towards
commercial production.
Equity investments are generally comprised of companies
that are at exploration, pre-feasibility and definitive
feasibility study stage. No mining companies in the
investment portfolio are currently at production stage.
The portfolio is therefore considered high risk as the future
value of investments is often dependent on financing and/
or exploration success.
The division acquired a significant interest in MOD
shares during the year as a result of the sale of the MOD
T3 interests outlined above. During the period from
18 July 2018 to 31 December 2018 the MOD share
price declined from A$0.48 to A$0.25, a decline of
approximately 48%, which has had a significant impact on
the value of Metal Tiger’s investment in MOD, reducing
the value of the listed equity stake by £7,597,000 and
offsetting the gain of £12,530,000 recorded on sale.
Six non-core minority equity investments were partially
or completely exited in 2018 raising gross proceeds of
£4million. The majority of disposal proceeds related to
the sale of an activist minority investment in ASX-listed
Kingsgate Consolidated Limited in January 2018, which
realised gross proceeds of £3,504,000 and realised a
gross loss of £168,000 on original investment cost. A
reported loss of £1,136,000 has been recorded in the
2018 results from the Kingsgate disposal reflecting the
unwinding of the gain against market value of £830,000
in 2017 recorded at 31 December 2017 and the loss on
sale, plus associated costs, of £306,000 in 2018.
Along with the acquisition of additional stock in MOD,
three new listed minority equity investments were
made in 2018 at a total investment cost of £503,000.
Two new minority private equity investments were
made in 2018 at a total investment cost of £562,000.
In addition, an investment of US$150,000, shown in the
financial statements as a non-current investment within
the division, was made to acquire a 10% interest in Sita
Capital Partners LLP, a UK based investment advisor that
is seeking to raise a private equity fund to invest in mining
companies. Metal Tiger has been granted beneficial co-
investment rights.
Outlook
The majority of Metal Tiger’s investment portfolio is
invested in MOD Resources Limited. MOD completed
a definitive feasibility study on the T3 Copper Project at
the end of March 2019 and is currently considering all
strategic and financing options in order to advance the
project to commercial production.
Metal Tiger also has a number of Direct Equity Division
investments in early stage, exploration-focused mining
companies. These investments are higher risk and may
result in substantial gains or a significant loss of value.
Many of these companies are actively pursuing exploration
drilling campaigns and we look forward to reporting
significant results during the course of 2019.
Soil sample processing at core shed in Ghanzi
20
Metal Tiger plc Summary of listed investments held at 31 December 2018
Investment
Listing
Description
No. of securities held
Value at year end £
MOD Resources Limited
LSE/ASX
T3 Copper Project
and exploration
Thor Mining plc
AIM/ASX
Molyhil tungsten project
31,064,220 ordinary shares
40,673,566 options
(nil exercise price, expiry 15/11/2021)
154,167 warrants
(A$0.6, expiry 15/4/2019)
80,100,000 ordinary shares
10,000,000 warrants
(5p, expiry 29/1/2020)
4,288,000
5,615,000
-
1,041,000
13,000
Greatland Gold plc
AIM
Gold exploration
14,700,000 ordinary shares
266,000
Sable Resources Limited
TSX-V
Gold and
silver exploration
Arkle Resources plc (was
Connemara Mining plc)
AIM
Zinc exploration
Summary of unlisted investments held at 31 December 2018
650,000 ordinary shares
4,869,952 ordinary shares
4,819,277 warrants
(7p, expiry 9/3/2020)
75,000
75,000
-
Investment
Listing
Description
No. of securities held
Value at year end £
Pan Asia Metals Limited
Private
Lithium and tungsten
exploration
7,627,447 ordinary shares
Veta Resources Inc.
Private
Gold exploration
1,666,667 ordinary shares
Tally Limited
(was Lionsgold Limited)
Private
Gold currency
3,840,909 ordinary shares
9,090,909 warrants
(2.2p, expiry 29/1/19)
460,000
144,000
102,000
-
Exploration base and core logging facility in Ghanzi
21
Annual Report & Accounts | 2018 STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2018
Investment Policy
Proposed investments to be made by the Group
may be: either quoted or unquoted; made by direct
acquisition or through farm-ins; may be in companies,
partnerships, joint ventures; or direct interests in
mining projects. Target investments will generally
be involved in projects in the exploration and/or
development stage and/or producing mines.
The Group’s Direct Projects Division currently remains
focused on projects located in South East Asia,
Australia, Africa and Europe but will also consider
investments in other geographical regions. The Directors
identify and assess potential investment targets and,
where they believe further investigation is required,
appoint appropriately qualified advisors to assist.
The Group carries out a comprehensive and thorough
project review process in which all material aspects of any
potential investment are subject to appropriate due diligence.
The Group’s Direct Equities Division invests in both
strategic and on-market investments. In considering
acquisitions and hold/sell decisions the Group considers
the commodity price outlook, the track record of
management, the ability for the Metal Tiger management
team to “add value” through corporate governance,
financial and technical expertise, the potential to increase
substantially the value of any mining asset through
exploration and development regardless of commodity
price performance, and the ability to exist. Investments are
made in low and medium risk geographic jurisdictions.
The Company intends to deliver shareholder returns
principally through capital growth rather than income
distribution via dividends and actively manages its
investment portfolio to achieve this aim. Given the nature
of the investing policy, the Company does not intend to
make regular periodic disclosures or calculations of net
asset value. The Board considers that, in due course, the
Company may require additional funding as investments
are made and new investment opportunities arise.
Administrative Expenses
Administrative costs in the year can fluctuate significantly
depending on the level of activity as regards the work
carried out on acquisitions and disposals, in managing
Direct Project investments, in our subsidiaries on Direct
Project operational costs and on the level of professional
costs, principally legal costs, involved with project
acquisition and with direct equity purchases and sales.
Direct Project operational costs are included within
administrative costs and expensed unless they comply with
the Group’s capitalisation policy as set out in note 2 to the
financial statements.
The administrative costs for the year have also been affected
by the Company’s VAT position. During the year HMRC
22
challenged the approach the Company has been using
in respect of its partial exemption calculations for VAT
recovery. We have opposed, and are continuing to oppose,
HMRC’s position on this. Whilst we would hope for a positive
outcome, in view of the uncertainty we have fully provided
against VAT incurred in the year of £207,000 and against
£150,000 of claims in respect of past years. Of the total
charge £140,000 relates to costs incurred on the T3 MOD
joint venture and has been included within the calculation of
the profit on the sale of those interests, with £216,000 being
included as an increase in administrative expenses.
After taking VAT provisions into account, administrative
expense in 2018 amounted to £3,431,000 compared to
£4,783,000 in 2017, a decrease of 39%.
The reduction in expenses principally arose as a result of
the reduction in direct costs relating to the Group’s Thai
operations (£771,000 reduction in total, of which £144,000
related to staff costs) for the reasons more fully explained
on page 14 and the absence of expenditure on the
proposed IPO of the Thai assets which in 2017 amounted
to £712,000. There was an increase in remuneration costs
in the year as set out in note 6 to the financial statements
reflecting changes in the board and responsibilities but this
was primarily offset by a reduction in other administrative
expenses including external legal and professional costs.
Finance and Working Capital
During 2018, Metal Tiger received a net £6,547,000
through placings undertaken with third-party investors
and the exercise of warrants and options by Directors and
others (2017: £7,642,000). £3,967,000 (2017: £5,402,000)
was raised from the disposal of Direct Equities investments.
Of the total cash generated from operating activities,
principally overhead costs including expensed exploration
costs relating to Thailand, consumed £3,652,000
(2017: £3,889,000), £946,000 was incurred in the
disposal of the T3 assets in Botswana, £3,466,000
(2017: £5,939,000) on new Direct Equity Division
investments and £3,438,000 (2017: £1,750,000)
on funding Direct Projects Division operations.
POST YEAR END DEVELOPMENTS
Direct Projects
Botswana – Joint venture with MOD
On 7 May 2019, the joint venture announced planned
work for the T20 Exploration Project with drilling to start in
May 2019, with nine wide spaced reverse circulation (“RC”)
holes planned and four diamond drill holes, following up
shallow copper and silver mineralisation intersected in
three previous holes. Where the proposed T23 Prospect
re-drilling is successful, it is planned to extend the drilling
eastwards to the T4 West target approximately 7km east of
T23. T4 West shows similar geophysical signatures to the
Metal Tiger plc Magnetic interpretation of the KML Okavango Copper Project
High resolution heliborne magnetic data was collected at a 75m line spacing over priority portions of the OCP. The data was filtered, modelled
and inverted in 3D to extract key information for lithological and structural interpretation. (A) 3D inversion results highlighting magnetic sources;
(B) magnetic lineaments overlain on Euler depth solutions; (C) lithological and structural interpretation of high resolution survey areas.
23
Annual Report & Accounts | 2018 STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2018
Interpretation of Airborne Electromagnetic geophysics for the KML Ngami Copper Project
Detailed AEM data collected at a
400m line spacing and processed
using layered earth inversions
highlight compelling DKF-NPF
targets in fold hinge zones. (Above)
3D view of the modelled DKF-NPF
contact, looking NE, 3x vertical
exaggeration. (Left) Sections
through Layered earth model with
interpreted contact, structure,
Kalahari cover (KG) thickness &
conductive DKF highlighted, 3x
vertical exaggeration. Proposed
follow-up drill positions highlighted.
24
Metal Tiger plc T4 Copper Prospect and is located intermediately between
the T23 and T4 prospects.
A programme for proposed drilling at the A4 Dome, which
is expected to start during the second half of 2019, will
seek to test for the widespread NPF contact mineralisation
below the A4 Dome and comprises:
• six shallow RC holes to follow up shallow vein hosted
mineralisation in hole MO-A4-019D (announced on
20 December 2018); and
• one deep DD hole to follow up the high-grade vein
hosted mineralisation intersected in holes MO-A4-003D
and MO-A4-008D (announced on 20 December 2018).
If successful, it is expected that a further drilling programme
would follow on with the objective of delineating a maiden
JORC Resource on the A4 Dome. Given the proximity
to T3, it is envisaged that such a JORC Resource could
potentially feed into the planned T3 Processing Plant.
Botswana – Kalahari Metals Limited
On 11 March 2019, Metal Tiger exercised its option to
acquire a further 16% of the voting rights and ordinary
share capital in KML for US$500,000 bringing its total
investment to US$1.6million and increasing its holding
in the company to 50%. As announced on 23 May 2019,
KML exercised its rights to acquire 51% of Triprop. This is
subject to receiving change of control approval from the
Botswanan Government. Upon receiving this approval,
KML and Triprop will enter into a joint venture agreement
which, inter alia, will give KML the right to appoint two of
the four directors to the Triprop Board, one of whom will
be the Chairman.
Also on 23 May 2018, it was announced that, following
the approval of the Environmental Management Plan for
the Ngami Copper Project by the Botswana Department
of Environmental Affairs, diamond drilling can now
commence with mobilisation scheduled for the first week
of June 2019. This first phase of diamond drilling, with an
initial 2,100m planned, will test priority fold hinge targets
at NCP.
Spain
On 25 April 2019, the results of diamond drilling at the
Logrosán gold tungsten project in Spain completed during
the winter work programme of 2018/2019 confirmed
high grade tungsten intersections and significant gold
intersections at depth. We consider that the findings have
added significantly to the value of the project with five high
grade tungsten intersections averaging 3m at 0.3% WO3,
plus associated tin credits, confirmed at depth. Drilling also
yielded three high grade, one metre wide, gold intersections
(ranging between 9.7g/t and 96.2g/t Au), across two
separate targets, delineating subsurface gold for the first
time in the Logrosán area. We are currently considering the
next steps for the project with our JV partner.
New opportunity pipeline
Opportunities continue to grow and Metal Tiger is
considering ways to capture value from pipeline
opportunities within Metal Tiger and also from
third parties.
Direct Equities
On 28 March 2019, MOD Resources announced the results
of the completed feasibility for the T3 Copper Project
which includes a proposed 11.5-year open pit mine, 3Mt per
annum conventional processing plant and all associated
infrastructure. The feasibility study has demonstrated the
opportunity to develop a copper mine that is expected to
generate revenue of US$2.3billion at a margin of over 47%
across the 11.5 year mine life using a long-term consensus
copper price of US$3.08/lb. Over the life of the mine,
average all-in sustaining costs (“AISC”) are expected to be in
the lowest quartile of the cost curve at a very competitive
US$1.56/lb of copper produced, after silver credits. The
current estimated direct and indirect capital cost for the
establishment of the mine, the construction of the process
plant and associated infrastructure is US$142million
(excluding mining pre-strip costs).
In Q1 2019 the value of the listed minority equity stake in
MOD recovered in value as a result of an indicative offer
from Sandfire Resources NL at A$0.38 per share.
Three minority equity investments have been made
subsequent to the year end in Barkerville Gold Mines
Ltd. (£124,000 investment cost), iMetal Resources Inc.
(£54,000 investment cost) and Aurelius Minerals Inc.
(£57,000 investment cost), all gold exploration companies
operating in Canada.
ACCOUNTING TREATMENT
Given the nature of our investments, the tendency is for
investors to look at the Group’s net assets and compare
this to market capitalisation. For Metal Tiger this simplistic
valuation metric does not work as the Group is focused
on investment in major resource projects where the value
of an interest can increase very rapidly with successful
ground exploration or corporate developments.
Where a project or investment has been made to acquire
commercially valuable interests, or where the Group has
acquired valuable project data and strategic positioning
in exploration licences, mining licences and licence
applications, then the costs of investment will be capitalised
in the Statement of Financial Position at the period end.
Shareholders should note therefore that at present the
published net asset position of the Group will largely
comprise the working capital representing predominantly
cash, investments in joint ventures and associates and
liquid tradeable resource shares. Metal Tiger carries no
material debt or trade creditors.
25
Annual Report & Accounts | 2018 STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2018
KEY PERFORMANCE INDICATORS
The key performance indicators are set out below:
31 December
2018
31 December
2017
Change
%
Net asset value
£18,951,000
£15,443,000
+23%
Net asset value – fully
diluted per share1
1.40p
1.33p
+6%
Closing share price
1.25p
2.33p
-46%
Share price premium/
(discount) to net asset
value – fully diluted
(11)%
75%
-114%
Market capitalisation
£16,874,000
£25,326,000
-335%
1 Fully diluted net asset value is calculated on the aggregate number of
shares in issue at the year end and the number of warrants and options
in the money at the year end. There were no warrants or options in the
money at the year end (2017: 32,199,000 and 43,780,000 respectively).
PRINCIPAL RISKS AND UNCERTAINTIES
The main business risk is considered to be investment risk.
The Company faces external risks which are those that can
materially impact or influence the investment environment
within which the Company operates and can include
changes in commodity prices and the numerous factors
which can influence those changes, including economic
recession and investor sentiment.
The Company’s Direct Projects are located in jurisdictions
other than the UK and therefore carry with them country
risk, regulatory/permitting risk and environmental risk.
Direct Project investments tend to be at different stages of
development and each stage within the mining exploration
and development cycle can carry its own risks. These
risks are mitigated by the Metal Tiger Board, Executive
Board, senior management and where needed consultants
actively working as the operators of projects.
It should be noted that the Company does not operate its
Direct Projects on a day-to-day basis and whilst the Board
looks to structure investments in a format in which Metal
Tiger’s senior management and the Board can influence,
obtain high level oversight (often at board level) and use
legal agreements to provide control mechanisms (often
negative control) to protect the Company’s investments,
there is a risk that the operator does not meet deadlines
or budgets, fails to propose or pursue the appropriate
strategy, or does not provide accurate or sufficient
information to Metal Tiger. There is always the risk that an
operator does not adhere to the legal agreements in place.
The Company’s Direct Equities Division is exposed to
interest rate changes, liquidity risk and volatility particularly
in Australia, the UK and Canada.
The Directors intend to mitigate risk by carrying out
a comprehensive and thorough project review of any
potential investment in which all material aspects will be
subject to rigorous due diligence. The Directors believe
that the Company has sufficient cash resources to pursue
its investment strategy.
GOING CONCERN
As disclosed in note 2, after making enquiries, the
Directors have a reasonable expectation that the Company
will have adequate resources to continue in operational
existence for the foreseeable future. For this reason, they
continue to adopt the going concern basis in preparing
the financial statements.
On behalf of the Board
Michael McNeilly
Chief Executive Officer
30 May 2019
26
Metal Tiger plc CHAIRMAN’S CORPORATE GOVERNANCE STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2018
In September 2018, the Company adopted the 2018 Quoted Companies Alliance Corporate Governance Code (the “QCA
Code”) in line with the London Stock Exchange’s changes to the AIM Rules requiring all AIM quoted companies to adopt and
comply with a recognised corporate governance code and to explain how it complies with that code or, where it departs
from its chosen corporate governance code, to explain the reasons for so doing.
The Board is fully committed to a high standard of corporate governance based on practices which are proportional to the
size, risks and operation of the business. In adopting the QCA Code, the Board recognises its principles which seek to focus
on the creation of medium to long term value for shareholders without stifling the entrepreneurial spirit in which small to
medium sized companies, such as Metal Tiger, have been created.
In this section of the Report and Accounts we detail the approach the Board takes to corporate governance and set out
how the Company complies with the majority of principles within the QCA Code. It also explains where we have decided
that the recommendations in the Code in relation to evaluating board performance are not appropriate to our size and
operations at present.
My role as Chairman is to provide leadership of the Board and ensure its effectiveness on all aspects of its remit to maintain
control of the Group. I am also responsible for the implementation and practice of sound corporate governance. As an
independent non-executive director, I maintain an adequate degree of separation from the day-to-day management of the
Company in performing that role.
In the spirit of the QCA Code it is the Board’s job to ensure that the Group is managed for the long term benefit of all
shareholders and other stakeholders with effective and efficient decision-making. Corporate governance is an important part
of that job, reducing risk and adding value to the Group. The Board will continue to monitor the governance framework of
the Group as it grows.
Charles Hall
Chairman
30 May 2019
Vein hosted Cu mineralisation – mainly chalcopyrite (T23, A4, T3 & A1)
27
Annual Report & Accounts | 2018 BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
FOR THE YEAR ENDED 31 DECEMBER 2018
BOARD OF DIRECTORS
The Company supports the concept of an effective Board
leading and controlling the Group. The Board is responsible
for approving Group policy and strategy. It meets regularly
and has a schedule of matters specifically reserved to it for
decision. Management supplies the Board with appropriate
and timely information and the Directors are free to
seek any further information they consider necessary.
All Directors have access to advice from the Company
Secretary and independent professionals at the Company’s
expense. Training is available for new Directors and other
Directors as necessary. Given the size of the Board,
there is no separate Nomination Committee. All Director
appointments are approved by the Board as a whole.
The Board has a formal schedule of matters reserved to it
and these include:
• the approval of financial statements, dividends and
significant changes in accounting practices;
• Board membership and powers including the
appointment and removal of Board members,
determining the terms of reference of the Board and
establishing the overall control framework;
• Stock Exchange related issues including the approval of
the Company’s announcements and communications
with the shareholders, the NOMAD and the
Stock Exchange;
• senior management and subsidiary Board
appointments and remuneration, contracts and the
grant of share options;
• key commercial matters;
• risk assessment;
• financial matters including the approval of the budget
and financial plans, changes to the Group’s capital
structure, the Group’s business strategy, acquisitions
and disposals of businesses and investments and capital
expenditure; and
• other matters including health and safety policy,
insurance and legal compliance.
Other matters are delegated to the Executive Directors
who regularly update and consult with the Board on
matters arising and decisions to be taken, fully utilising the
in-depth experience of Board members on such matters.
Renumeration of Executive Directors is decided by
the Remuneration Committee as detailed below. The
remuneration of Non-Executive Directors is determined by
the Board as a whole. In setting remuneration levels, the
Company seeks to provide appropriate reward for the skill
and time commitment required so as to retain the right
calibre of director at a cost to the Company which reflects
current market rates. Details of Directors’ fees and of
payments made for professional services rendered are set
out in note 6 to the financial statements.
The current Board of Directors with biographies is set out
on pages 29 and 30.
Charles Hall is the Non-Executive Chairman and his role
is described in the Chairman’s Corporate Governance
Statement above.
Michael McNeilly is Chief Executive Officer. The role of
the Chief Executive Officer is the strategic development
of the Group and for communicating this clearly to the
Board and, once approved by the Board, for implementing
it. In addition, the Chief Executive Officer is responsible
for overseeing the management of the Group and its
executive management.
Mark Potter is Chief Investment Officer. The Chief
Investment Officer reports to the Board of Metal Tiger and
serves as the senior investment executive, working closely
with the Chief Executive Officer having responsibility
for managing the Group’s investments. The Chief
Investment Officer is responsible for sourcing and securing
investments as well as monitoring and managing the
investment pipeline, managing the investment programme
and playing an integral role in other executive functions
related to the Group’s strategic development.
Terry Grammer and Neville Bergin are Non-Executive
Directors and Neville Bergin is considered to be the senior
independent Director.
Attendance at Board meetings during the year ended
31 December 2018 was as follows:
Director
Charles Hall
Terry Grammer
Michael McNeilly
Mark Potter
Neville Bergin
Geoffrey McIntyre
Alastair Middleton
Keith Springall
Max number
of meetings
Actual
attendance
38
38
38
38
31
6
19
31
38
37
38
38
31
6
15
27
28
Metal Tiger plc DIRECTORS’ BIOGRAPHIES
Charles Hall - Non-Executive Chairman
Charles is an experienced International Banker with over
30 years with HSBC in a variety of finance and insurance
roles. His last position was as CEO and MD HSBC Private
Bank (Luxembourg) S.A. He has had significant overseas
senior management experience as well as that of running
complex businesses. His prime focus has been on
strategy and corporate restructuring with the emphasis
on re-focusing businesses on their core revenue streams.
Charles holds a BA (Hons) from the University of Sussex, is
an Associate of the Hong Kong Institute of Bankers and is
a Fellow of the Royal Geographical Society.
Michael McNeilly - Chief Executive Officer
Michael is an experienced corporate financier having
advised several private, Main Market listed, AIM quoted
and NEX (formerly ISDX) listed companies on a variety of
corporate transactions during his tenure at Arden Partners
(AIM:ARDN) and Allenby Capital respectively. Metal Tiger
plc (formerly Brady plc) was one of Michael’s clients whilst
at Allenby Capital.
Michael was appointed as a Non-Executive Director of
Connemara Mining Company plc (now Arkle Resources
plc) in February 2018, and was also previously a director
of Greatland Gold plc, as well as a Corporate Executive at
Coinsilium (NEX:COIN) where he worked with early stage
blockchain focused start-ups providing corporate finance
and strategy advice. Prior to his career in corporate finance,
he worked at Simmons & Simmons and PartnerRe and
started two start-ups. Michael studied biology at Imperial
College London and has BA in Economics from the
American University of Paris. Michael is fluent in French.
Michael is a nominated director of Metal Tiger on the
board of MOD Resources Limited.
AUDIT COMMITTEE
The Audit Committee, which comprises two Non-
Executive Directors, Charles Hall and Mark Potter (to 1 July
2018) and Terry Grammer (from that date), is responsible
for ensuring that the financial performance of the Group
is properly monitored and reported upon and that any
such reports are understood by the Board. The Committee
meets at least twice each year to review the published
financial information, the effectiveness of external audit,
and internal financial controls. The terms of reference of
the Audit Committee are given on the Company’s website.
The Company’s external auditor attend the Audit
Committee to present their findings on the audit and to
provide a direct line of communication with the Directors.
Attendance at Audit Committee meetings during the year
ended 31 December 2018 was as follows:
Director
Charles Hall
Mark Potter
Terry Grammer
Max number
of meetings
Actual
attendance
2
2
-
2
2
-
REMUNERATION COMMITTEE
The remuneration of the Executive Directors is fixed by
the Remuneration Committee which comprises two
Non-Executive Directors, Charles Hall and Mark Potter
(to 1 July 2018) and Terry Grammer (from that date). The
Remuneration Committee is responsible for reviewing and
determining Company policy on executive remuneration
and the allocation of long term incentives to executives and
employees. The full terms of reference of the Remuneration
Committee are given on the Company’s website.
Attendance at Remuneration Committee meetings during
the year ended 31 December 2018 was as follows:
Director
Charles Hall
Mark Potter
Terry Grammer
Max number
of meeting
Actual
attendance
5
1
4
5
1
4
29
Annual Report & Accounts | 2018 BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
FOR THE YEAR ENDED 31 DECEMBER 2018
Mark Potter - Chief Investment Officer
Terry Grammer - Non-Executive Director
Mark is the founder and a partner of Sita Capital Partners
LLP, an investment management and advisory firm
specialising in investments in the mining industry. He was
formerly a Director and Chief Investment Officer of Anglo
Pacific Group, a London listed natural resources royalty
company, where he successfully led a turnaround of the
business through acquisitions, disposals of non-core assets
and successful equity and debt fundraisings.
Prior to Anglo Pacific, Mark was a founding member
and investment principal for Audley Capital Advisors
LLP, a London based activist hedge fund, where he
was responsible for managing all natural resources
investments. Mark worked on several landmark deals in
the mining sector including the successful distressed
investment and turnaround of Western Coal Corp. and its
Can$3.3billion sale to Walter Energy Inc.
When working for Audley Capital, Mark invested over
US$300million during the period 2005 to 2012 in the
mining sector realising proceeds of over US$900million
and generating profits in excess of US$600million. The
Audley European Opportunities Fund was nominated by
Eurohedge as a top performing hedge fund in the event-
driven space for 2006, 2007 and 2010.
Prior to Audley Capital, Mark worked in corporate finance
for Salomon Smith Barney (Citigroup) and Dawnay, Day,
a private equity and corporate finance advisory boutique,
and completed over US$2billion of M&A, equity and debt
transactions. Mark graduated with an MA degree from
Trinity College, University of Cambridge.
Mark is a nominated director of Metal Tiger on the board
of Kalahari Metals Limited.
Terry is an award-winning geologist with over 40 years’
experience in mining and mineral exploration with
extensive experience in Australia, Africa, South East Asia
and New Zealand and has been involved in numerous
ASX listed companies that have achieved dramatic growth.
As a geologist, Terry discovered the Cosmos Nickel
deposit for ASX listed Jubilee Mines NL which went on
to be an ASX Top 200 company and for which Terry was
awarded the AMEC (Association of Mining & Exploration
Companies) Joint Prospector of the Year in 2000. Terry
was instrumental in the listing of Western Areas NL
(ASX:WSA) in 2000 and served as exploration manager
from 2000 to 2004 in the company which became an ASX
Top 200 company. Terry was chairman of South Boulder
Mines (ASX:STB) from 2008 to 2013 which grew to be
an ASX Top 300 company. From 2010 to 2015, Terry was
a director of Sirius Resources NL (ASX:SIR) and helped
to guide the company through the discovery, feasibility
and development funding of the Nova nickel and copper
deposits in Western Australia, that saw the company’s
share price dramatically rise from A$0.05 in July 2012 to
a peak above A$5 per share in early 2013 and become an
ASX Top 200 company.
Terry is a nominated director of Metal Tiger on the board
of Kalahari Metals Limited.
Neville Bergin - Non-Executive Director
Neville is a mining engineer with almost four decades
of accumulated experience in the mining industry. He
has had exposure to a range of commodities and both
underground and open pit operational experience. His
broad experience base encompasses many operational
and executive roles and five years’ experience as a
non-executive director of both ASX listed and unlisted
companies including Northern Star Resources Limited.
Neville was previously Vice President of Gold Fields
Australia Pty Ltd where he was in charge of operational
management of two mines.
Neville has extensive experience in technical due diligence
having undertaken this type of investigation for several past
employers. He is also well versed in study management
having managed several feasibility studies. He has a
BSc from the Camborne School of Mines in the UK and
currently runs his own mining consultancy business.
30
Metal Tiger plc COMPLIANCE WITH THE QCA CODE OF PRACTICE
FOR THE YEAR ENDED 31 DECEMBER 2018
The sections below set out the requirements of the Code
and how the Company complies with them.
Principle 1: Establish a strategy and business model
which promotes long-term value for shareholders.
Metal Tiger’s mission is to deliver a high return for
shareholders by investing in significantly undervalued
and/or highly prospective opportunities in the mineral
exploration and development sector timed to coincide,
where possible, with a cyclical recovery in the exploration
and mining markets.
The details of our strategy and the key challenges for the
Group are set out in the Strategic Report.
Principle 2: Seek to understand and meet
shareholder needs and expectations.
Shareholder engagement is the joint responsibility of the
Chairman and the Chief Executive Officer.
The Company is committed to listening to, and
communicating openly with, its shareholders to ensure that
its strategy, business model and performance are clearly
understood. Significant developments are disseminated
through Stock Exchange announcements and regular
updates of the Company website. The AGM is a forum for
shareholders to engage in dialogue with the Board. The
results of the AGM will be published via Stock Exchange
announcements and on the Company’s website.
Principle 3: Take into account wider stakeholder
and social responsibilities and their implications for
long-term success.
Metal Tiger is committed to conducting its business in an
efficient and responsible manner, in line with current best
practice guidelines for the mining and mineral exploration
sectors and international investment. The Company
integrates environmental, social and health and safety
considerations to maintain its “social licence to operate” in
all its investing activities.
For the Company’s Direct Projects Division, Metal Tiger
has adopted and seeks alignment with the best practices
and principles of e3 Plus: A Framework for Responsible
Exploration as set out by the Prospectors and Developers
Association of Canada and the International Council on
Mining and Metals Sustainable Development Framework
(the ICMM 10 Principles).
Metal Tiger’s management maintains a close dialogue with
local communities via its joint venture partners. Where
issues are raised, the Board takes the matters seriously and,
where appropriate, steps are taken to ensure that these are
integrated into the Company’s strategy.
Principle 4: Embed effective risk management,
considering both opportunities and threats,
throughout the organisation.
The Board reviews the risks facing the business as part
of the operational review at each Board meeting.
Investment risk, as regards acquiring, holding or selling
investments, is carried out in line with the Investment
Policy described in the Strategic Review and the
Investment Policy itself is reviewed on an on-going basis
as market conditions change.
The Company has a system of financial controls and
reporting procedures in place which are considered to be
appropriate given the size and structure of the Group and
the nature of risks associated with the Group’s assets. Key
procedures include:
• due diligence on new acquisitions;
• Board level liaison with management of major investees
and joint venture partners including, where appropriate,
board representation;
• monthly management account reporting;
• daily review of investments and market risk with
monthly reporting to the Board;
• regular cashflow re-forecasting as circumstances
change; and
• involvement of the Executive Directors in the day-to-
day operations of the Company and its subsidiaries.
Principle 5: Maintain the board as a well-functioning,
balanced team led by the chair.
The role of the Chairman in ensuring that the Board is
functioning appropriately is described in the Chairman’s
Statement above. The Board currently comprises two
Executive Directors and three Non-Executives (Charles
Hall, Terry Grammer and Neville Bergin) led by the
Chairman. Day-to-day operational control rests with the
Chief Executive Officer, Michael McNeilly, and the Chief
Investment Officer, Mark Potter. Charles Hall and Neville
Bergin are considered to be the independent Non-
Executive directors in terms of the QCA Code.
Executive Directors are full time and Non-Executive
Directors are expected to attend all Board meetings and
be available to provide advice to the executive Board
members whenever necessary. Details of attendance at
Board and committee meetings are given above.
31
Annual Report & Accounts | 2018 COMPLIANCE WITH THE QCA CODE OF PRACTICE
FOR THE YEAR ENDED 31 DECEMBER 2018
Principle 6: Ensure that between them the
directors have the necessary up-to-date
experience, skills and capabilities.
Principle 9: Maintain governance structures and
processes that are fit for purpose and support
good decision-making by the board.
The details of the roles and responsibilities of the Board
are given under “Board of Directors and Committees
of the Board” above together with the corporate
governance structures which the Group has in place.
The composition of the Board, its committees, and the
governance structures in general are kept under review by
the Board, informed by its advisors, and will be updated as
appropriate as the Group evolves.
Principle 10: Communicate how the company is
governed and is performing by maintaining a dialogue
with shareholders and other relevant stakeholders.
The Company’s approach to communication with
shareholders and others is set out under Principles 2 and
3 above.
The biographies of the members of the Board are given on
pages 29 and 30. The Board believes that the members
have a wide experience of the markets in which the Group
operates and the skills necessary to enable the Company
to carry out its strategy.
Where appropriate the Board appoints advisors to assist it
in carrying out this strategy including geologists, surveyors,
mining experts, corporate brokers, accountants and
lawyers. The Company also ensures it is in regular contact
with its nominated advisors, Strand Hanson Limited. The
Company Secretary provides advice and guidance, as
required, to the Board on regulatory matters, assisted by
the Company’s lawyers.
Principle 7: Evaluate board performance
based on clear and relevant objectives,
seeking continuous improvement.
Metal Tiger’s Board is completely focused on
implementing the Company’s strategy. However, given
the size and nature of Metal Tiger, the Board does not
consider it appropriate to have a formal performance
evaluation procedure in place. The Board will closely
monitor the situation as required.
Principle 8: Promote a corporate culture that
is based on ethical values and behaviours.
Careful attention is given to ensure that all exploration
activity within the Company’s investments is performed in
an environmentally responsible manner and abides by all
relevant mining and environmental acts. Metal Tiger takes
a conscientious role in all its operations and is aware of its
social responsibility and its environmental duty.
Both the engagement with local communities and the
performance of all activities in an environmentally and
socially responsible way are closely monitored by the
Board and ensure that ethical values and behaviours are
recognised.
The Company has adopted a comprehensive anti-
corruption and anti-bribery policy to ensure compliance
with the UK Bribery Act 2010.
The size of the Group makes it practical for the Executive
Directors to have day-to-day contact with all members of
staff and to ensure that they abide by the Group’s policies.
The Board as a whole oversees the role of the Executive
Directors in these matters.
32
Metal Tiger plc REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 31 DECEMBER 2018
The Directors present their report together with the
audited financial statements for the year ended
31 December 2018.
A review of the business and principal risks and
uncertainties has been included in the Strategic Report.
DIVIDENDS
No interim dividend was paid (2017: £none) and the
Directors do not propose a final dividend (2017: £none) for
the 12 months ended 31 December 2018.
DIRECTORS
The Directors of the Company who held office during the
year and to the date of this report were as follows:
SIGNIFICANT SHAREHOLDERS
As at 30 May 2019 the following were, as far as the
Directors are aware, interested in 3% or more of the issued
share capital of the Company:
Number of
ordinary shares
% of issued
ordinary
share capital
Exploration Capital Partners
206,361,942
13.25%
Michael Joseph
Terry Grammer
RIBO Trust (beneficially
owned by Rick Rule)
95,979,890
80,963,426
60,000,000
6.16%
5.20%
3.85%
Charles Patrick Stewart Hall (Chairman)
Terrence Ronald Grammer
David Michael McNeilly
Mark Roderick Potter
FINANCIAL RISK MANAGEMENT
OBJECTIVES AND POLICIES
Details of the Group’s financial risk management
objectives and policies are set out in note 26 to these
financial statements.
Neville Keith Bergin
appointed 1 March 2018
Geoffrey Stephen McIntyre
resigned 1 March 2018
POST YEAR END EVENTS
Alistair Middleton
resigned 27 June 2018
Keith Springall
resigned 1 October 2018
Since 31 December 2018, the following post year end
events have taken place.
Further details of the Directors’ remuneration are given in
note 6, details of Directors’ share options are given in note
25 and the Directors’ interests in transactions of the Group
and the Company are given in note 27.
FUTURE DEVELOPMENTS
The future developments of the business are set out in the
Strategic Report under “Post Year End Developments” and
are incorporated into this report by reference.
FINANCIAL INSTRUMENTS
Details of the Group’s financial instruments are given in
note 26.
On 11 February 2019, the Company announced the
placing of 70,010,345 new ordinary shares at a price of
1.45p raising approximately £1million. The participants
in the placing also received one warrant for every two
placing shares subscribed at an exercise price of 2p and
valid for a period of two years from the date of admission
of the placing shares.
On 11 March 2019, the Company announced a further
placing of 137,162,552 new ordinary shares at a price of
1.45p raising approximately £2million. The participants
in the placing also received one warrant for every two
placing shares subscribed at an exercise price of 2p and
valid for a period of two years from the date of admission
of the placing shares. In addition, a further 9,629,960
warrants were issued on the same terms to advisors for
services related to the fundraising.
On 5 April 2019, the Company announced the issue of
a further 384,615 new ordinary shares in lieu of cash for
professional services provided to the Company.
33
Annual Report & Accounts | 2018 REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 31 DECEMBER 2018
INTERNAL CONTROL
The Directors acknowledge they are responsible for the
Group’s system of internal control and for reviewing the
effectiveness of these systems. The risk management
process and systems of internal control are designed to
manage rather than eliminate the risk of the Group failing
to achieve its strategic objectives. It should be recognised
that such systems can only provide reasonable and not
absolute assurance against material misstatement or loss.
The Company has well established procedures which are
considered adequate given the size of the business.
DIRECTORS’ INDEMNITY INSURANCE
As permitted by Section 233 of the Companies Act 2006,
the Company has purchased insurance cover on behalf of
the Directors indemnifying them against certain liabilities
which may be incurred by them in relation to the Group.
STATEMENT OF DIRECTORS’
RESPONSIBILITIES
The Directors are responsible for preparing the Annual
Report and Financial Statements in accordance with
applicable law and regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the
Directors have elected to prepare Group and Company
financial statements in accordance with International
Financial Reporting Standards (“IFRS”) as adopted by the
European Union. Under company law the Directors must
not approve the financial statements unless they are
satisfied that they give a true and fair view of the state
of affairs of the Group and of the Company and of the
profit or loss of the Group for that period. The Directors
are also required to prepare financial statements in
accordance with the rules of the London Stock Exchange
for companies quoted on AIM. In preparing these financial
statements, the Directors are required to:
• select suitable accounting policies and then apply them
consistently;
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and explain
the Group’s transactions and disclose with reasonable
accuracy at any time the financial position of the Group
and the Company and enable them to ensure that the
financial statements comply with the Companies Act
2006. They are also responsible for safeguarding the
assets of the Group and the Company and hence for
taking reasonable steps for the prevention and detection
of fraud and other irregularities.
In the case of each person who was a Director at the time
this report was approved:
• so far as that Director is aware there is no relevant
audit information of which the Company’s auditor is
unaware; and
• that Director has taken all steps that the Director ought
to have taken as a Director to make himself aware of
any relevant audit information and to establish that the
Company’s auditor is aware of that information.
The Directors are responsible for ensuring that the
annual report and the financial statements are made
available on a website. Financial statements are
published on the Company’s website in accordance
with legislation in the United Kingdom governing the
preparation and dissemination of financial statements,
which may vary from legislation in other jurisdictions.
The maintenance and integrity of the Company’s website
are the responsibility of the Directors. The Directors’
responsibilities also extend to the on-going integrity of the
financial statements contained therein.
AUDITORS
Crowe Clark Whitehill LLP changed its name to Crowe
U.K. LLP on 25 June 2018.
A resolution to re-appoint Crowe U.K. LLP as auditor of
the Company for the year ended 31 December 2018 will
be proposed at the forthcoming annual general meeting.
• make judgements and accounting estimates that are
reasonable and prudent;
By order of the Board
• state whether they have been prepared in accordance
with IFRS as adopted by the European Union, subject to
any material departures disclosed and explained in the
financial statements; and
• prepare the financial statements on the going concern
basis unless it is inappropriate to presume that the
Group and Company will continue in business.
Malcolm Bacchus
Secretary
30 May 2019
34
Metal Tiger plc Airborne electromagnetic survey dawn take-off from field base in the Okvanago Copper Project
35
Annual Report & Accounts | 2018 INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF METAL TIGER PLC
FOR THE YEAR ENDED 31 DECEMBER 2018
OPINION
We have audited the financial statements of Metal Tiger plc (the “Parent Company”) and its subsidiaries (the “Group”) for the year
ended 31 December 2018, which comprise:
• the Group statement of comprehensive income for the year ended 31 December 2018;
• the Group and Parent Company statements of financial position as at 31 December 2018;
• the Group and Parent Company statements of cash flows and statements of changes in equity for the year then
ended; and
• the notes to the financial statements, which include a summary of significant accounting policies and other
explanatory information.
The financial reporting framework that has been applied in the preparation of the Group and Parent Company financial
statements is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.
In our opinion:
• the financial statements give a true and fair view of the state of the Group’s and of the Parent Company’s affairs as at 31
December 2018 and of the Group’s loss for the period then ended;
• the Group’s financial statements have been properly prepared in accordance with International Financial Reporting Standards
as adopted by the European Union;
• the Parent Company’s financial statements have been properly prepared in accordance with International Financial
Reporting Standards as adopted by the European Union as applied in accordance with the requirements of the
Companies Act 2006; and
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies
Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are
required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than the Company and the Company’s members as a body, for our audit
work, for this report, or for the opinions we have formed.
BASIS FOR OPINION
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial
statements section of our report. We are independent of the Group in accordance with the ethical requirements that are
relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our
other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
CONCLUSIONS RELATING TO GOING CONCERN
We have nothing to report in respect of the following matters in relation to which ISAs (UK) require us to report to you when:
• The Directors’ use of the going concern basis of accounting in the preparation of the financial statements is not
appropriate; or
• The Directors have not disclosed in the financial statements any identified material uncertainties that may cast significant
doubt about the Group’s and the Parent Company’s ability to continue to adopt the going concern basis of accounting
for a period of at least twelve months from the date when the financial statements are authorised for issue.
36
Metal Tiger plc
OVERVIEW OF OUR AUDIT APPROACH
Materiality
In planning and performing our audit we applied the concept of materiality. An item is considered material if it could reasonably
be expected to change the economic decisions of a user of the financial statements. We used the concept of materiality
to both focus our testing and to evaluate the impact of misstatements identified. Based on our professional judgement, we
determined overall materiality for the Group financial statements as a whole to be £300,000, which represents approximately
2% of the Group’s net assets.
We use a different level of materiality (“performance materiality”) to determine the extent of our testing for the audit of the
financial statements. Performance materiality is set based on the audit materiality as adjusted for the judgements made as to
the entity risk and our evaluation of the specific risk of each audit area having regard to the internal control environment.
Where considered appropriate performance materiality may be reduced to a lower level, such as, for related party transactions
and directors’ remuneration. We agreed with the Audit Committee to report to it all identified errors in excess of £10,000. Errors
below that threshold would also be reported to it if, in our opinion as auditor, disclosure was required on qualitative grounds.
Overview of the scope of our audit
The Parent Company is accounted for from one central operating location, the group’s registered office. Our audit was
conducted from this main operating location.
The Group also has significant components accounted for in Thailand where the audit was undertaken by a local audit
firm. Audit instructions were issued to the component auditor, the instructions detailed the significant risks to be addressed
through the audit procedures and indicated the information we required to be reported back to the Group audit team. As
part of our audit we reviewed component auditor working papers. Telephone conference meetings were then held with the
component auditors.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
financial statements of the current period and include the most significant assessed risks of material misstatement (whether
or not due to fraud) that we identified. These matters included those which had the greatest effect on: the overall audit
strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were
addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters. This is not a complete list of all risks identified by our audit.
Key audit matter
How the scope of our audit addressed the key audit matter
Income recognition
There is a presumption that there is always a risk of
material misstatement due to improper recognition.
Our procedures included:
Given the nature of the business the key group
income generated relates to the gain on
investments primarily composing of gain on
investments and movements in fair value of
investments held for trading.
•
•
Agreeing of a sample of the disposal of investments during the
year to supporting documentation and re-performing the gain
or loss arising;
Reviewing disposals either side of the year end ensuring that
the income has been appropriately accounted for within the
correct period.
Movements in fair value were also considered and are discussed
within ‘Measurement and valuation of investments’ below.
37
Annual Report & Accounts | 2018
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF METAL TIGER PLC
FOR THE YEAR ENDED 31 DECEMBER 2018
Key audit matter
How the scope of our audit addressed the key audit matter
Measurement and valuation of investments
The group holds a number of different types of
investment where judgement is required when
determining the accounting treatment and
whether they are accounted for as investments
in subsidiaries, investments in joint ventures,
investments in associates or Direct Equities
Division investments.
In addition certain investments cannot be
agreed to third party market data, in particular
investments in the associates, investments in
joint ventures and the investments held in share
warrants. For these investments management has
determined alternative approaches to ensure that
these are appropriately valued at the year end.
Our procedures included:
•
•
For a sample of investments during the year considering the
classification determined by management, which included
consideration of their structure, legal form, contractual
agreement and any other fact and circumstances available.
Reviewing the value stated in the financial statements for
a sample of investments. Where this information cannot
be agreed to market information we have discussed the
assumptions determined by management in assessing the
value, challenging where appropriate, as well considering
whether there is any evidence investments may be impaired.
•
Considering the adequacy of the disclosures made in the
financial statements over this as a significant area of judgement.
Our audit procedures in relation to these matters were designed in the context of our audit opinion as a whole. They were
not designed to enable us to express an opinion on these matters individually and we express no such opinion.
OTHER INFORMATION
The Directors are responsible for the other information. The other information comprises the information included in the
annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements
does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express
any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is
to read the other information and, in doing so, consider whether the other information is materially inconsistent with the
financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify
such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material
misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have
performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
OPINION ON OTHER MATTER PRESCRIBED BY THE COMPANIES ACT 2006
In our opinion based on the work undertaken in the course of our audit
• the information given in the Strategic Report and the Directors’ Report for the financial year for which the financial
statements are prepared is consistent with the financial statements; and
• the Directors’ Report and Strategic Report have been prepared in accordance with applicable legal requirements.
38
Metal Tiger plc MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION:
In light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we
have not identified material misstatements in the Strategic Report or the Directors’ Report.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if,
in our opinion:
• adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit have not
been received from branches not visited by us; or
• the Parent Company financial statements are not in agreement with the accounting records and returns; or
• certain disclosures of Directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
RESPONSIBILITIES OF THE DIRECTORS FOR THE FINANCIAL STATEMENTS
As explained more fully in the Directors’ Responsibilities Statement, the Directors are responsible for the preparation of the
financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors
determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether
due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the Group’s and Parent
Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or the Parent Company or to
cease operations, or have no realistic alternative but to do so.
AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will
always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of these financial statements. A further description of our responsibilities for the audit of the
financial statements is located on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This
description forms part of our auditor’s report.
USE OF OUR REPORT
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies
Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are
required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than the Company and the Company’s members as a body, for our audit
work, for this report, or for the opinions we have formed.
Stephen Bullock (Senior Statutory Auditor)
for and on behalf of
Crowe U.K. LLP
Statutory Auditor
London
30 May 2019
39
Annual Report & Accounts | 2018 Core yard, core logging and core cutting facility in Ghanzi
40
Metal Tiger plc CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2018
Sale of interests in exploration operations in Botswana
(Loss)/Gain on disposal of investments
Movement in fair value of Direct Equities Division investments
Share of post-tax (losses)/profits of equity accounted associates
Share of post-tax losses of equity accounted joint ventures
Investment income
Net (loss)/gain before administrative expenses
Administrative expenses
OPERATING (LOSS)/PROFIT
Finance income
Finance costs
(LOSS)/PROFIT FOR THE YEAR BEFORE TAXATION
Tax on (loss)/profit on ordinary activities
LOSS ON ORDINARY ACTIVITIES AFTER TAXATION
OTHER COMPREHENSIVE INCOME
ITEMS WHICH MAY BE SUBSEQUENTLY RECLASSIFIED TO PROFIT OR LOSS:
Exchange differences on translation of foreign operations
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD
LOSS ON ORDINARY ACTIVITIES AFTER TAXATION
IS ATTRIBUTABLE TO:
Owners of the Company
Non-controlling interests
LOSS ON ORDINARY ACTIVITIES AFTER TAXATION
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD
IS ATTRIBUTABLE TO:
Owners of the Company
Non-controlling interests
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD
LOSS PER SHARE
Basic loss per share
Fully diluted loss per share
All amounts relate to continuing activities.
Note
4
18
18
14
15
3,5
7
8
9
5
11
11
2018
£’000
12,530
(511)
(12,434)
(176)
(33)
-
(624)
(3,647)
(4,271)
313
-
(3,958)
545
(3,413)
(152)
(3,565)
(3,404)
(9)
(3,413)
(3,554)
(11)
(3,565)
(0.28p)
(0.28p)
The accompanying accounting policies and notes are an integral part of these financial statements
2017
£’000
-
3,916
1,541
79
(100)
1
5,437
(4,927)
510
1
(164)
347
(545)
(198)
(8)
(206)
(180)
(18)
(198)
(188)
(18)
(206)
(0.02p)
(0.02p)
41
Annual Report & Accounts | 2018 CONSOLIDATED AND COMPANY STATEMENTS OF FINANCIAL POSITION
AT 31 DECEMBER 2018
NON -CURRENT ASSETS
Intangible assets
Property, plant and equipment
Deferred tax asset
Investment in subsidiaries
Investment in associates
Investment in joint ventures
Other fixed asset investments
Royalties receivable
CURRENT ASSETS
Direct Equities Division investments
Trade and other receivables
Amounts due from related parties
Cash and cash equivalents
CURRENT LIABILITIES
Trade and other payables
Amounts due to related parties
Loans and borrowings
NET CURRENT ASSETS
NON-CURRENT LIABILITIES
Deferred tax liability
Contingent consideration
NET ASSETS
EQUITY
Share capital
Share premium account
Share based payment reserve
Warrant reserve
Translation reserve
Retained profits*
TOTAL SHAREHOLDERS’ FUNDS
Equity non-controlling interests
TOTAL EQUITY
Note
2018
Group
£’000
2018
Company
£’000
2017
Group
£’000
2017
Company
£’000
12
9
13
14
15
16
17
18
19
27
20
21
27
22
9
23
24
24
33
17
-
-
1,668
2,049
107
1,285
5,159
-
-
-
564
1,668
2,049
107
1,285
5,673
34
31
97
-
2,203
1,224
-
-
-
-
97
536
2,203
1,224
-
-
3,589
4,060
12,079
12,079
10,062
10,062
339
-
1,859
14,277
162
146
52
360
102
2,743
1,831
16,755
143
146
-
289
482
-
2,845
13,389
725
-
49
774
13,917
16,466
12,615
-
125
125
-
125
125
642
119
761
242
2,111
2,835
15,250
666
-
-
666
14,584
642
119
761
18,951
22,014
15,443
17,883
135
10,639
1,484
5,173
(137)
1,565
18,859
92
18,951
135
10,639
1,484
5,173
-
4,583
22,014
-
109
6,125
928
3,348
13
4,912
15,435
8
109
6,125
928
3,348
-
7,373
17,883
-
22,014
15,443
17,883
* Retained profits/losses include the Company’s loss for the year after taxation of £2,942,000 (2017: profit £1,010,000).
These Financial Statements were approved by the Board of Directors on 30 May 2019 and were signed on its behalf by:
Michael McNeilly, Director
Company number: 04196004
The accompanying accounting policies and notes are an integral part of these financial statements
42
Metal Tiger plc
CONSOLIDATED AND COMPANY STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2018
Operating cash flow before working capital changes
(2,860)
(2,396)
CASH FLOWS FROM OPERATING ACTIVITIES
(Loss)/Profit before taxation
Adjustments for:
Net (profit) on sale of exploration operations in Botswana
Loss/(Profit) on disposal of Direct Equities Division investments
Movement in fair value of investments
Share of post-tax losses/(profits) of equity accounted associates
Share of post-tax losses of equity accounted joint ventures
Share based payment charge for year
Cost of warrant extension
Equity settled trading liabilities
Issue of KEMCO Mining plc warrants
Depreciation and amortisation
Write off of assets
Investment income
Finance income
Finance costs
Increase in trade and other receivables
(Decrease)/Increase in trade and other payables
Increase in amounts due from subsidiaries
Unrealised foreign exchange gains and losses
Net cash outflow from operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from investment disposals
Purchase of intangible assets
Purchase of fixed assets
Purchase of investment in subsidiary
Purchase of investment in, and loans to, associates
Purchase of investment in, and loans to, joint ventures
Purchase of other fixed asset investments
Purchase of investments
Costs relating to the disposal of exploration operations in Botswana
Finance income
Net cash outflow from investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares
Share issue costs
Net cash inflow from financing activities
NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS
Cash and cash equivalents brought forward
Effect of exchange rate changes
CASH AND CASH EQUIVALENTS CARRIED FORWARD
The accompanying accounting policies and notes are an integral part of these financial statements
2018
Group
£’000
2018
Company
£’000
2017
Group
£’000
2017
Company
£’000
(3,958)
(3,487)
347
1,555
(12,530)
(12,530)
511
12,434
511
12,434
-
(3,916)
(1,541)
-
(3,916)
(1,541)
176
33
708
-
119
(59)
19
-
-
(313)
-
176
33
708
-
119
(59)
-
-
-
(301)
-
(146)
(676)
-
30
(162)
(522)
(656)
68
(79)
100
468
263
63
59
19
2
(1)
(1)
164
(4,053)
(76)
284
-
(44)
(3,652)
(3,668)
(3,889)
3,967
-
-
-
(2,579)
(859)
(107)
(3,359)
(946)
1
3,967
-
-
-
(2,579)
(859)
(107)
(3,359)
(946)
-
5,402
5,402
(11)
(1)
-
(1,522)
(228)
-
-
-
(174)
(1,522)
(228)
-
(5,939)
(5,939)
-
1
-
1
(3,882)
(3,883)
(2,298)
(2,460)
6,992
(445)
6,547
(987)
2,845
1
1,859
6,992
(445)
6,547
(1,004)
2,835
-
1,831
8,028
(386)
7,642
1,455
1,390
-
2,845
(79)
100
445
263
63
59
-
-
(1)
-
161
(2,891)
(36)
336
(1,099)
(39)
(3,729)
8,028
(386)
7,642
1,453
1,382
-
2,835
43
Annual Report & Accounts | 2018 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2018
Share
capital
£’000
Share
premium
£’000
Share
based
payment
reserve
£’000
Warrant
reserve
£’000
Translation
reserve
£’000
Retained
profits /
(losses)
£’000
Total equity
shareholders’
funds
£’000
Non-
controlling
interests
£’000
Total
equity
£’000
BALANCE AT 1 JANUARY 2017
78
1,275
532
1,087
(68)
4,527
7,431
26
7,457
BALANCE AT 31 DECEMBER 2017
109
6,125
928
3,348
13
4,912
15,435
8
15,443
Loss for the year ended 31 December 2017
Other comprehensive income
TOTAL COMPREHENSIVE INCOME
Share issues
Warrant issues
Share issue expenses
Cost of share based payments
Transfer of reserves relating to exercise and
expiry of options and warrants
TOTAL CHANGES DIRECTLY TO EQUITY
Loss for the year ended 31 December 2018
Other comprehensive income
TOTAL COMPREHENSIVE INCOME
Share issues
Warrant issues
Share issue expenses
Cost of share based payments
Transfer of reserves relating to exercise and
expiry of options and warrants
Change of interest without loss of control
-
-
-
-
-
-
31
4,592
-
(386)
-
-
-
-
-
-
26
4,835
-
(445)
-
-
-
-
31
-
-
-
-
-
-
468
644
(72)
(1,226)
4,850
396
2,261
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,965
522
-
-
-
-
-
2,135
73
-
-
-
708
124
(152)
(383)
-
-
-
-
81
81
-
-
-
-
-
-
(180)
(89)
(269)
-
-
-
-
654
654
(180)
(8)
(188)
7,588
522
(386)
468
-
8,192
(18)
(198)
-
(8)
(18)
(206)
-
-
-
-
-
-
7,588
522
(386)
468
-
8,192
-
(150)
(3,404)
(3,404)
(9)
(3,413)
-
(150)
(2)
(152)
(150)
(3,404)
(3,554)
(11)
(3,565)
-
-
-
-
-
-
-
-
-
-
-
152
(95)
57
6,996
73
(445)
708
(259)
-
-
-
-
-
6,996
73
(445)
708
(259)
(95)
95
-
6,978
95
7,073
TOTAL CHANGES DIRECTLY TO EQUITY
26
4,514
556
1,825
BALANCE AT 31 DECEMBER 2018
135
10,639
1,484
5,173
(137)
1,565
18,859
92
18,951
The accompanying accounting policies and notes are an integral part of these financial statements
44
Metal Tiger plc
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2018
Share
capital
£’000
Share
premium
account
£’000
Share
based
payment
reserve
£’000
Warrant
reserve
£’000
Retained
profits /
(losses)
£’000
Total
equity
£’000
1,275
532
1,087
5,709
8,681
BALANCE AT 1 JANUARY 2017
Profit for the year and total comprehensive income
for the year ended 31 December 2017
Share issues
Warrant issues
Share issue expenses
Cost of share based payments
Transfer of reserves relating to exercise and expiry of
options and warrants
TOTAL CHANGES DIRECTLY TO EQUITY
BALANCE AT 31 DECEMBER 2017
Loss for the year and total comprehensive income
for the year ended 31 December 2018
Share issues
Warrant issues
Share issue expenses
Cost of share based payments
Transfer of reserves relating to exercise and expiry of
options and warrants
TOTAL CHANGES DIRECTLY TO EQUITY
BALANCE AT 31 DECEMBER 2018
78
-
31
-
-
-
31
109
-
26
-
-
-
-
26
135
-
4,592
(386)
-
-
-
-
468
644
4,850
6,125
-
4,835
-
(445)
(72)
396
928
-
-
-
-
-
708
124
4,514
10,639
(152)
556
1,484
The accompanying accounting policies and notes are an integral part of these financial statements
-
1,010
1,010
7,588
522
(386)
468
-
8,192
-
-
-
-
654
654
2,965
522
-
-
(1,226)
2,261
3,348
7,373
17,883
-
(2,942)
(2,942)
2,135
73
-
-
(383)
1,825
5,173
-
-
-
-
152
152
6,996
73
(445)
708
(259)
7,073
4,583
22,014
45
Annual Report & Accounts | 2018
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
IFRS 15 Revenue from Contracts with Customers
The Group has no revenue from customers which falls to be
accounted for under the new standard and the introduction of the
standard has no effect on current or prior year results, assets or
liabilities shown in these financial statements. The value attributed
to future royalty payments receivable under the agreement for
the sale of the Group’s interests in certain exploration operations
in Botswana has been treated in accordance with the principles
underlying IFRS 15 (see “Royalties Receivable” below and note 4).
IFRIC 22 Foreign Currency Transactions and Advance Consideration
and the Annual Improvements to IFRS 2014-2016
The adoption of IFRIC 22 and the Annual Improvements 2014-2016
have no effect on the current or prior year results, assets or liabilities
shown in these financial statements.
An overview of standards, amendments and interpretations
to IFRS issued but not yet effective, and which have
not been adopted early by the Company, is presented
below under “Statement of Compliance”.
GOING CONCERN
The financial statements are required to be prepared on the going
concern basis unless it is inappropriate to do so. At the year end the
Group had net current assets of £13,917,000 including cash balances
of £1,859,000 and quoted investments of £11,360,000 compared with
borrowings of £52,000. Since the year end the Company has raised
a further £3million, before costs, from placings. The Directors have
prepared cash flow forecasts through to 31 December 2020 which
demonstrate that the Group is able to meet its commitments as they
fall due. On this basis, the Directors have a reasonable expectation
that the Group has adequate resources to continue operating for the
foreseeable future. For this reason, they continue to adopt the going
concern basis in preparing the Group’s financial statements.
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of financial statements in conformity with IFRS
requires the use of estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the
reporting year. These estimates and assumptions are based upon
management’s knowledge and experience of the amounts, events or
actions. Actual results may differ from such estimates.
Estimates and judgements are continually evaluated and
are based on historical experience and other factors,
including expectations of future events that are believed
to be reasonable under the circumstances.
In certain circumstances, where fair value cannot
be readily established, the Directors are required to
make judgements over carrying value impairment and
evaluate the size of any impairment required.
SALE OF INTERESTS IN EXPLORATION OPERATIONS IN BOTSWANA
The calculation of the proceeds from the sale of interests in
exploration operations in Botswana includes an estimate of the value
of share options received in MOD Resources Limited, the acquirer
of those interests, and the value of the royalty payments that the
acquirer is contractually obliged to make to the Group when those
interests come into production. The assumptions used in making
those estimates are set out in note 4.
1. GENERAL INFORMATION
Metal Tiger plc is a public limited company incorporated in the
United Kingdom. The shares of the Company are listed on the
AIM market of the London Stock Exchange. The Group’s principal
activities are described in the Report of the Directors.
2. SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
BASIS OF PREPARATION
The Financial Statements have been prepared in accordance
with International Financial Reporting Standards (“IFRS”) and IFRIC
interpretations as adopted by the European Union and the Companies
Act 2006 applicable to companies reporting under IFRS. The Financial
Statements have also been prepared under the historical cost basis,
except for investments in the Direct Equities Division, share options
and warrants which are recognised at fair value.
The preparation of financial statements in conformity with IFRS
requires the use of certain critical accounting estimates. It also
requires management to exercise its judgement in the process
of applying the Company’s accounting policies. The areas
involving a higher degree of judgement or complexity, or areas
where assumptions and estimates are significant to the Financial
Statements, are disclosed later in these accounting policies.
The financial statements are presented in UK pounds, which is also
the Company’s functional currency.
The principal accounting policies adopted in the preparation of
these financial statements are set out below. These policies have
been consistently applied throughout all periods presented in the
financial statements.
A number of amendments to IFRS became effective for the financial
year beginning on 1 January 2018:
• IFRS 9 Financial Instruments
• IFRS 15 Revenue from Contracts with Customers
• IFRIC 22 Foreign Currency Transactions and Advance
Consideration
• Annual Improvements to IFRS 2014-2016.
IFRS 9 Classification and measurement of financial assets and liabilities
The classification of financial assets under IFRS 9 allows such assets
to be measured at amortised cost, fair value through the profit and
loss account or fair value through other comprehensive income.
The Group’s existing accounting policies provide for investments in
the Direct Equities Division as accounted for at fair value through
the profit and loss account and for trade receivables and loans to be
carried at amortised cost.
Trade and other receivables are held at amortised cost in line with
IAS 39 and IFRS 9 which replaces it.
IFRS 9 also requires an “expected credit loss” model to be applied to
financial assets measured at amortised cost other than those held as
investments in equity instruments. The financial instruments held by
the Group at amortised cost consist of short term trade receivables
mainly relating to tax recoverable and prepayments, cash and cash
equivalents. The nature of these assets is such that the change in
the model does not affect the amount at which they are held in the
financial statements.
Accordingly no re-classification or changes to the current or prior
year results, assets or liabilities shown in these financial statements
are required in order to comply with IFRS 9.
46
Metal Tiger plc
SHARE BASED PAYMENTS AND SHARE WARRANTS
The calculation of the fair value of equity-settled share based
awards and warrants issued in connection with share issues and
the resulting charge to the Statement of Comprehensive Income or
reserves requires assumptions to be made regarding future events
and market conditions. These assumptions include the future
volatility of the Company’s share price. These assumptions are then
applied to a recognised valuation model in order to calculate the fair
value of the awards at the date of grant.
FAIR VALUE OF INVESTMENTS
The Group’s investments in the Direct Equities Division require
measurement at fair value. Investments in shares in quoted entities
traded in an active market and unquoted shares are valued as set out
in “Current Assets Investments” below. The unquoted share warrants
(Level 3) are shown at Directors’ valuation based on a value derived
from either Black-Scholes or Monte Carlo pricing models depending
on the suitability of the method to the specific warrant taking into
account the terms of the warrant and discounting for the non-
tradability of the warrants where appropriate. Both pricing models
use inputs relating to expected volatility that require estimations. No
value is ascribed to warrants which include terms which cause the
exercise price to be dependent on events outside the control of the
Group and outcomes which are unable to be predicted with any
certainty. The nil price options to acquire shares in MOD Resources
Limited received as part of the disposal for certain of the Group’s
exploration interests in Botswana are valued at the open market
value of the shares in MOD Resources Limited as the shares and
options are considered to be intrinsically equivalent (see note 4).
CLASSIFICATION OF JOINT ARRANGEMENTS
For all joint arrangements structured in separate vehicles the Group
must assess the substance of the joint arrangement in determining
whether it is classified as a joint venture or joint operation. This
assessment requires the Group to consider whether it has rights
to the joint arrangement’s net assets (in which case it is classified
as a joint venture), or rights to and obligations for specific assets,
liabilities, expenses, and revenues (in which case it is classified as a
joint operation). Factors the Group must consider include:
• structure;
• legal form;
• contractual agreement; and
• other facts and circumstances.
Upon consideration of these factors, the Group has determined that
all its joint arrangements structured through separate vehicles give it
rights to the net assets and are therefore classified as joint ventures.
SUBSIDIARY, ASSOCIATE AND JOINT VENTURE INVESTMENTS
In arriving at the carrying value of investments in subsidiaries,
associates and joint ventures, the Group determines the need
for impairment based on the level of geological knowledge and
confidence of the mineral resources (as further described in its
accounting policy). Such decisions are taken on the basis of the
exploration and research work carried out in the period utilising
expert reports.
BUSINESS COMBINATIONS
Contingent consideration on acquisitions is recognised at fair value.
STATEMENT OF COMPLIANCE
The Financial Statements comply with IFRS as adopted by the
European Union.
Details of new standards applied during the year and their effect on
the financial statements are set out under “Basis of Preparation” above.
At the date of authorisation of these financial statements, a number
of Standards and Interpretations were in issue but not yet effective.
The adoption of these standards and interpretations, or any of the
amendments made to existing standards as a result of the annual
improvements cycle, including the introduction of IFRS 16 will not
have a material effect on the financial statements in the year of initial
application nor will require restatement of prior year results, assets
or liabilities.
BASIS OF CONSOLIDATION
The Consolidated Statement of Comprehensive Income and
Statement of Financial Position include the financial statements
of the Company and its subsidiary undertakings made up to
31 December 2018.
Subsidiaries are all entities over which the Group has control. The
Group controls an entity when the Group is exposed to, or has rights
to, variable returns from its involvement with the entity and has
the ability to affect those returns through its power over the entity.
Subsidiaries are fully consolidated from the date on which control is
transferred to the Group. They are deconsolidated from the date that
control ceases.
Profit or loss and each component of other comprehensive income
are attributed to the equity holders of the parent of the Group and
to non-controlling interests, even if this results in non-controlling
interests having a deficit balance. When necessary, adjustments
are made to the financial statements of subsidiaries to bring their
accounting policies into line with the Group’s accounting policies.
All intra-group assets and liabilities, equity, income, expenses and
cash flows relating to transactions between members of the Group
are eliminated in full on consolidation.
A change in ownership interest of a subsidiary without a loss of
control is accounted for as an equity transaction. If the Group loses
control over a subsidiary, it:
• derecognises the assets (including goodwill) and liabilities of the
subsidiary;
• derecognises the carrying amount of any non-controlling
interests;
• derecognises the cumulative translation differences recorded
in equity;
• recognises the fair value of the consideration received;
• recognises the fair value of any investment retained;
• recognises any surplus or deficit in the Statement of
Comprehensive Income; and
• reclassifies the parent’s share of components previously
recognised in other comprehensive income to profit or loss or
retained earnings, as appropriate, as would be required if the
Group had directly disposed of the related assets or liabilities.
When the Group ceases to have control, any retained interest in
the entity is re-measured to its fair value at the date when control
is lost, with the change in carrying amount recognised in profit or
loss. The fair value is the initial carrying amount for the purposes of
subsequently accounting for the retained interest as an associate,
joint venture or financial asset. In addition, any amounts previously
recognised in other comprehensive income in respect of that
entity are accounted for as if the Group had directly disposed of
the related assets or liabilities. This may require that the amounts
previously recognised in other comprehensive income be
reclassified to profit or loss.
47
Annual Report & Accounts | 2018
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
2. SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES CONTINUED
BUSINESS COMBINATIONS
Business combinations are accounted for using the acquisition
method. The cost of an acquisition is measured as the aggregate
of the consideration transferred, measured at fair value at the date
of acquisition and the amount of any non-controlling interest in
the acquired entity. Non-controlling interests (“NCI”) may be initially
measured either at fair value or at the NCI’s proportionate share of
the recognised amounts of the acquiree’s identifiable net assets.
The choice of measurement basis is made on a transaction-by-
transaction basis. Acquisition costs incurred are expensed and
included in administrative expenses except where they relate to
the issue of debt or equity instruments in connection with the
acquisition, in which case they are included in finance costs.
When the business combination is achieved in stages, any previously
held equity interest is re-measured at its acquisition date fair value
and any resulting gain or loss is recognised in profit or loss. It is then
considered in determination of goodwill.
Any contingent consideration to be transferred by the acquirer is
recognised at fair value at the acquisition date. Any subsequent
changes to the fair value of the contingent consideration are
adjusted against the cost of the acquisition if they occur within
the measurement period of twelve months following the date
of acquisition. Any subsequent changes to the fair value of the
contingent consideration after the measurement period are
recognised in the Income Statement. Contingent consideration that
is classified as equity is not re-measured and subsequent settlement
is accounted for within equity.
SEGMENTAL REPORTING
The accounting policy for identifying segments is based on internal
management reporting information that is regularly reviewed by
the chief operating decision maker, which is identified as the Board
of Directors. In identifying its operating segments, management
generally follows the Company’s service lines which represent the
main products and services provided by the Company.
EXPLORATION COSTS
Deferred income taxes are calculated using the liability method on
temporary differences. Deferred tax is generally provided on the
difference between the carrying amounts of assets and liabilities and
their tax bases. However, deferred tax is not provided on the initial
recognition of an asset or liability unless the related transaction is a
business combination or affects tax or accounting profit. Temporary
differences include those associated with shares in subsidiaries
and joint ventures and are only not recognised if the Company
controls the reversal of the difference and it is not expected for the
foreseeable future. In addition, tax losses available to be carried
forward as well as other income tax credits to the Company are
assessed for recognition as deferred tax assets.
Deferred tax liabilities are provided in full, with no discounting.
Deferred tax assets are recognised to the extent that it is probable
that the underlying deductible temporary differences will be able
to be offset against future taxable income. Current and deferred
tax assets and liabilities are calculated at tax rates that are expected
to apply to their respective period of realisation, provided they are
enacted or substantively enacted at the Statement of Financial
Position date. Changes in deferred tax assets or liabilities are
recognised as a component of tax expense in the Statement of
Comprehensive Income, except where they relate to items that are
charged or credited to equity in which case the related deferred tax
is also charged or credited directly to equity.
FOREIGN CURRENCY TRANSLATION
Transactions in foreign currencies are translated at the exchange rate
ruling at the date of the transaction.
The results of overseas operations are translated at rates
approximating to those ruling when the transactions took place.
Monetary assets and liabilities denominated in foreign currencies
are translated at the rates of exchange ruling at the Statement of
Financial Position reporting date. All exchange differences are dealt
with through the Statement of Comprehensive Income as they arise.
INTANGIBLE ASSETS
Software Licences
Expenditure is stated at cost, less amortisation and provision for any
impairment. Amortisation is provided at rates calculated to write off
the cost of the software over its expected useful life as follows:
Exploration costs incurred by Group companies, associates and joint
ventures are expensed in arriving at profit or loss for the period.
Software
10 years straight line
Investments made are capitalised as an asset where the underlying
projects have mineral resources which are compliant with
internationally recognised mineral resource standards (JORC and
NI 43-101) or where the investment is to acquire an interest in an
investment or associate that holds commercial information, assets
or strategic features against which a current commercial value can
be reasonably assessed.
The JORC Code, the Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves, is a professional
code of practice that sets minimum standards for public reporting
of mineral exploration results, mineral resources and ore reserves.
NI 43-101 is a national instrument for the Standards of Disclosure
for Mineral Projects within Canada which provides a codified set of
rules and guidelines for reporting and displaying information related
to mineral properties owned by, or explored by, companies which
report these results on stock exchanges within Canada.
TAXATION
Current taxation is the taxation currently payable on taxable profit for
the year.
Gains and losses on disposals are determined by comparing the
disposal proceeds with the carrying amount and are included in the
Statement of Comprehensive Income in arriving at profit or loss for
the year.
INVESTMENTS IN ASSOCIATES AND JOINT VENTURES
Associates are entities, other than subsidiaries or joint ventures, over
which the Company has significant influence. Significant influence
is the power to participate in the financial and operating policy
decisions of the investee but does not amount to control or joint
control of the investee.
A joint venture is a contractual arrangement whereby two or more
parties undertake an economic activity that is subject to joint
control. Joint control is the contractually agreed sharing of control
such that significant operating and financial decisions require
the unanimous consent of the parties sharing control. In some
situations, joint control exists even though the Company has an
ownership interest of more than 50% because joint venture partners
have equal control over management decisions. The Company’s
joint venture interests are held through one or more Jointly
Controlled Entities (a “JCE”). A JCE is a joint venture that involves the
establishment of a corporation, partnership or other entity in which
each venturer has a long term interest.
48
Metal Tiger plc
Exploration costs in respect of investments in associates and joint
ventures are capitalised or expensed according to the policy set out
above in respect of Group exploration costs. For associates and
joint ventures which are equity accounted for, any share of losses
are offset against cost of investment or loans advanced.
FINANCIAL ASSETS
The Company’s financial assets comprise investments held in the
Direct Equities Division, royalties receivable, trade receivables and
cash and cash equivalents.
OTHER FIXED ASSET INVESTMENTS
Other fixed asset investments comprise equity interests which are
primarily held for strategic purposes and not for short-term trading.
The method of accounting for these assets is set out below under
“Accounting for Direct Equity Division investments”.
ROYALTIES RECEIVABLE
Royalties receivable are stated at the expected amounts to be
received based on existing committed contracts and discounted at an
appropriate discount rate which reflects the estimated risk-weighted
cost of capital relevant to that asset. The amortisation of the discount
over the period to the receipt of the royalty payments is credited to
the Statement of Comprehensive Income as finance income.
The expected amounts to be received, the period over which they
will be received and the appropriate discount rate are assessed on
the date of acquisition of the royalty interests and re-assessed at
each reporting date.
CURRENT ASSET INVESTMENTS
All investments, except those primarily held for strategic purposes
or not for short term trading, are designated as current asset
investments. The method accounting for these assets is set out
below under “Accounting for Direct Equity Division investments”.
ACCOUNTING FOR DIRECT EQUITY DIVISION INVESTMENTS
Investment transactions are accounted for on a trade date basis.
Incidental acquisition costs are expensed. Assets are derecognised
at the trade date of the disposal. Where investments are traded in
a liquid market, the fair value of the financial instruments in the
balance sheet is based on the quoted bid price at the balance
sheet date, with no deduction for any estimated future selling
cost. Non-traded investments are valued by the Directors using
primary valuation techniques such as, where possible, comparable
valuations, recent transactions, last price and net asset value.
Changes in the fair value of investments held at fair value through
profit or loss and gains and losses on disposal are recognised in the
Statement of Comprehensive Income.
TRADE AND OTHER RECEIVABLES
Trade and other current asset receivables are recognised initially at
fair value and subsequently measured at amortised cost using the
effective interest method, less any provision for impairment. The
amount of any impairment provided is based on the expected loss
on an item-by-item basis for significant receivables and using a risk-
based provision matrix where appropriate.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash on hand and demand
deposits, together with other short term, highly liquid investments
that are readily convertible into known amounts of cash and which
are subject to an insignificant risk of changes in value.
IMPAIRMENT OF FINANCIAL ASSETS
The carrying values of the Company’s assets are reviewed annually
for any indicators of impairment. Where the carrying value of an
asset exceeds the recoverable amount (i.e. the higher of value
in use and fair value less cost to sell), the asset is written down
accordingly. Impairment charges are included in profit or loss,
except to the extent they reverse gains previously recognised in
other comprehensive income.
FINANCIAL LIABILITIES
The Company’s financial liabilities comprise trade and other
payables. Financial liabilities are obligations to pay cash or other
financial assets and are recognised when the Company becomes a
party to the contractual provisions of the instruments.
Trade and other payables are recognised initially at their fair value and
subsequently measured at amortised cost less settlement payments.
SHARE BASED PAYMENTS
All share based payments are accounted for in accordance with
IFRS 2 – “Share based payments”. The Company issues equity-settled
share based payments in the form of share options and warrants
to certain Directors, employees and advisors. Equity-settled share
based payments are measured at fair value at the date of grant. The
fair value determined at the grant date of equity-settled share based
payments is expensed on a straight line basis over the vesting period,
based on the Company’s estimate of shares that will eventually vest.
At each balance sheet date, the Company revises its estimate of the
number of equity instruments expected to vest as a result of the
effect of non-market based vesting conditions. The impact of the
revision of the original estimates, if any, is recognised in profit or loss
such that the cumulative expense reflects the revised estimate, with
a corresponding adjustment to retained earnings.
Equity-settled share based payments are made in settlement of
professional and other costs. These payments are measured at the
fair value of the services provided which will normally equate to
the invoiced fees and charged to the Statement of Comprehensive
Income, share premium account or are capitalised according to the
nature of the fees incurred.
Fair value is estimated using the Black-Scholes valuation model. The
expected life used in the model has been adjusted on the basis of
management’s best estimate for the effects of non-transferability,
exercise restrictions and behavioural considerations.
WARRANTS
Share warrants issued to shareholders in connection with share
capital issues are measured at fair value at the date of issue and
treated as a separate component of equity. Fair value is determined
at the grant date and is estimated using the Black-Scholes valuation
model. Share warrants issued separately to Directors, employees
and advisors are accounted for in accordance with the policy on
share based payments above.
EQUITY
Equity comprises the following:
“Share capital” representing the nominal value of equity shares;
“Share premium” representing the excess over nominal value of
the fair value of consideration received for equity shares, net of
expenses of the share issue;
“Share based payment reserve” representing the cumulative cost of
share based payment;
“Warrant reserve” representing the outstanding cost of warrants
issued in connection with share capital issues; and
“Retained losses” representing retained losses.
49
Annual Report & Accounts | 2018 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(Loss)/gain for the year before taxation
(13,418)
11,417
(1,957)
Taxation
642
-
(97)
(Loss)/gain for the year after taxation
(12,776)
11,417
(2,054)
3. SEGMENTAL INFORMATION
DIVISIONAL SEGMENTS
Year ended 31 December 2018
Group
COMPREHENSIVE INCOME
Net (loss)/gain on investments
Intercompany sales
Administrative expenses
Net finance income/expense
FINANCIAL POSITION
Intangible assets
Property, plant and equipment
Investment in associates
Investment in joint ventures
Other fixed asset investments
Royalties receivable
Total non-current assets
Current assets
Current liabilities
Non-current liabilities
Net assets
CASH FLOWS
Net cash flows
Total
£’000
(624)
-
-
-
-
-
-
-
-
-
-
-
-
313
(3,958)
545
(3,413)
33
17
1,668
2,049
107
1,285
5,159
Direct
Equities
£’000
Direct
Projects
£’000
Central
costs
£’000
Inter-
company
£’000
(12,945)
12,321
152
-
-
-
(152)
-
(434)
(39)
(1,436)
(1,929)
152
(3,647)
380
(28)
-
-
-
-
107
-
107
12,134
33
17
1,668
2,049
-
1,285
5,052
3,013
-
-
-
-
-
-
-
1,873
(2,743)
14,277
-
-
(3,007)
(125)
(96)
-
12,241
4,933
1,777
69
(5,793)
4,737
2,743
-
-
-
(360)
(125)
18,951
(987)
Direct Equities include strategic investments in resource exploration and development companies including equity and warrant holdings. Direct
Projects are mainly by way of joint venture arrangements and include interests in precious, strategic and energy metals, with projects located in
Botswana, Thailand and Spain. Central costs comprise those costs which cannot be allocated directly to either operating division and include
office rent, audit fees, AIM costs and a proportion of employee and Directors’ remuneration relating to managing the business as a whole.
50
Metal Tiger plc Gain/(loss) for the year before taxation
4,865
(3,017)
(1,501)
Taxation
Gain/(loss) for the year after taxation
(642)
-
97
4,223
(3,017)
(1,404)
Year ended 31 December 2017
Group
COMPREHENSIVE INCOME
Net gain/(loss) on investments
Intercompany sales
Administrative expenses
Net finance income/expense
FINANCIAL POSITION
Intangible assets
Property, plant and equipment
Deferred tax asset
Investment in associates
Investment in joint ventures
Total non-current assets
Current assets
Current liabilities
Non-current liabilities
Net assets
CASH FLOWS
Net cash flows
Direct
Equities
£’000
Direct
Projects
£’000
Central
costs
£’000
Inter-
company
£’000
Total
£’000
5,457
-
(21)
256
1
-
-
5,437
(256)
-
(585)
(3,120)
(1,478)
256
(4,927)
(7)
(132)
(24)
34
31
-
2,203
1,224
3,492
2,360
-
-
97
-
-
97
-
-
-
-
-
-
10,089
(102)
(642)
9,345
(1,045)
(4,454)
6,954
3,050
(2,110)
13,389
(2,602)
(180)
2,110
(119)
3,131
-
2,967
-
-
-
-
-
-
-
-
-
-
(163)
347
(545)
(198)
34
31
97
2,203
1,224
3,589
-
-
-
(774)
(761)
15,443
1,455
51
Annual Report & Accounts | 2018 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
3. SEGMENTAL INFORMATION CONTINUED
GEOGRAPHICAL SEGMENTS
Year ended 31 December 2018
Group
COMPREHENSIVE INCOME
UK
£’000
EMEA
£’000
Net (loss)/gain on investments
(2,223)
12,497
Intercompany sales
Administrative expenses
Net finance income / expense
-
(2,820)
1
-
(24)
23
Asia-
Pacific
£’000
46
152
(650)
148
(Loss)/gain for the year before taxation
(5,042)
12,496
(304)
(11,071)
Taxation
545
-
-
-
(Loss)/gain for the year after taxation
(4,497)
12,496
(304)
(11,071)
Australasia
£’000
Americas
£’000
Inter-
company
£’000
(10,914)
(30)
-
(152)
-
(296)
139
-
(9)
2
(37)
-
(37)
-
-
-
-
-
-
-
Total
£’000
(624)
-
152
(3,647)
-
-
-
-
-
-
-
-
-
-
-
313
(3,958)
545
(3,413)
33
17
1,668
2,049
107
1,285
5,159
2,743
-
-
(360)
(125)
18,951
-
-
1,668
1,318
-
1,285
4,271
33
17
-
731
-
-
781
-
-
-
-
-
-
-
-
-
-
-
107
-
107
3,428
(130)
(125)
-
3,472
9,902
218
(2,743)
14,277
(150)
(2,817)
-
-
(6)
-
-
-
3,280
4,121
1,436
9,896
218
FINANCIAL POSITION
Intangible assets
Property, plant and equipment
Investment in associates
Investment in joint ventures
Other fixed asset investments
Royalties receivable
Total non-current assets
Current assets
Current liabilities
Non-current liabilities
Net assets
52
Metal Tiger plc UK
£’000
EMEA
£’000
Australasia
£’000
Americas
£’000
Inter-
company
£’000
Total
£’000
Year ended 31 December 2017
Group
COMPREHENSIVE INCOME
Net gain/(loss) on investments
Intercompany sales
Administrative expenses
Net finance income / expense
Gain/(loss) for the year before taxation
Taxation
Gain/(loss) for the year after taxation
FINANCIAL POSITION
Intangible assets
Property, plant and equipment
Deferred tax asset
Investment in associates
Investment in joint ventures
Total non-current assets
Current assets
Current liabilities
Non-current liabilities
Net assets
Asia-
Pacific
£’000
-
-
(1,663)
13
(1,650)
-
34
31
-
-
731
796
1,145
-
(221)
(21)
903
-
903
-
-
-
-
-
-
(283)
(1,650)
4,313
256
(3,181)
(11)
1,377
(545)
832
-
-
97
-
-
97
5,848
(566)
(761)
(21)
-
(118)
(144)
(283)
-
-
-
-
2,203
493
2,696
-
(6)
-
2,360
7,291
(2,237)
-
919
(75)
-
7,216
4,618
2,690
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5,437
(256)
-
256
(4,927)
-
-
-
-
-
-
-
-
-
-
(163)
347
(545)
(198)
34
31
97
2,203
1,224
3,589
(2,110)
13,389
2,110
-
-
(774)
(761)
15,443
53
Annual Report & Accounts | 2018 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
4. SALE OF INTERESTS IN EXPLORATION OPERATIONS IN BOTSWANA
Equity interest acquired
Options acquired
Royalty rights acquired
Sale proceeds
Book value of net assets sold
Direct costs of sale
Costs attributable to sale
Profit on sale
2018
£’000
4,607
10,963
1,200
16,770
3,294
946
4,240
12,530
2017
£’000
-
-
-
-
-
-
-
-
In July 2018, the Company entered into a binding agreement to sell its interests in certain exploration operations in Botswana, known as the T3
Copper Project, held in a joint venture with MOD Resources Limited of Australia (“MOD”), through the sale of the Company’s 30% interest in Metal
Capital Limited.
The sale was conditional, inter alia, on the approval of MOD’s shareholders and certain approvals from the Government of Botswana. Those
conditions were met on 16 November 2018. The sale of the interests was achieved by the establishment of a new associated company, Metal
Capital Exploration Limited, and the transfer of the remaining interests in the original joint venture to a subsidiary of that company, Tshukudu
Exploration Botswana (Pty) Limited. The Group’s interest in Metal Capital Limited, which then held only the interests in the T3 Dome, was then
sold to MOD Resources Limited.
In consideration for the disposal of the T3 Copper Project, Metal Tiger was issued with 17,090,000 shares in MOD (the “Consideration Shares”),
and 40,673,566 unquoted MOD options with a nil exercise price and expiring on 15 November 2021 (the “Options”) and was granted a 2%
smelter royalty, up to a maximum of US$2,000,000 on production from the T3 resource when brought into production. Following the issue of
the Consideration Shares, Metal Tiger was interested in 31,064,220 MOD shares, representing 12.5% of MOD’s then enlarged share capital. Metal
Tiger is restricted from disposing of any of the Consideration Shares, as well as any MOD shares issued pursuant to the conversion of the Options,
for a period of 12 months from completion. The Options represent approximately 16% of MOD’s enlarged share capital (as enlarged by the
Consideration Shares). Metal Tiger may exercise the Options by converting them into one MOD share each, provided Metal Tiger owns equal to
or less than 12.5% of MOD after completing such conversion in order to comply with ownership limits for issued shares (if such conversion occurs
before 16 November 2021). In arriving at the fair value of the consideration for the disposal of the T3 Copper Project management considers the
Consideration Shares and the Options to be intrinsically equivalent and has therefore attributed a fair value of A$0.47 to each of the Consideration
Shares and the Options. No discount has been applied to the Options because in the opinion of the Directors any such discount which might
appropriately be applied would be immaterial. The option price is equivalent to the valuation that would be obtained using the Black-Scholes
methodology with a nil option price.
The royalty has been valued on a discounted cash flow basis assuming an 8% discount rate and recovery in the second half of 2021.
5. OPERATING LOSS/PROFIT
Loss/profit from operations is arrived at after charging:
Wages and salaries (see note 6)
Share based payment expense – options
Share based payment expense – warrants
Amortisation of intangible assets
Depreciation
54
2018
£’000
2017
£’000
1,481
708
-
4
15
1,120
468
263
4
15
Metal Tiger plc During the year the Group obtained the following services from the Company’s auditor:
2018
£’000
2017
£’000
Fees payable to the Company’s auditor for:
the audit of the Group’s financial statements
tax services
other assurance services
6. EMPLOYEE AND DIRECTORS’ REMUNERATION
The expense recognised for employee benefits for continuing operations is analysed below:
Short term employee benefits (including Directors)
Pension costs
Social security costs
Share based remuneration
DIRECTORS’ REMUNERATION
Remuneration
Consultancy fees
Bonuses
Pension costs
Other benefits
Share based remuneration
Social security costs
45
12
-
2018
£’000
1,343
6
132
1,481
708
2,189
2018
£’000
610
43
318
3
11
985
636
1,621
113
1,734
40
6
140
2017
£’000
1,022
11
87
1,120
731
1,851
2017
£’000
448
46
182
10
9
695
716
1,411
73
1,484
55
Annual Report & Accounts | 2018 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
6. EMPLOYEE AND DIRECTORS’ REMUNERATION CONTINUED
DIRECTORS’ REMUNERATION CONTINUED
Details of Directors’ employment benefits expense are as follows:
Name of Director
Charles Hall
Terry Grammer
Michael McNeilly
Mark Potter
Neville Bergin
Keith Springall
Alastair Middleton
Geoffrey McIntyre
Remuneration
£’000
Consultancy
fees
£’000
Bonuses
£’000
Pension
costs
£’000
Other
benefits
£’000
50
-
172
90
29
145
124
-
610
-
40
-
-
-
-
-
3
43
25
20
150
73
-
25
25
-
318
-
-
-
-
-
-
3
-
3
1
-
1
2
-
5
2
-
11
Details of share options and warrants granted to Directors during the year are given in note 25.
Average number of persons employed during the year:
Direct Projects operations
Office and management
Key management are the Directors of the Company.
7. FINANCE INCOME
Bank interest
Amortisation of discount on royalties receivable (see note 4)
Foreign exchange gains
8. FINANCE COSTS
Bank interest
Foreign exchange losses
56
Total
2018
£’000
76
60
323
165
29
175
154
3
985
Total
2017
£’000
47
36
247
47
-
153
127
38
695
2018
Number
2017
Number
4
12
16
2018
£’000
1
39
273
313
2018
£’000
-
-
-
10
10
20
2017
£’000
1
-
-
1
2017
£’000
-
164
164
Metal Tiger plc 9. TAXATION
Current tax on income for the year
Deferred tax
Total tax charge for the year
2018
£’000
-
545
545
2017
£’000
-
(545)
(545)
The tax on the Group’s (loss)/profit before tax differs from the theoretical amount that would arise using the weighted average rate applicable to
profits of the Group or Company as follows:
Factors affecting the tax charge
(Loss)/profit before tax
(Loss)/profit before tax multiplied by rate of corporation tax in the UK of 19% (2017: 19.25%)
Overseas profits/losses taxed at different rates
Changes in rate at which deferred tax is provided
Income not chargeable to tax
Expenses not allowable for tax
Other permanent timing differences
Unprovided prior year deferred tax
Tax losses carried forward
Total tax
2018
£’000
(3,958)
752
(1)
(288)
2,415
(288)
3
-
(2,048)
545
Movements in deferred tax assets and liabilities during the year and the amounts outstanding at the year end are as follows:
Deferred tax asset/(liability)
At 1 January 2017
Year ended 31 December 2017:
Share based payments
Direct Equities Division investments unrealised gains
Tax losses carried forward
Charge for the year
At 31 December 2017
Year ended 31 December 2018:
Credit for the year
At 31 December 2018
Assets
£’000
-
17
-
80
97
97
(97)
-
Liabilities
£’000
-
-
(642)
-
(642)
(642)
642
-
2017
£’000
347
(67)
(54)
72
-
(414)
(20)
104
(166)
(545)
Net
£’000
-
17
(642)
80
(545)
(545)
545
-
The deferred tax assets and liabilities and the credit/charge for the year relate to Metal Tiger plc.
No deferred tax asset or liability is provided at 31 December 2018 owing to the availability of losses carried forward and the uncertainty of the
timing of future profits. As at 31 December 2018 the Group has unprovided tax losses carried forward of approximately £4,400,000 (2017:
£2,400,000) of which £2,400,000 relate to subsidiaries in Thailand and expire over the period to 31 December 2023 (2017: £2,400,000 over the
period to 31 December 2022).
57
Annual Report & Accounts | 2018 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
10. PROFIT/(LOSS) ACCOUNTED FOR IN THE PARENT COMPANY
As permitted under Section 408 of the Companies Act 2006, a Statement of Comprehensive Income for the Company is not presented as part of
these financial statements.
11. (LOSS)/EARNINGS PER SHARE
The basic earnings per share is based on the profit or loss for the year divided by the weighted average number of shares in issue during the
year. The weighted average number of ordinary shares for the year assumes that all shares have been included in the computation based on the
weighted average number of days since issue.
Loss attributable to equity holders of the Company:
Continuing and total operations
2018
£’000
2017
£’000
(3,404)
(180)
No of shares
No of shares
Weighted average number of ordinary shares in issue for basic earnings
1,199,134,506
930,169,942
Weighted average of exercisable share options and warrants
Weighted average number of ordinary shares in issue for fully diluted earnings
n/a
n/a
n/a
n/a
No share options and warrants outstanding at 31 December 2018 or 31 December 2017 were dilutive in view of the loss for the year and all such
potential ordinary shares were excluded from the weighted average number of ordinary shares in calculating diluted earnings per share.
Loss per ordinary share - basic:
Continuing and total operations
Loss per ordinary share - fully diluted:
Continuing and total operations
2018
Pence per
share
2017
Pence per
share
(0.28p)
(0.02p)
(0.28p)
(0.02p)
58
Metal Tiger plc 12. INTANGIBLE ASSETS
Group
COST
At 1 January 2017
Acquisitions in the year
At 31 December 2017
Translation differences
At 31 December 2018
AMORTISATION
At 1 January 2017
Charge for the year
At 31 December 2017
Charge for the year
At 31 December 2018
NET BOOK VALUE
At 31 December 2016
At 31 December 2017
At 31 December 2018
Software
£’000
27
11
38
3
41
-
4
4
4
8
27
34
33
13. SUBSIDIARY UNDERTAKINGS
The following were subsidiary undertakings at the end of the year. All subsidiaries have year ends which are coterminous with that of the parent
Company. Except where indicated all companies are engaged in mineral exploration. Metal Tiger plc controls those companies where its
proportion of voting rights is less than 50% by virtue of shareholder agreements.
Name
KEMCO Mining plc* (non-trading)
Metal Tiger Australia Pty Limited*
(non-trading)
Metal Tiger Exploration and Mining Co. Ltd.
Metal Tiger IHQ Co. Ltd.*
Metal Group Co. Ltd.
Metal Tiger Resources Co. Ltd.
* Directly owned by the Company.
Registered office
107 Cheapside
London EC2V 6DN
Level 2
267 St Georges Terrace
Perth WA 6000, Australia
75/32 Richmond
Office Building
12th Floor
Soi Sukhumvit 26
Sukhumvit Road
Klongton, Klongtoey
Bangkok,Thailand
Country of
incorporation
or registration
Effective
dividend
rights held
Type of
shares held
Proportion of
voting rights and
ordinary share
capital held
England and
Wales
100%
Ordinary
100%
Australia
100%
Ordinary
Thailand
100%
Ordinary
Preference
100%
Ordinary
99%
Ordinary
100%
Ordinary
100%
49%
100%
100%
49%
88%
59
Annual Report & Accounts | 2018 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
13. SUBSIDIARY UNDERTAKINGS CONTINUED
As part of a reorganisation of the Company’s interests in Thailand, Metal Holdings Co. Ltd., Metal Tiger Ventures Co. Ltd. and Metal Tiger
Resources Co. Ltd., subsidiaries of Metal Tiger plc, were dissolved during the year. The effect attributable to the members of the Group has been
reflected in the Statement of Changes in Equity.
INVESTMENT IN SUBSIDIARY UNDERTAKINGS
Company
At 1 January
Increase in capital
Share based payments
At 31 December
2018
£’000
536
28
-
564
2017
£’000
339
174
23
536
14. INVESTMENT IN ASSOCIATES
The Group and the Company held the following interests in associates at the end of the year:
Name
Registered office
Country of
incorporation
or registration
Proportion of voting
rights and ordinary
share capital held
Held directly:
Metal Capital Exploration Limited*
107 Cheapside
London EC2V 6DN
England and
Wales
30%
Nature of business
Mineral exploration
Held indirectly through Metal Capital Exploration Limited:
Tshukudu Exploration Botswana (Pty) Limited
Plot 64518, Fairground
Gaborone, Botswana
Botswana
30%
Mineral exploration
*ASX and LSE listed MOD Resources Limited owns the remaining 70% of Metal Capital Exploration Limited.
Group and Company
At 1 January 2017
Additions in the year
Share of comprehensive income
Translation differences
At 31 December 2017
Additions in the year
Share of comprehensive losses
Transfers (see note 4)
Disposals (see note 4)
Translation differences
At 31 December 2018
Cost of investment
£’000
Loan advances
£’000
45
249
79
-
373
290
(176)
1,312
(373)
-
1,426
699
1,273
-
(142)
1,830
2,498
-
(1,312)
(2,921)
147
242
Total
£’000
744
1,522
79
(142)
2,203
2,788
(176)
-
(3,294)
147
1,668
As more fully explained in note 4, Metal Tiger sold its interests in Metal Capital Limited during the year and acquired a 30% interest in Metal Capital
Exploration Limited, which holds those licences previously owned by Metal Capital Limited which were not sold. The effects of the transfer of
assets, the disposal of Metal Capital Limited and the acquisition of Metal Capital Exploration Limited are set out below.
60
Metal Tiger plc Metal Capital Limited
At 1 January 2017
Additions in the year
Share of comprehensive income
Translation differences
At 31 December 2017
Additions in the year
Share of comprehensive losses
Transfers (see note 4)
Disposals (see note 4)
Translation differences
At 31 December 2018
The consolidated results and net assets of Metal Capital Limited were as follows:
Revenue
Operating costs
Finance (expense)/income
(Loss)/profit before taxation
Tax on loss on ordinary activities
(Loss)/profit for the year
Non-current assets
Current assets
Current liabilities
Net assets
Cost of investment
£’000
Loan advances
£’000
45
249
79
-
373
284
(169)
(115)
(373)
-
-
699
1,273
-
(142)
1,830
2,278
-
(1,312)
(2,921)
125
-
2018
£’000
-
(200)
(362)
(562)
-
(562)
2018
£’000
-
-
-
-
Total
£’000
744
1,522
79
(142)
2,203
2,562
(169)
(1,427)
(3,294)
125
-
2017
£’000
-
(109)
374
265
-
265
2017
£’000
6,478
365
(6,675)
168
61
Annual Report & Accounts | 2018 Total
£’000
-
1,427
226
(7)
22
1,668
2018
£’000
-
(1)
(4)
(5)
-
(5)
2018
£’000
4,957
286
(809)
4,434
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
14. INVESTMENT IN ASSOCIATES CONTINUED
Metal Capital Exploration Limited
At 31 December 2017
Transfers (see note 4)
Additions in the year
Share of comprehensive losses
Translation differences
At 31 December 2018
Cost of investment
£’000
Loan advances
£’000
-
1,427
6
(7)
-
1,426
-
-
220
-
22
242
The consolidated results and net assets of Metal Capital Exploration Limited were as follows:
Revenue
Operating costs
Finance expense
Loss before taxation
Tax on loss on ordinary activities
Loss for the year
Non-current assets
Current assets
Current liabilities
Net assets
62
Metal Tiger plc 15. INVESTMENT IN JOINT VENTURES
The companies in which Metal Tiger’s joint venture interests are held are set out below. All are engaged in mineral exploration.
Joint Venture
Held directly:
Boh Yai Mining Company Ltd.
Kalahari Metals Limited
Logrosán Minerals Limited
Country of
incorporation
or registration
Principal
place of
business
Proportion of ownership
interest and voting rights
held by the Group/Company
31 Dec 2018
31 Dec 2017
Thailand
Thailand
Option to
acquire 80%
Option to
acquire 80%
UK
UK
UK
UK
34% *
-
50%
50%
Registered office
89/2, Soi Rajvithee 2
Rajvithee Road
Kwaeng Samsen Nai
Khet Payathai
Bangkok 10400
25-29 Maddox Street
London W1S 2PP
28 Fidlas Avenue
Cardiff CF14 0NY
Held indirectly through Logrosán Minerals Limited:
Logrosán Minera SL
Calle Dr. Reiro de Sorapán 2
10120 Logrosán
Cáceres, Spain
Spain
Spain
50%
50%
*At 31 December 2018 Metal Tiger held an option to acquire a further 16% of the voting rights and ordinary share capital in Kalahari Metals Limited
for US$500,000. This option was exercised on 11 March 2019.
Group and Company
At 1 January 2017
Additions in the year
Share of losses
Provisions
At 31 December 2017
Additions in the year
Share of losses
Translation differences
At 31 December 2018
Cost of investment
£’000
Loan advances
£’000
1,098
-
(100)
-
998
859
(33)
-
1,824
-
228
-
(2)
226
-
-
(1)
225
Total
£’000
1,098
228
(100)
(2)
1,224
859
(33)
(1)
2,049
The fair value of investments in joint ventures at the year end is considered by the Directors not to be materially different to the carrying amounts.
63
Annual Report & Accounts | 2018 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
15. INVESTMENT IN JOINT VENTURES CONTINUED
Boh Yai
At 1 January 2017
Additions
At 31 December 2017
Additions
At 31 December 2018
Cost of investment
£’000
Loan advances
£’000
Total
£’000
731
-
731
-
731
-
-
-
-
-
731
-
731
-
731
The Boh Yai joint venture has yet to start operations and the above amounts represent the cost of investment to the year end. The Group has an
option to acquire 80% of the issued share capital of Boh Yai Mining Company Ltd. and a hire purchase agreement with Kanchanaburi Exploration
and Mining Company Limited to use equipment at the mine site in Kanchanaburi Province, Thailand.
Kalahari Metals Limited
At 31 December 2017
Additions in the year
Share of comprehensive losses
Translation differences
At 31 December 2018
Cost of investment
£’000
Loan advances
£’000
-
859
(26)
-
833
-
-
-
-
-
The consolidated results and net assets of Kalahari Metals Limited were as follows:
Revenue
Operating costs
Finance expense
Loss before taxation
Tax on loss on ordinary activities
Loss for the year
Non-current assets
Current assets
Current liabilities
Net assets
64
Total
£’000
-
859
(26)
-
833
2018
£’000
19
(88)
(4)
(73)
-
(73)
2018
£’000
653
161
(18)
796
Metal Tiger plc Logrosán Minerals Limited
Cost of investment
£’000
Loan advances
£’000
At 1 January 2017
Share of losses
Additions in the year
Translation differences
At 31 December 2017
Share of losses
Translation differences
At 31 December 2018
367
(100)
-
-
267
(7)
-
260
-
-
228
(2)
226
-
(1)
225
Total
£’000
367
(100)
228
(2)
493
(7)
(1)
485
Metal Tiger owns 50% of Logrosán Minerals Ltd (“LML”). Metal Tiger’s joint venture partner in LML is Mineral Exploration Network (Finland) Ltd. LML
owns 100% of a subsidiary in Spain, Logrosán Minera SL, which owns exploration licences in Logrosán, San Cristobal and Zorita in the Extremadura
autonomous region of Spain for gold and tungsten.
The consolidated results and year end position of Logrosán Minerals Ltd and its subsidiary were as follows:
Revenue
Operating costs
Loss before taxation
Tax on loss on ordinary activities
Loss and total comprehensive income for the year
Non-current assets
Current assets
Current liabilities
Net assets
2018
£’000
-
(14)
(14)
-
(14)
2018
£’000
303
-
(804)
(501)
2017
£’000
-
(200)
(200)
-
(200)
2017
£’000
-
8
(495)
(487)
16. OTHER FIXED ASSET INVESTMENTS
Other non-current fixed asset investments comprise an investment in Sita Capital Partners LLP, an asset management partnership which is not
held for short term trading and is valued under the IFRS 13 fair value hierarchy by reference to valuation techniques using inputs that are not based
on observable market data. Mr Mark Potter, a director of the Company, is the controlling partner of Sita Capital Partners LLP.
65
Annual Report & Accounts | 2018 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
17. ROYALTIES RECEIVABLE
Group and Company
At 1 January 2017 and 31 December 2017
Acquisitions in the year
Amortisation of discount on acquisition
Translation differences
At 31 December 2018
Further details are given in note 4 to the financial statements.
18. DIRECT EQUITIES DIVISION INVESTMENTS
At 1 January – investments at fair value
Acquisitions
Disposal proceeds
Gain on disposal of investments
Movement in fair value of investments
At 31 December – investments at fair value
Categorised as:
Level 1 – Quoted investments
Level 2 – Unquoted investments
Level 3 – Unquoted investments - equity
Level 3 – Unquoted investments – share warrants
Royalties
£’000
-
1,200
39
46
1,285
2018
Group and
Company
£’000
2017
Group and
Company
£’000
10,062
18,929
(3,967)
(511)
(12,434)
12,079
4,068
5,939
(5,402)
3,916
1,541
10,062
11,360
9,342
-
706
13
12,079
-
-
720
10,062
The table of investments sets out the fair value measurements using the IFRS 13 fair value hierarchy. Categorisation within the hierarchy has been
determined on the basis of the lowest level of input that is significant to the fair value measurement of the relevant asset as follows:
Level 1 – valued using quoted prices in active markets for identical assets and includes the options in MOD Resources Limited acquired as a
result of the sale of the exploration operations in Botswana for the reasons set out in note 4;
Level 2 – valued by reference to valuation techniques using observable inputs other than quoted prices included within Level 1; and
Level 3 – valued by reference to valuation techniques using inputs that are not based on observable market data.
The maximum credit risk as regards these investments is not considered to be materially different from the carrying value of those investments.
66
Metal Tiger plc
LEVEL 3 FINANCIAL ASSETS
Reconciliation of Level 3 fair value measurement of financial assets:
At 1 January
Purchases
Transfer from/(to) Level 1
Disposal proceeds
Warrants exercised
Loss on disposal of investments
Movement in fair value
At 31 December
2018
Group and
Company
£’000
2017
Group and
Company
£’000
720
764
393
(240)
(20)
(272)
(626)
719
1,547
19
(28)
-
(262)
-
(556)
720
Level 3 valuation techniques used by the Group are explained in note 2 (Fair value of investments). The following key input has been used in the
valuation model: volatilities ranging between 51% and 103% depending on the investment (2017: 43% to 107%). A 20% increase in the volatility
estimate would result in a £10,000 increase in the fair value (2017: £91,000) and a 20% decrease would result in a £17,000 decrease in fair value
(2017: £182,000).
19. TRADE AND OTHER RECEIVABLES
Tax and social security
Other receivables
Prepayments and accrued income
2018
Group
£’000
157
23
159
339
2018
Company
£’000
1
6
95
102
2017
Group
£’000
326
53
103
482
2017
Company
£’000
182
50
10
242
The fair value of trade and other receivables, using the expected credit loss model, is considered by the Directors not to be materially different to
carrying amounts. Included in other receivables at 31 December 2017 was £42,000 in respect of share capital called up but not fully paid at the
year end, received in full in 2018. Also included in other receivables at 31 December 2018 and 31 December 2017 is an amount of £179,000
(2017: £179,000) which has been fully provided against.
20. CASH AND CASH EQUIVALENTS
Cash at investment brokers
Cash at bank
2018
Group
£’000
55
1,804
1,859
2018
Company
£’000
55
1,776
1,831
2017
Group
£’000
27
2,818
2,845
2017
Company
£’000
27
2,808
2,835
The fair value of cash and cash equivalents is considered by the Directors not to be materially different to carrying amounts.
67
Annual Report & Accounts | 2018 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
21. TRADE AND OTHER PAYABLES
Trade payables
Tax and social security
Other payables
Accrued charges
2018
Group
£’000
2018
Company
£’000
2017
Group
£’000
2017
Company
£’000
40
6
12
104
162
40
-
11
92
143
263
27
18
417
725
260
23
15
368
666
The fair value of trade and other payables, is considered by the Directors not to be materially different to carrying amounts.
22. LOANS AND BORROWINGS
At 1 January
Translation differences
At 31 December
The loan is non-interest bearing and is repayable on demand.
23. CONTINGENT CONSIDERATION
2018
Group
£’000
2018
Company
£’000
2017
Group
£’000
2017
Company
£’000
49
3
52
-
-
-
48
1
49
-
-
-
On 16 February 2016, the Company exercised its option to acquire the remainder of the Thai based assets of SouthEast Asia Mining Corporation
(“SEAM”), comprising its investment in SouthEast Asia Exploration and Mining Co. Ltd (now called Metal Tiger Exploration and Mining Co. Ltd.) and
certain fellow subsidiaries, to provide an increased portfolio of base metal interests in Thailand through joint venture interests with Boh Yai Mining
Company Ltd. in Thailand. The consideration was a cash payment of US$200,000 and a payment of US$300,000 in 23,799,000 new ordinary
shares of the Company. A potential further cash payment of US$100,000, a US$60,000 working capital contribution and issue of 23,799,000
warrants over the Company’s ordinary shares at an exercise price of 1.74p per share may be issued to SEAM subject to the grant of the primary
target prospecting licence 1/2557 in the Kanchanaburi province in Western Thailand.
24. SHARE CAPITAL
CALLED UP, ISSUED AND FULLY PAID
Number of
ordinary shares
Share capital
£’000
Share premium
£’000
774,655,180
312,277,354
-
-
1,086,932,534
263,023,531
-
-
1,349,956,065
78
31
-
-
109
26
-
-
135
1,275
4,592
644
(386)
6,125
4,835
124
(445)
10,639
At 1 January 2017
Share issues
Warrant reserve release
Share issue expenses
At 31 December 2017
Share issues
Warrant reserve release
Share issue expense
At 31 December 2018
68
Metal Tiger plc 200
3,516
2,616
167
388
6,887
109
6,996
4,850
2,324
315
36
7,525
63
7,588
SHARE ISSUES
The following issues of ordinary shares of 0.01p took place during the year:
Date
22 February 2018
KEMCO Mining plc warrants converted (see note 25)
7 August 2018
Placing
30 August 2018
Placing
Various dates
Warrants exercised (see note 25)
Various dates
Options exercised (see note 25)
Total issued for cash
Issue price
Number
issued
Amount gross
£’000
1.627p
12,259,617
2.800p
125,573,737
2.800p
93,425,714
2.000p
8,399,999
2.856p *
18,330,000
257,989,067
Various dates
For remuneration, professional and other fees and acquisition of investments
2.157p*
5,034,464
263,023,531
* Average price.
Details of warrants issued with the placing and further details of warrants and options exercised during the year are given in note 25.
Details of share issues since the year end are given in note 28.
Share issues in the year ended 31 December 2017 were as follows:
Date
21 April 2017
Placing
Various dates
Placing warrants exercised
13 October 2017
KEMCO Mining plc warrants exercised
Various dates
Options exercised
Total issued for cash
Issue price
Number
issued
Amount gross
£’000
3.000p
161,666,666
1.814p*
128,096,150
1.950p
16,174,279
1.000p
3,670,000
309,607,095
Various dates
For remuneration and professional and other fees
2.338p*
2,670,259
312,277,354
*Average price.
25. SHARE OPTIONS AND WARRANTS
SHARE OPTIONS
At 1 January
Issued in year
Exercised in year
Cancelled or expired in year
At 31 December
Exercisable at 31 December
Average life remaining at 31 December
2018
2017
Weighted average
exercise price
(p)
3.57
4.10
2.12
2.00
4.03
3.98
Number
104,530,000
78,000,000
(18,330,000)
(4,000,000)
160,200,000
82,200,000
4.13 years
Number
48,700,000
59,500,000
(3,670,000)
-
104,530,000
45,030,000
3.37 years
Weighted average
exercise price
(p)
2.05
4.66
1.00
-
3.57
2.15
69
Annual Report & Accounts | 2018 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
25. SHARE OPTIONS AND WARRANTS CONTINUED
SHARE OPTIONS CONTINUED
The Company issued further shares under the existing Directors and Staff Share Option Schemes during the year to enable Directors and staff to
subscribe for ordinary shares in the Company. The fair values of the options granted were determined using the Black-Scholes pricing model. The
significant inputs to the model in respect of the options were as follows:
Grant date and vesting date
Share price at date of grant
Exercise price per share
No. of options
Risk free rate
Expected volatility
Life of option
Calculated fair value per share option
The following schemes remain in existence from prior years:
Grant date and vesting date
Share price at date of grant
Exercise price per share
21 July 2018
21 July 2018
2.97p
3.50p
2.97p
4.50p
31,500,000
46,500,000
1%
88%
3 years
1.952p
1%
88%
3 years
1.825p
18 January 2017
18 January 2017
11 May 2017
1.65p
3.00p
1.65p
2.00p
2.175p
6.00p
No. of options originally granted
26,000,000
500,000
33,000,000
Risk free rate
Expected volatility
Life of option
Calculated fair value per share option
Grant date and vesting date
Share price at date of grant
Exercise price per share
1%
95%
3 years
0.770p
1%
95%
3 years
0.914p
1%
93%
5 years
1.181p
3 March 2016
22 June 2016
22 June 2016
1.175p
2.00p
3.25p
1.70p
3.25p
2.00p
No. of options originally granted
10,000,000
7,500,000
5,750,000
Risk free rate
Expected volatility
Life of option
Calculated fair value per share option
1%
87%
3 years
0.507p
1%
98%
3 years
2.365p
1%
98%
3 years
2.275p
70
Metal Tiger plc Options outstanding to Directors at 31 December 2018 are as follows:
Current Directors at the year end:
Exercise price
(p)
At 1 January
Number
Granted
Number
Exercised
Number
At 31 December
Number
Charles Hall
Terry Grammer
Michael McNeilly
Mark Potter
Neville Bergin
3.00
3.50
4.50
6.00
2.00
3.00
3.50
4.50
6.00
2.00
3.00
3.50
4.50
6.00
3.00
3.50
4.50
6.00
3.50
4.50
3,000,000
-
(3,000,000)
-
-
-
3,000,000
4,500,000
5,000,000
8,330,000
2,000,000
-
-
-
-
-
2,000,000
3,000,000
2,000,000
2,000,000
7,500,000
-
-
-
-
-
10,000,000
15,000,000
10,000,000
1,000,000
-
-
-
-
10,000,000
15,000,000
4,000,000
-
-
-
2,000,000
3,000,000
-
-
-
3,000,000
4,500,000
5,000,000
(3,330,000)
5,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,000,000
2,000,000
3,000,000
2,000,000
2,000,000
7,500,000
10,000,000
15,000,000
10,000,000
1,000,000
10,000,000
15,000,000
4,000,000
2,000,000
3,000,000
44,830,000
67,500,000
(6,330,000)
106,000,000
Based on the difference between the price of the share options and the share price on the date of exercise, the options exercised by Directors
during the year would have given rise to a gain of £28,000 on exercise (2017: £nil).
71
Annual Report & Accounts | 2018 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
25. SHARE OPTIONS AND WARRANTS CONTINUED
SHARE OPTIONS CONTINUED
Directors ceasing during the year in respect of their period as Directors:
Keith Springall
Geoffrey McIntyre
Alistair Middleton
Exercise price
(p)
Held at 1 January 2018
and on cessation
as Director
Number
2.00
3.00
6.00
3.00
6.00
7.50
2.00
3.00
6.00
2,500,000
5,000,000
5,000,000
3,000,000
2,000,000
1,750,000
500,000
4,500,000
5,000,000
29,250,000
The total share based payment expense recognised in the income statement for the year ended 31 December 2018 in respect of options granted
was £708,000 (2017: £468,000).
PLACING WARRANTS
At 1 January
Issued in year (see below)
Exercised in year
Expired in year
At 31 December
Exercisable at 31 December
Average life remaining at 31 December
2018
2017
Number
260,621,468
235,175,341
(8,399,999)
(23,799,000)
463,597,810
463,597,810
Weighted average
exercise price
(p)
4.001
5.000
(2.000)
(1.740)
4.660
4.660
2.6 years
Number
308,064,104
166,516,666
(128,096,150)
(85,863,152)
260,621,468
246,158,301
Weighted average
exercise price
(p)
2.472
5.913
(1.814)
(5.899)
4.001
3.023
3.2 years
In addition, up to 4,850,000 Secondary warrants are potentially issuable on a one for one basis to existing holders of Brokers’ warrants when the
Brokers’ warrants are exercised. These warrants will have, on issue, an exercise price of 6p per share and will be valid for a further 5 years from the
date of issue. A value attributable to these Secondary warrants was included in arriving at the fair value of the Brokers’ warrants issued on 27 April
2017 in connection with the placing on 26 April 2017.
Warrants exercised in the year included the remaining warrants in respect of those issued by the Company on 7 March 2017 in connection with
the potential initial public offer (“IPO”) for KEMCO Mining plc intended to be the listing vehicle for the Group’s Thai operations. Following the
announcement of the postponement of the IPO on 2 February 2018, the 199,500 outstanding warrants converted into 12,259,617 ordinary shares
in the Company on 28 February 2018 equivalent to an issue price of approximately 1.63p per ordinary share.
72
Metal Tiger plc The warrants issued during the year were in connection with the placings of the Company’s ordinary shares as detailed in note 24 and have been
charged as a component of equity. The fair values of the warrants were determined using the Black-Scholes pricing model. The significant inputs
to the model were as follows:
Grant date
Share price at date of grant
Exercise price per share
Placing warrants
Placing warrants
For fees
13 August 2018
30 August 2018
1 November 2018
2.825p
5.00p
2.35p
5.00p
1.875p
5.00p
No. of options originally granted
128,250,067
93,425,714
13,499,560
Risk free rate
Expected volatility
Life of option
Calculated fair value per share option
26. FINANCIAL INSTRUMENTS
CAPITAL RISK MANAGEMENT
1%
80%
5 years
1.083p
1%
81%
5 years
0.799p
1%
80%
5 years
0.541p
The Group manages its capital to ensure that it will be able to continue as a going concern while maximising the return to shareholders through
the optimisation of debt and equity funding. Currently the Company’s capital structure consists entirely of shareholders’ equity, comprising issued
share capital and reserves.
The Company uses financial instruments, other than derivatives, to provide funding for its operations.
The main risks arising from the Company’s financial instruments are credit risk, liquidity risk, market risk and foreign exchange risk. The Company
does not have any significant other risks. The Directors agree policies for managing these risks and they are summarised below.
CREDIT RISK
The Group’s exposure to credit risk is limited to the carrying amounts of trade and other receivables, and cash and cash equivalents recognised at
the balance sheet date, as follows:
Trade and other receivables
Cash and cash equivalents
2018
£’000
23
1,859
1,882
2017
£’000
53
2,845
2,898
The Group’s management considers that all the above financial assets that are not impaired for each of the reporting dates under review are of good
credit quality, including those that are past due.
No impairment provision was required against trade and other receivables in the year (2017: none). None of the Group’s financial assets are secured
by collateral or other credit enhancements.
The credit risk for cash and cash equivalents is considered negligible, since the counterparties are reputable banks with high quality external
credit ratings.
73
Annual Report & Accounts | 2018 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
26. FINANCIAL INSTRUMENTS CONTINUED
LIQUIDITY RISK
The Group makes both short term and long term investments. Short term investments are all quoted investments and such investments may be
sold to meet the Group’s funding requirements. However, the market in small capitalised companies can be illiquid. Long term investments are joint
ventures through unquoted investment vehicles and are subject to greater liquidity risk. Directors perform extensive due diligence prior to investment.
As the Group has no significant interest bearing assets, the Group’s income and operating cash flows are substantially independent of changes in
market interest rates.
The following table shows the contractual maturities of the Group’s financial liabilities, including repayments of both principal and interest where applicable:
Six months or less:
Trade and other payables
Loans and borrowings
Total contractual cash flows
MARKET RISK
2018
£’000
2017
£’000
58
52
110
308
49
357
The Company is exposed to market risk as a result of investing in listed resource companies. The fair value of each investment will fluctuate as a
result of factors specific to the investment. The Company actively reviews its portfolio of investments to manage this risk. An increase of 10% in
the valuation of investments held at the year end would increase the profit before tax for the year by £1,208,000 (2017: £1,006,000).
FOREIGN CURRENCY RISK
The Group is exposed to movements in exchange rates in respect of direct equity investments, overseas subsidiaries, investments in joint ventures
and associates and cash held in foreign currencies.
The following table illustrates the sensitivity of net assets to changes in exchange rates at the year end:
CHANGE IN EQUITY
5% Increase in AUD fx rate against GBP
5% Decrease in AUD fx rate against GBP
5% Increase in BWP fx rate against GBP
5% Decrease in BWP fx rate against GBP
5% Increase in CAD fx rate against GBP
5% Decrease in CAD fx rate against GBP
5% Increase in EUR fx rate against GBP
5% Decrease in EUR fx rate against GBP
5% Increase in THB fx rate against GBP
5% Decrease in THB fx rate against GBP
5% Increase in USD fx rate against GBP
5% Decrease in USD fx rate against GBP
2018
£’000
495
(495)
74
(74)
11
(11)
(30)
30
13
(13)
111
(111)
2017
£’000
304
(304)
73
(73)
-
-
(1)
1
(3)
3
(3)
3
Exposure to foreign exchange rates varies during the year depending on the volume and nature of foreign transactions. Nonetheless, the analysis
above is considered to be representative of the Group’s exposure to currency risk.
74
Metal Tiger plc CATEGORIES OF FINANCIAL INSTRUMENTS
FINANCIAL ASSETS
The IFRS 9 categories of financial asset included in the Statement of Financial Position and the headings in which they are included are as follows:
HELD AT AMORTISED COST
Cash and bank balances
Loans and receivables
HELD AT FAIR VALUE
Other fixed asset investments
Royalties receivable
Direct Equities Division current asset investments
FINANCIAL LIABILITIES HELD AT AMORTISED COST
2018
£’000
1,859
180
107
1,285
12,079
2017
£’000
2,845
379
-
-
10,062
The IFRS 9 categories of financial liabilities included in the Statement of Financial Position and the headings in which they are included are as follows:
Trade and other payables
Trade and other payables – amounts due to related companies
Loans and borrowings
27. RELATED PARTY TRANSACTIONS
GROUP AND PARENT COMPANY
2018
£’000
162
146
52
2017
£’000
725
-
49
A list of significant shareholders is included in the Report of the Directors. No ultimate controlling party has been identified by the Directors.
Details of the Directors’ remuneration and consultancy fees are disclosed in note 6 and share options granted to Directors are disclosed in note
25. In the opinion of the Board, only the Directors of the parent Company fall to be regarded as key employees.
During the year the Company acquired a 10% equity interest in Sita Capital Partners LLP, of which Mr Mark Potter is the controlling partner, for
US$150,000 (see note 16). Other than the investment there have been no transactions with the partnership during the year.
No amounts were owed by any Director to the Group at 31 December 2018 or 31 December 2017.
The following amounts were owed by the Group to Directors at the year end in respect of expenses and outstanding salaries:
Charles Hall
Terry Grammer
Michael McNeilly
Mark Potter
Neville Bergin
2018
£’000
2017
£’000
-
12
1
-
3
-
14
-
-
-
75
Annual Report & Accounts | 2018 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
27. RELATED PARTY TRANSACTIONS CONTINUED
PARENT COMPANY TRANSACTIONS WITH SUBSIDIARIES
The Company charged Metal Tiger Exploration and Mining Co. Ltd. £157,000 (2017: £256,000) during the year in respect of fees for consultancy
services and for travel and similar costs incurred in respect of their operations.
In addition, the Company has funded the operations of subsidiaries during the year.
Subsidiary
KEMCO Mining plc
Metal Horse Limited
Metal Partners Co. Ltd.
Metal Tiger Exploration and Mining Co. Ltd.
Metal Tiger IHQ Co. Ltd.
Metal Ventures Co. Ltd.
Metal Group Co. Ltd.
Metal Holdings Co. Ltd.
Metal Tiger Resources Co. Ltd.
Metal Tiger Australia Pty Limited
Amounts due to
the Company
31 December 2018
£’000
Amounts due to
the Company
31 December 2017
£’000
-
-
-
1,379
1,018
-
311
-
35
-
2,743
-
-
3
1,034
789
-
222
30
33
-
2,111
No amounts were due by the Company to its subsidiary companies. Amounts due from subsidiary companies included within current assets and
current liabilities represent amounts advanced for operational activities and repayable on demand and interest free or for management fees and
interest thereon and are repayable on normal commercial terms.
PARENT COMPANY TRANSACTIONS WITH ASSOCIATES AND JOINT VENTURES
Details of transactions with associates and joint ventures are given in notes 14 and 15 respectively.
Company and Group
Amounts due by the Company and Group at 31 December:
Kalahari Metals Limited
2018
£’000
(146)
(146)
2017
£’000
-
-
The amount outstanding represented uncalled amounts relating to the investment made during the year which has been called and paid since the
year end.
28. POST YEAR END EVENTS
On 11 February 2019 the Company announced the placing of 70,010,345 new ordinary shares at a price of 1.45p raising approximately £1.0 million.
The participants in the Placing also received one warrant for every two placing shares subscribed at an exercise price of 2p and valid for a period
of two years from the date of admission of the placing shares.
On 11 March 2019, the Company announced a further placing of 137,162,552 new ordinary shares at a price of 1.45p raising approximately
£2.0million. The participants in the Placing also received one warrant for every two placing shares subscribed at an exercise price of 2p and valid
for a period of two years from the date of admission of the placing shares. In addition, a further 9,629,960 warrants were issued on the same
terms to advisors for services related to the fundraising.
On 11 March 2019, the Company exercised its option to acquire a further 16% of the voting rights and ordinary share capital in Kalahari Metals
Limited for US$500,000 bringing its total interests to 50%.
On 5 April 2019, the Company announced the issue of a further 384,615 new ordinary shares in lieu of cash for professional services provided to
the Company.
76
Metal Tiger plc THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.
If you are in any doubt about the contents of this document or the action you should take, you should immediately seek your own independent
financial advice from your stockbroker, solicitor or other independent financial advisor duly authorised under the Financial Services and
Markets Act 2000.
If you have sold or transferred all of your Ordinary Shares in Metal Tiger plc (the “Company”), you should forward this document, immediately
to the stockbroker, bank or other agent through whom the sale or transfer was effected for the delivery to the purchaser or transferee.
The distribution of this document in jurisdictions other than the UK may be restricted by law and therefore persons into whose possession this
document comes should inform themselves about and observe such restrictions. Any failure to comply with these restrictions may constitute a
violation of the securities laws of any such jurisdiction.
This document does not constitute an offer to issue or sell or a solicitation of any offer to subscribe for or buy Ordinary Shares in Metal Tiger plc.
METAL TIGER PLC
(incorporated and registered in England and Wales under number 04196004)
Notice of an Annual General Meeting
Notice of an Annual General Meeting of the Company to be held at 10:00am on 27 June 2019 at the Oriental Club, Stratford House, Stratford Place,
London W1C 1ES is set out at the end of this document.
A summary of the action to be taken by shareholders is set out in the Letter from the Chairman which follows and in the Notice of Annual General Meeting.
77
Annual Report & Accounts | 2018 LETTER FROM THE CHAIRMAN
METAL TIGER PLC
(Incorporated and registered in England & Wales with registered number 04196004)
Directors:
Charles Patrick Stewart Hall (Chairman, Non-Executive Director)
David Michael McNeilly (CEO, Executive Director)
Mark Roderick Potter (Executive Director)
Terrence Ronald Grammer (Non-Executive Director)
Neville Keith Bergin (Non-Executive Director)
Registered Office
107 Cheapside
London
EC2V 6DN
To the shareholders and, for information only, to the holders of warrants and options
30 May 2019
Dear Shareholder
Notice of Annual General Meeting
Introduction
I am writing to invite you to an Annual General Meeting of the Company to be held at 10:00am on 27 June 2019 at the Oriental Club, Stratford
House, Stratford Place, London W1C 1ES. The notice of the Annual General Meeting (the “AGM”) is set out at the end of this document.
Resolutions at the Annual General Meeting
Resolution 1 – Receiving and Considering the Accounts
This is a resolution to receive and consider the financial statements of the Company for the period ended 31 December 2018 together with the report
of the directors and the report of the auditor thereon.
Resolution 2 – Re-appointment of Auditor
This resolution seeks to authorise the re-appointment of Crowe U.K. LLP as auditor of the Company and to authorise the Directors to determine their
remuneration.
Resolution 3 – Election of Directors
The Board recommends the election of Charles Patrick Stewart Hall who being eligible, offers himself for re-election.
Resolution 4 – Directors’ Authority to Allot Shares
This is a resolution to grant the Directors authority to allot and issue shares and grant rights to subscribe for shares in the Company for the purposes
of section 551 of the Companies Act 2006 (“Act”) up to the maximum aggregate nominal amount of £300,000. This resolution replaces any existing
authorities to issue shares in the Company and the authority under this resolution will expire at the conclusion of the next annual general meeting of
the Company.
Resolution 5 – Disapplication of Pre-emption Rights
This resolution proposes to dis-apply the statutory rights of pre-emption in respect of the allotment of equity securities for cash under section 561(1)
of the Act. This is a special resolution authorising the Directors to issue equity securities as continuing authority up to an aggregate nominal amount
of £300,000 for cash on a non pre-emptive basis pursuant to the authority conferred by Resolution 4 above.
The authority granted by this resolution will expire at the conclusion of the next annual general meeting of the Company.
Action to be taken by Shareholders
Whether or not you are able to attend the meeting, you are asked to register your proxy vote as soon as possible, but in any event, by no later than
10:00am on 25 June 2019 by logging on to www.signalshares.com and following the instructions. Alternatively, you may obtain a hard copy form of
proxy directly from our registrars Link Asset Services if required, see notes in the Notice of Annual General Meeting.
Recommendation
The Directors unanimously believe that the resolutions are in the best interests of the Company and its shareholders and unanimously recommend
you to vote in favour of the resolutions as they intend to do, with each director abstaining in respect of his election, in respect of their own beneficial
holdings which in aggregate amount to 132,655,858 Ordinary Shares, representing approximately 8.52% of the Company’s current issued ordinary
share capital of 1,557,513,577 shares as at 30 May 2019.
Yours faithfully
Charles Hall
Chairman
78
Metal Tiger plc
METAL TIGER PLC
(Registered in England No. 04196004)
NOTICE OF ANNUAL GENERAL MEETING
NOTICE is hereby given that an Annual General Meeting of Metal Tiger plc (“Company”) will be held at 10:00am on 27 June 2019 at the Oriental
Club, Stratford House, Stratford Place, London W1C 1ES for the purpose of considering and if thought fit passing the following resolutions, of which
Resolutions 1 to 4 will be proposed as ordinary resolutions and Resolution 5 as a special resolution:
ORDINARY RESOLUTIONS
Resolution 1 To receive and consider the financial statements for the period ended 31 December 2018 together with the report of the Directors and
the report of the auditor thereon.
Resolution 2 To re-appoint Crowe U.K. LLP as auditor and to authorise the Directors to determine their remuneration.
Resolution 3 To re-elect Charles Patrick Stewart Hall as a Director of the Company.
Resolution 4 That, pursuant to section 551 of the Companies Act 2006 (“the Act”) the Directors be and are hereby generally and unconditionally
authorised to exercise all powers of the Company to allot equity securities (as defined by section 560 of the Act) up to the maximum
aggregate nominal amount of £300,000 PROVIDED that the authority granted under this resolution shall lapse at the end of the next
annual general meeting of the Company to be held after the date of the passing of this resolution save that the Company shall be
entitled to make offers or agreements before the expiry of this authority which would or might require shares to be allotted or equity
securities to be granted after such expiry and the Directors shall be entitled to allot shares and grant equity securities pursuant to such
offers or agreements as if this authority had not expired, and all unexercised authorities previously granted to the Directors to allot shares
and grant equity securities be and are hereby revoked.
SPECIAL RESOLUTION
Resolution 5 That, subject to the passing of Resolution 4 above, and in accordance with section 570 of the Act, the Directors be generally
empowered to allot equity securities (as defined in section 560 of the Act) for cash pursuant to the authority conferred by Resolution 4
or by way of a sale of treasury shares, as if section 561(1) of the Act did not apply to any such allotment, provided that this power shall be
limited to the allotment of equity securities:
(a)
in connection with an offer of equity securities to the holders of Ordinary Shares in proportion (as nearly as may be practicable) to
their respective holdings; and to holders of other equity securities as required by the rights of those securities or as the Directors
otherwise consider necessary, but subject to such exclusions or arrangements as the Directors may deem necessary or expedient
in relation to the treasury shares, fractional entitlements, record dates, arising out of any legal or practical problems under the laws
of any overseas territory or the requirements of any regulatory body or stock exchange; and
(b)
(otherwise than pursuant to sub paragraph (a) above) up to an aggregate nominal amount of £300,000 in addition to existing authorities;
and provided that this power shall expire on the conclusion of the next Annual General Meeting (unless renewed, varied or revoked by
the Company prior to or on that date) save that the Company may, before such expiry, make offer(s) or agreement(s) which would or
might require equity securities to be allotted after such expiry and the Directors may allot equity securities in pursuance of any such
offers or agreements notwithstanding that the power conferred by this resolution has expired.
BY ORDER OF THE BOARD
Malcolm Bacchus
Company Secretary
30 May 2019
Registered office:
107 Cheapside
London
EC2V 6DN
79
Annual Report & Accounts | 2018
Notes:
Appointment of proxies
1
2
3
4
5
6
7
8
9
10
A member entitled to attend and vote at the meeting may appoint one or more proxies to exercise all or any of the member’s rights to attend,
speak and vote at the meeting. A proxy need not be a member of the Company but must attend the meeting for the member’s vote to be
counted. If a member appoints more than one proxy to attend the meeting, each proxy must be appointed to exercise the rights attached to a
different share or shares held by the member. If a member wishes to appoint more than one proxy they may do so at www.signalshares.com.
To be effective, the proxy vote must be submitted at www.signalshares.com so as to have been received by the Company’s Registrar not less than
48 hours (excluding weekends and public holidays) before the time appointed for the meeting or any adjournment of it. By registering on the
Signal shares portal at www.signalshares.com, you can manage your shareholding, including:
- cast your vote;
- change your dividend payment instruction;
- update your address;
- select your communication preference.
Any power of attorney or other authority under which the proxy is submitted must be returned to the Company’s Registrars, Link Asset Services, PXS1,
34 Beckenham Road, Beckenham, Kent, BR3 4ZF. If a paper form of proxy is requested from the registrar, it should be completed and returned to Link
Asset Services, PXS1, 34 Beckenham Road, Beckenham, Kent, BR3 4ZF to be received not less than 48 hours before the time of the meeting.
Pursuant to Regulation 41(1) of the Uncertificated Securities Regulations 2001 (as amended), the Company has specified that only those members
registered on the register of members of the Company at close of business on 25 June 2019 (the Specified Time) (or, if the meeting is adjourned to a
time more than 48 hours after the Specified Time, by close of business on the day which is two days prior to the time of the adjourned meeting) shall
be entitled to attend and vote at the meeting in respect of the number of shares registered in their name at that time. If the meeting is adjourned to a
time not more than 48 hours after the Specified Time, that time will also apply for the purpose of determining the entitlement of members to attend
and vote (and for the purposes of determining the number of votes they may cast) at the adjourned meeting. Changes to the register of members after
the relevant deadline shall be disregarded in determining the rights of any person to attend and vote at the meeting.
CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so for the meeting
and any adjournment(s) thereof by using the procedures described in the CREST Manual. CREST personal members or other CREST sponsored
members, and those CREST members who have appointed a voting service provider(s), should refer to their CREST sponsor or voting service
provider(s), who will be able to take the appropriate action on their behalf.
In order for a proxy appointment or instruction made using the CREST service to be valid, the appropriate CREST message (a CREST Proxy
Instruction) must be properly authenticated in accordance with Euroclear UK & Ireland Limited’s specifications and must contain the information
required for such instruction, as described in the CREST Manual (available via www.euroclear.com/CREST). The message, regardless of whether it
constitutes the appointment of a proxy, or is an amendment to the instruction given to a previously appointed proxy must, in order to be valid, be
transmitted so as to be received by the Company’s Registrar (ID: RA10) by the latest time(s) for receipt of proxy appointments specified in Note 3
above. For this purpose, the time of receipt will be taken to be the time (as determined by the time stamp applied to the message by the CREST
Application Host) from which the issuer’s agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this
time, any change of instructions to proxies appointed through CREST should be communicated to the appointee through other means.
CREST members and, where applicable, their CREST sponsors or voting service providers should note that Euroclear UK & Ireland Limited does not
make available special procedures in CREST for any particular messages. Normal system timings and limitations will therefore apply in relation to the
input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal
member or sponsored member or has appointed a voting service provider(s), to procure that his CREST sponsor or voting service provider(s) take(s))
such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. In this connection,
CREST members and, where applicable, their CREST sponsors or voting service providers are referred, in particular, to those sections of the CREST
Manual concerning practical limitations of the CREST system and timings (www.euroclear.com/CREST).
The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities
Regulations 2001 (as amended).
Any corporation which is a member can appoint one or more corporate representatives who may exercise on its behalf all of its powers as a
member provided that they do not do so in relation to the same shares.
Any electronic address provided either in this Notice or in any related documents (including the Form of Proxy) may not be used to communicate
with the Company for any purposes other than those expressly stated.
If you need help with voting on-line, or require a paper proxy form, please contact the Company’s Registrar, Link Asset Services, by email at
enquiries@linkgroup.co.uk or you may call Link on 0871 664 0391 if calling from the UK or +44 (0) 371 664 0391 if calling from outside of the UK.
The Link Asset Services office is open between 9:00am–5:30pm, Monday to Friday excluding public holidays in England and Wales. Submission of
a Proxy vote shall not preclude a member from attending and voting in person at the meeting in respect of which the proxy is appointed or at any
adjournment thereof.
Total Voting Rights
11
As at 30 May 2019, being the last practicable date before dispatch of this notice, the Company’s issued share capital comprised 1,557,513,577
Ordinary Shares of £0.0001 each. Each ordinary share carries the right to one vote at an annual general meeting of the Company and, therefore,
the total number of voting rights in the Company as at 30 May 2019 is 1,557,513,577.
80
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Metal Tiger plc