TIDMMTR 
 
 

Metal Tiger plc

 

("Metal Tiger" or the "Company")

 

Unaudited Interim Results for the six months ended 30 June 2022

 

Metal Tiger plc (AIM: MTR, ASX:MTR), the AIM and ASX listed investor in natural resource opportunities, is pleased to announce interim results for the six months ended 30 June 2022. The interim accounts are unaudited but have been subject to a review by the Group's auditors.

 

Key Highlights:

 

Six months to 30 June 2022

   -- Agreement to sell 49% of Kalahari Metals Limited Limited to Cobre Limited 
      ("Cobre") for consideration of up to GBP1.5 million with an initial cash 
      payment of GBP750,000 for 24.5% subject to certain conditions including 
      approval by Cobre shareholders. The proposed transaction necessitated a 
      write down of GBP423,000 but allows for consolidation of the project 
      under one entity and prevents Metal Tiger from needing to fund joint 
      venture costs directly. 
 
   -- GBP2.2m invested in 7 new passive investments and also completed 7 
      follow-on passive investments. Fully exited from 17 passive investments 
      and partially exited 10 passive investments. 
 
   -- Notable passive investments in the period include C$561,000 into Max 
      Resources Limited (TSXV:MAX) as well as A$250,000 into Helix Resources 
      Limited (ASX:HLX). 
 
   -- Reduced leverage and risk by advance paying down A$2.91 million 
      (c.GBP1.6million) of the SC Lowy loan over the period. 
 
   -- Sandfire reported an updated Measured, Indicated and Inferred Mineral 
      Resource Estimate for the 4.7Mtpa MATSA Mining Operations bringing the 
      global resource to 147.2Mt at 1.4% Cu, 3.0% Zn, 1.0% Pb and 39.6g/t Ag 
      containing an estimated 2.1Mt of copper, 4.4Mt of Zinc, 1.5Mt of lead and 
      187.6Moz of silver. The Measured & Indicated Resource increased by 14% 
      after mining depletion to 109.0Mt at 1.5% Cu and 3.2% Zn for 1.6Mt of 
      contained copper and 3.5Mt of contained zinc with an estimated Net 
      Smelter Return ("NSR") of US$130.86/t (using an NSR cut-off). 
 
   -- For the financial year 2022, MATSA produced 30,628t of Copper, 38,907t of 
      Zinc, 4,102t of Lead and circa 1.2Moz of silver at a C1 unit cost of 
      US$45. 
 
   -- As noted in Sandfire's June 2022 quarterly report, development at Motheo 
      is proceeding on schedule with first production expected in the June 2023 
      Quarter. Sandfire has guided a 9.5% upwards revision in the project's 
      capital costs. In the quarter to September 2022, the Definitive 
      Feasibility Study on the 5.2Mtpa Expansion is due for completion and the 
      Environmental-Social Impact Assessment (ESIA) is scheduled to be 
      submitted to the DEA. Drilling of the A4 Deposit dewatering bores is 
      approximately 30% complete and fabrication of the only long-lead delivery 
      plant equipment required for plant expansion, a 4.5MW Ball Mill is well 
      advanced with delivery on schedule for the quarter to December 2022. 
 
   -- Drilling is ongoing at A1, a prospect located 19km north-east of the 
      Motheo Copper Mine with a single diamond drill rig and a total of eight 
      holes completed by the end of the quarter to June 2022. Six 1.4km long 
      Induced Polarisation (IP) surveys were completed at A1 which have 
      delineated two anomalous chargeable zones that extend across the survey 
      area, which are the focus of drilling. Metal Tiger's 2% NSR covers the A1 
      prospect. 
 
   -- Dividend received from Sandfire Resources Limited ("Sandfire") (ASX:SFR) 
      of GBP146,000 and GBP49,000 used to lower the amount payable by the 
      Company under the Equity Collar Derivative Facility. 
 

Post period end

   -- Cobre Limited has announced several significant copper intersections 
      establishing substantial potential over 4km of strike at the Ngami 
      Project in the Kalahari Copperbelt. As at 26 August, Cobre's share price 
      closed at A$0.565 meaning that post completion of the fundraising in 
      which Metal Tiger maintained its pro-rata position the value of Metal 
      Tiger's investment is A$25.2 million. 
 
   -- Sandfire is working towards an optimised 5-year plan for MATSA 
      underpinned by a safety improvement plan, a programme to improve mine 
      productivity and expand throughput beyond 4.7Mtpa, near mine mineral 
      resource extensions at existing mines as well as an expansive exploration 
      programme. 
 
   -- Sandfire's group cash on hand as at 30 June 2022 totalled US$463 million. 
      Sandfire is due to repay US$138 million under its project financing 
      facility and US$138 million under its ANZ corporate facility during 
      September 2022. This will reduce Sandfire's debt position to circa US$532 
      million substantially reducing the overall leverage of the Sandfire 
      group. 
 
   -- Sandfire is due to announce a targeted project facility financing, and it 
      is noted that selection of banks is complete with documentation well 
      advanced and final credit approval processes pending. 
 
   -- Armada Exploration commenced a ground-based Natural Source 
      Audio-Magnetotelluric ("NSAMT") survey at the Nyanga project. NSAMT 
      systems calculate ground resistivity by measuring the magnitude of 
      naturally occurring electric and magnetic fields. Resistivity values are 
      calculated from these measurements and used to create 2D and 3D images of 
      the subsurface. Magmatic sulphide accumulations are defined by extremely 
      low resistivity values. The results of this campaign will likely be used 
      to help guide the next drilling campaign. 
 
   -- The Company made passive investments totalling GBP392,000 into three 
      companies post period end. 
 

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

 
Metal Tiger plc 
Michael McNeilly (Chief Executive Officer)    Tel: +44(0)20 3287 5349 
Mark Potter (Chief Investment Officer) 
 
Strand Hanson (Nominated Adviser) 
James Dance                                   Tel: +44 (0)20 7409 3494 
James Harris 
 Robert Collins 
 
Arden Partners plc (Broker) 
Simon Johnson                                 Tel: +44 (0)20 7614 5900 
Steve Douglas 
 
Camarco (Financial PR) 
Gordon Poole                                  Tel: +44 (0)20 3757 4980 
James Crothers 
Rebecca Waterworth 
 

Notes to Editors:

 

Metal Tiger plc is admitted to the AIM market of the London Stock Exchange AIM Market ("AIM") and the ASX Market of the Australian Securities Exchange Market ("ASX") with the trading code MTR and invests in high potential mineral projects with a base, precious and strategic metals focus.

 

The Company's target is to deliver a high return for shareholders by investing in significantly undervalued and/or high potential opportunities in the mineral exploration and development sector. Metal Tiger has two investment divisions: Equity Investments and Project Investments.

 

Equity Investments invests in undervalued natural resource companies. The majority of its investments are listed on AIM, the TSX and the ASX, which includes its interest in Sandfire Resources Limited (ASX: SFR). The Company also considers selective opportunities to invest in private natural resource companies, typically where there is an identifiable path to IPO. Through the trading of equities and warrants, Metal Tiger seeks to generate cash for investment for the Project Investments division.

 

The Company actively assesses new investment opportunities on an on-going basis and has access to a diverse pipeline of new opportunities in the natural resources and mining sectors. For pipeline opportunities deemed sufficiently attractive, Metal Tiger may invest in the project or entity by buying publicly listed shares, by financing privately and/or by entering into a joint venture.

 

Key Performance Indicators

 
                                                     Audited for 
                      Unaudited for   Unaudited for  the year 
                      the six months  the six        ended 31 
                      ended 30 June   months ended   December                        Change* 
                      2022            30 June 2021   2021           Change*           % 
Total comprehensive 
 (loss)/profit 
 attributable to 
 owners of the 
 parent               (GBP9,842,000)  (GBP471,000)   GBP4,579,000   (GBP9,371,000)   (1990)% 
Net asset value       GBP29,024,000   GBP31,285,000  GBP38,822,000  (GBP2,261,000)   (7)% 
Net asset value per 
 share *              17.1p           20.1p          22.9p          (3.0p)           (15)% 
Closing share price   15.00p          25.5p          20.5p          (10.5p)          (41)% 
Share price 
 premium/(discount) 
 to net asset 
 value*               -14%            27%            -10% 
Market 
 capitalisation       GBP25,414,000   GBP39,757,000  GBP34,732,000  (GBP14,343,000)  (36)% 
Shares in issue at 
 the end of the 
 year                 169,423,576     155,910,062    169,423,576    13,513,514       9% 
 

* Based on shares in issue at the end of the reporting period and changes are calculated versus the six months ended 30 June 2021.

 

Commentary

 

The first half of 2022 was a challenging six months for Metal Tiger given very difficult market conditions caused by a variety of factors but, notably, run-away inflation pushing up costs (especially energy), rising interest rates, negative market sentiment, a significant market sell off, the war in Ukraine, continued difficulties with COVID-19 restrictions in China, supply chain disruptions and increasing geopolitical tensions between the East and the West. Commodities across the board fell substantially from the beginning of the year with copper falling to around US$3.60/lb from an inter-period high of US$4.90/lb. Nevertheless, the Board remains very confident of the medium to long term macro picture for commodity prices, especially those critical for the energy transition.

 

In the first half of 2022, the largest commodity exposure through its project and equity investments was to Copper and Gold. Gold spiked out of its range from circa US$1,800/oz to north of US$2,000/oz before ending the period close to US$1,800/oz in light of rising interest rates and a strong US$. The first half of the year saw a surge in Lithium prices which more than doubled in the period and were seven times higher than at the start of 2021. No doubt, Russia's invasion of Ukraine has created further pressures on minerals critical for the energy transition, since Russia supplies 20% of global high-purity nickel. Whilst Metal Tiger did not have significant exposure to Lithium stocks, the surge helped support the price of Red Dirt Metals, which the Company fully exited during the period bringing in cash proceeds of GBP561,000. The Company was fortuitous in that it sold a large portion of its equity holdings prior to the market crashing in order to finance private company Andean Copper Inc. in which the Company invested US$1.2 million over two rounds of financing. Unfortunately, Andean Copper Inc. was unsuccessful in its attempts to acquire a distressed copper asset in Peru and the funds were subsequently returned in full to Metal Tiger in July 2022.

 

Having failed to deliver on planned drilling at Maria Cecilia the Company partially exited Camino Minerals Corp during the period and has subsequently completely exited the position. Metal Tiger invested C$210,000 in Max Resources at C$0.6 per unit and subsequently invested a further C$351,000 at C$0.26 per unit. In spite of the recent change in the political landscape in Colombia, the Company is very excited by the discovery potential of Max Resources given the high-grade channel sampling and scale potential.

 

In large part thanks to the Company's strong and liquid balance sheet, the Company was able to manage and survive the market crash, in particular its leveraged Sandfire position, with some rapid decision making by management. Unfortunately, this resulted in a loss of GBP9.65 million for the six months ending June 2022. This was largely driven by loss taking and substantial decreases in the valuations of the Active investment portfolio, being Cobre Limited, Armada Metals Limited and Southern Gold Limited ("Southern Gold") as well as Metal Tiger's largest single equity position, Sandfire Resources Limited ("Sandfire"). The Company was forced to take urgent measures to reduce its risk exposure against the margin lending facility several times but was able to successfully de-risk the position whilst allowing the Company to maintain upside potential in what the Company internal financial models show to be fundamentally undervalued. At the end of the period, the principal amounts owed by the Company in respect of the Margin Lending Facility were reduced from A$9 million to circa A$6.160 million.

 

Overall, the Company is impressed by the progress that Sandfire has made with respect to operational improvements at MATSA as well as the progress of the development of the Motheo copper mine. It is our firm belief that, given Sandfire's robust cash position, production and margin profile, as well as hedging against commodity prices in respect of circa one third of metal production at MATSA, will allow them to meet their debt payment obligations and substantially grow their equity value as they proceed to bring Motheo into production during 2023. In particular, we note the impressive update to the mineral resource at MATSA, which showed a Global Measured, Indicated and Inferred Mineral Resource estimate for MATSA of 147.2Mt at 1.4% Cu, 3.0% Zn, 1.0% Pb and 39.6g/t Ag containing an estimated 2.1Mt of copper, 4.4Mt of zinc, 1.5Mt of lead and 187.6Moz of silver. We further note from Sandfire's recent June 2022 quarterly report, that Sandfire is undertaking an extensive exploration programme which ramped up during Q2 2022 targeting both immediate extensions of existing deposits and new discoveries in the surrounding region. On the other hand, mining at DeGrussa is expected to end in September 2022, with processing planned to wind up in October. We note however that Sandfire is continuing to investigate the potential extension of operations through processing of existing stockpiles and mineralised waste on site using the existing plant. Most importantly, we note that Sandfire have managed to maintain the project schedule for the development at Motheo with first production expected in the quarter to June 2023. Sandfire has guided to an upwards 9.5% revision in the project's capital costs, due mainly to increased fuel and mining costs, with further information to follow on this as part of the DFS on the 5.2Mtpa Expansion, which is due for completion in the quarter to September 2022. Sandfire is well placed to make first repayment due under the MATSA facility of US$118 million at the end of September 2022, together with repayment of their US$138 million ANZ corporate facility in Australia.

 

Furthermore, we notice increased activity at Sandfire's A1 prospect from our observations of satellite imagery and we patiently await an update on drilling at A1 which has the potential to be a significant step change with regard to the valuation of the Company's 2% NSR. Furthermore, we anticipate that Sandfire will commence an infill drilling and extensional drilling campaign at the A4 deposit, which has the potential to increase contained copper tonnage.

 

On 16 June 2022, the Company announced a deal to sell its 49% interest in Kalahari Metals Limited ("KML") to Cobre Limited. This deal removed any further funding obligations from Metal Tiger and provided a pathway for Cobre to assume 100% ownership of Kalahari Metals. Further details of this disposal and the impact on the accounts are included in the project's investment section and results for the period section. It is anticipated that GBP750,000 will be paid for the initial acquisition of 24.5% in September 2022. This will likely be netted off against Metal Tiger's recent A$1.47 million investment in Cobre's A$7 million fundraise at 15c announced in August 2022. Since Metal Tiger's disposal, Cobre has made a discovery in Botswana and their share price at close of business on 26 August 2022 was A$0.565 valuing Metal Tiger's holding post the recent conditional investment at A$25.2 million. The Board notes that, in their opinion, this deal provides MTR with exposure to Kalahari Metals, via its 21% holding in Cobre, in a way that is non-dilutive to MTR shareholders. Cobre has demonstrated an ability to access substantial funding and given their strong relationship with Canaccord (who brokered the recent equity fundraising for Cobre) means that Cobre should be able to not only fund an aggressive drill-out of the discovery at the Ngami Project area but also look to make additional discoveries at the Kitlanya West Project area and the Okavango Project area.

 

Armada Metals Limited ("Armada") completed its Phase 1 drilling programme, comprising ten diamond holes for 3,240 metres. Whilst no economic discovery was found from the first phase of drilling, magmatic sulphide mineralisation was intersected in all ten diamond drill holes at the Libonga North, Matchiti Central and Libonga South targets along the Libonga-Matchiti Trend. Detailed core logging has confirmed the trend is a dynamic, multi-phased magma conduit system. Post period end, the company announced that it had commenced a ground-based NSAMT survey which will help to identify further drill targets.

 

Southern Gold during the period appointed Exploration Manager, Robert Smillie as Managing Director and CEO. Based in South Korea he has overseen an ambitious project generation campaign with field work resulting in 29 new licence applications, increasing exploration licences under application to 138 covering an area of 382km(2) . A sale of 50 million Bluebird Merchant Ventures (LSE:BMV) shares brought in proceeds of GBP250,000. As at 30 June 2022, the company had A$4.6 million of cash and their mark-to-market valuation of BMV shares was worth approximately A$5.3 million. The Board believes that the extensive application package and diligent project generation work will lead itself to several interesting target areas being prioritised for drilling in due course, setting up what could be a very appealing country consolidation play, pending proof of concept through drilling. Whilst the company will not be seeking to make any further active investments, we are pleased to note Cobre's recent success and believe that this goes a long way to helping validate the logic behind the Active investment strategy. Indeed, whilst not directly comparable as a result of commodity, country and deposit type, all three investments share similarities in terms of their district/country scale potential.

 

Finally, Metal Tiger undertook steps in the first half of the year to explore options and identify solutions that will potentially allow for the correct regulatory status to be applied to Metal Tiger and one which would be suitable to its classification as an investing company. Assuming favourable clarification of our regulatory status, we will explore UK listing options that would potentially be a better fit for the Company's operational and investing capabilities as well as potentially reduce annual administrative costs. The Company has engaged Simmons & Simmons as legal counsel to assist in these matters and will update the market in due course as appropriate.

 

Project Investments

 

The Project Investments segment includes investments into mineral exploration and development projects either through subsidiaries, associates, or joint venture companies, operated by in-country partners who have the requisite knowledge and expertise to advance projects. Following completion of the disposal of Kalahari Metals Limited, this will mark the end of the Project Investment division. The Company will manage any legacy investments within this division as appropriate but will not seek to make further Project Investments where Metal Tiger as a corporate entity must contribute either solely or as a joint venture partner to exploration expenditure.

 

Botswana - Kalahari Metals Limited

 

On 16 June 2022, Metal Tiger announced that it had entered into a Share Purchase Deed with Cobre to dispose of up to all of its 49% interest in Kalahari Metals Limited ("KML").

   -- Cobre (or its nominee) will acquire 24.5% of the shares in KML from Metal 
      Tiger (increasing its interest to 75.5%) for total cash consideration of 
      GBP750,000 (the "Initial Acquisition") expected to be payable in 
      September 2022, which MTR will use for general working capital purposes; 
 
   -- Metal Tiger will grant Cobre a call option for it or its nominee to 
      acquire the remaining 24.5% of Metal Tiger's shares in KML, exercisable 
      for either GBP750,000 cash or the equivalent in Cobre shares (based on a 
      90-trading day VWAP), (the "Call Option") at the sole election of Cobre, 
      providing Cobre a pathway to 100% ownership of KML; 
 
   -- The Call Option will lapse 12 months after completion of the Initial 
      Acquisition, and if not exercised by Cobre, Metal Tiger will remain a 
      24.5% shareholder in KML; and 
 
   -- Metal Tiger will retain certain rights in KML until such time as the Call 
      Option has been exercised. 
 

The transaction, including the Initial Acquisition, is subject to certain conditions:

   -- Cobre shareholder approval to the Transaction for the purposes of ASX 
      Listing Rule 10.1 and item 7 of section 611 of the Corporations Act 2001 
      (Cth), to be sought at a general meeting of Cobre shareholders 
      anticipated to be held in September 2022; 
 
   -- an Independent Expert Report concluding that the Transaction is fair and 
      reasonable to Cobre's shareholders; 
 
   -- no legal or government agency restraints preventing the Transaction; and 
 
   -- the obtaining of any required approvals to the Transaction by government 
      agencies in Botswana. 
 

Transaction summary:

 

The parties have agreed to temporarily amend the terms of the existing Shareholders Deed and Loan Agreements between KML, Metal Tiger, Cobre and Cobre Kalahari Pty Ltd ("Cobre Kalahari"). For the period until the earlier of termination of the Transaction, or 12 months following completion of the Initial Acquisition:

   -- Cobre Kalahari will have sole control regarding the adoption, approval 
      and variation of KML's Business Plan and Budget, and KML's activities 
      will be conducted in accordance with that Business Plan and Budget; 
 
   -- MTR waives its rights and is released from its obligations in relation to 
      the Business Plan and Budget; 
 
   -- Cobre Kalahari will be solely responsible for contributing any capital 
      and funding requirements of the Company pursuant to the Business Plan and 
      Budget, and any such funding during the initial 12-month period will be 
      provided in a manner that is non-dilutive to Metal Tiger's interest and 
      will not otherwise impact the Shareholders Deed; 
 
   -- Metal Tiger's two nominee Directors will resign from the Board of KML 
      effective immediately, and Metal Tiger will waive the right to appoint 
      Directors; 
 
   -- Certain KML board matters will continue to require approval by Metal 
      Tiger (or its representatives) on the basis that Metal Tiger will have 
      voting power equivalent to two directors (with Cobre representatives 
      constituting the remaining two directors) in considering such matters; 
 
   -- In the event that the Call Option is not exercised before its expiry, the 
      parties will promptly amend the Shareholders Deed to restore MTR's rights 
      (including board representation rights), protections and obligations to 
      the equivalent of those which it held as a 49% shareholder in KML prior 
      to completion of the Initial Acquisition; 
 
   -- Cobre undertakes not to change, or seek to change in any way whatsoever, 
      the Group's accounting policy or practice during the 2022 and 2023 
      Financial Years; and 
 
   -- In the event that MTR receives shares by way of consideration, these will 
      be managed alongside its existing investment in the company. 
 

Shareholder Loans:

 

Metal Tiger currently has circa US$1.3 million in outstanding Shareholder Loans to Kalahari Metals Limited. The Loan Agreement has been amended such that, on completion of the Initial Acquisition, Cobre will guarantee KML's obligation to repay the outstanding Shareholder Loans, plus any interest accruing at a rate of 7% per annum. The Shareholder Loan is for a 5-year period with an automatic extension for an additional 5 years in the event that no JORC(1) compliant Mineral Resource declaration over any of KML's tenements (or indeed by a third-party in the event of a Farm-in) has been made within the initial 5-year period. The Loan can be repaid in cash or shares at any time by Cobre, at Cobre's sole election, and is only required to be repaid early if certain exit events occur (being a JORC Mineral Resource declaration, the occurrence of mining production, an initial public offering ("IPO") of KML, Cobre's disposal of 75% or more of it shares in KML, an asset sale, or a change of control of Cobre). The Shareholder Loan may, at Cobre's election, be cash or in Cobre shares, based on a 90-trading day VWAP.

 

Thailand

 

Metal Tiger retains twelve exploration licence applications in Thailand which have been fully progressed at the relevant permitting body, the Department of Primary Industries and Mines and, to the Company's knowledge as at the date of this announcement, remain in good standing. Should these exploration licence applications be granted, and confirmation of such is awaited, the Board will consider whether or not to pursue appropriate exploration programmes in Thailand.

 

Equity Investments

 

The Equity Investments segment continues to invest in high potential mining exploration and development companies with a preference for base and precious metals. 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. To differentiate between the Board's view of the Company's strategy we categorise certain investments as either Active or Passive.

 

Active investments are typically larger investments where Metal Tiger seeks to positively influence the management of investee companies, by providing oversight and guidance at Board level to enhance shareholder value and minimise downside risk.

 

Metal Tiger invests in listed mining equities via either pre-IPO, IPO, placings, or direct on-market purchases. Metal Tiger may receive warrants when undertaking investments in pre-IPO, IPOs, or Placings. The Company may consider other investment structures. The main aim is to make capital gains in the short to medium term. Investments are considered individually based on a variety of criteria. Investments are typically stock exchange traded on the TSX, ASX, AIM or LSE(2) but can be private with a view to obtaining a liquidity event.

 

As at 30 June 2022, as set out in the table below, Metal Tiger had equity investments in companies pursuing high potential exploration and development projects in precious, base and battery metals. Projects are located in a variety of jurisdictions, including North America, South America, Africa, Southeast Asia and Australia. Metal Tiger held some exposure to producers.

 

Through its investments, Metal Tiger is primarily exposed to copper and gold.

 

In early 2022, the copper price was supported by strong demand, continued supportive financial conditions, low levels of refined stocks and limited mine supply growth. The copper price reached a record high of US$10,845/t in March 2022. However, the onset of the war in Ukraine, the start of fiscal tightening measures in the US and COVID-19 outbreaks in China, followed by concerns over decelerating consumption growth in North America and Europe, increased economic uncertainty over the outlook for China, and continued strong US dollar appreciation, caused investor speculative positioning in copper to move from net-long to net-short. Copper prices deteriorated rapidly through the latter part of H1 2022, ending the period at US$8,258/t, having averaged US$9,759/t over the half, with further declines being experienced post the period end.

 

During the period, the gold price remained relatively robust, beginning the period at US$1,805/oz (1 January 2022) and ending the period at US$1,817/oz (30 June 2022). Gold prices spiked at the onset of war in the Ukraine, reaching over US$2,000/oz. The gold price has declined post period end as a result of more restrictive monetary policy in the US and Europe and the resultant increases in interest rates, however, the gold price remains well supported above US$1,700/oz as a result of continued global inflationary pressures and geopolitical uncertainty. Metal Tiger continues to deliver on identifying high conviction natural resource opportunities in line with its investment approach. Whilst the Company continued to largely focus on undervalued investment situations with the potential for substantial exploration upside, we still managed to maintain a strong level of diversification in the Passive Investment portfolio in terms of commodity, jurisdiction, and project development stage. In addition, Metal Tiger has managed to increase its

warrant portfolio through investment in the period. No new Active Investment was made in period.

 

Summary of listed investments held at 30 June 2022

 
                                                                    Value at 
               Listing                                              period end 
Investment     Exchange    Description   No. of securities held     GBP 
                           Copper, gold 
Sandfire                    and silver   4,164,286 ordinary shares 
 Resources                  mining and    (held as collateral for 
 Limited       ASX          exploration   collateral loan)          10,508,971 
   2,842,667 ordinary shares (held as security in structured 
    finance loan)                                                   7,173,740 
   80,104 ordinary shares (uncharged)                               202,150 
                           Gold mining 
Southern Gold               and          40,794,000 ordinary 
 Limited       ASX          exploration   shares                    694,028 
   7,284,500 unlisted warrants 
    (A$0.18 expiry 19/10/2022)                                      1 
                           Base metal    34,764,096 ordinary 
Cobre Limited  ASX          exploration   shares                    512,583 
Armada                     Nickel and 
 Exploration                copper       15,000,000 ordinary 
 Limited       ASX          exploration   shares                    510,390 
   3,333,333 unlisted warrants 
    (A$0.334 expiry 22/11/2026)                                     37,334 
Max Resource               Copper 
 Corporation*  TSXV         exploration  1,700,000 ordinary shares  467,621 
   675,000 unlisted warrants 
    (C$0.36, 25/03/2024)                                            109,072 
   350,000 unlisted warrants 
    (C$0.85, 17/05/2023)                                            26,180 
Sable                      Gold and 
 Resources                  silver 
 Limited*      TSXV         exploration  2,041,666 ordinary shares  306,923 
                           Graphite 
Northern                    producer 
 Graphite                   and 
 Corporation*  TSXV         exploration  660,000 ordinary shares    261,765 
   330,000 unlisted warrants 
    (C$1.10 expiry 08/2/2024)                                       40,002 
Heavy                      Mineral 
 Minerals                   Sands 
 Limited       ASX          exploration  1,886,401 ordinary shares  200,048 
Helix 
 Resources                 Copper        20,833,333 ordinary 
 Limited*      ASX          exploration   shares                    82,702 
Anacortes                  Copper and 
 Mining                     gold 
 Corp.         TSVX         exploration  104,933 ordinary shares    59,742 
   104,167 unlisted warrants 
    (C$3.3 expiry 22/7/2023)                                        1,700 
Canyon 
 Resources                 Bauxite 
 Limited*      TSVX         development  2,383,817 ordinary shares  59,482 
Camino 
 Minerals                  Copper 
 Corp.         TSXV         exploration  1,432,000 ordinary shares  45,803 
   2,941,176 unlisted warrants 
    (C$0.25 expiry 18/5/2023)                                       7,770 
                           Rare Earth 
Rainbow Rare                exploration 
 Earths                     and 
 Limited       AIM          development  300,000 ordinary shares    37,125 
Red Dirt                   Lithium, 
 Metals                     Gold 
 Limited*      ASX          exploration  77,484 ordinary shares     17,576 
Greentech 
 Metals                    Nickel 
 Limited       ASX          exploration  100,000 ordinary shares    14,745 
Mt. Malcolm                Gold 
 Mines NL      ASX          exploration  396,970 ordinary shares    12,832 
Cannon 
 Resources                 Nickel        83,333 unlisted warrants 
 Limited*      ASX          exploration   (A$0.2 expiry 30/6/2024)  10,755 
Pearl Gull 
 Iron                      Iron Ore 
 Limited       ASX          exploration  308,026 ordinary shares    6,987 
   550,000 unlisted warrants 
    (A$0.3 expiry 6/9/2024)                                         3,921 
                           Copper, gold 
                            and cobalt 
Artemis                     exploration 
 Resources                  and 
 Limited       ASX          development  200,000 ordinary shares    3,062 
Marimaca 
 Copper                    Copper        70,978 unlisted warrants 
 Corp.         TSXV         exploration   (C$4.1 expiry 31/12/2022  3,047 
                           Molyhil       5,769,231 unlisted 
Thor Mining                 Tungsten      warrants (1.3p expiry 
 plc           AIM/ASX      Project       17/08/2023)               2,197 
   1,100,000 unlisted warrants 
    (A$0.015 expiry 17/12/2022)                                     936 
   12,500,000 unlisted warrants 
    (1p expiry 23/10/2022)                                          56 
Inflection                 Copper and 
 Resources                  gold         234,375 unlisted warrants 
 Limited       CSE          exploration   (C$0.5 expiry 14/5/2023)  757 
                           Copper and 
Avidian Gold                gold         500,000 unlisted warrants 
 Corp          TSXV         exploration   (C$0.2 expiry 8/6/2024)   617 
                           Nickel and    170,000 unlisted warrants 
Palladium One               copper        (C$0.45 expiry 
 Mining Inc.   TSXV         exploration   22/2/2023)                136 
Apollo Gold                Gold and      110,000 unlisted warrants 
 and Silver                 silver        (C$1.25 expiry 
 Corporation   TSXV         exploration   05/7/2023)                89 
Aurelius 
 Minerals                  Gold          100,000 unlisted warrants 
 Inc.          TSXV         exploration   (C$0.7 expiry 15/7/2022)  1 
 

*Denotes new additions to the portfolio during the period.

 

Summary of unlisted investments held at 30 June 2022

 
                                              No. of 
                 Listing                      securities       Value at 
Investment        Exchange   Description      held              period end GBP 
                                              66,666,667 
Andean Copper                                  ordinary 
 Inc*            Private     Copper producer   shares          1,648,600 
                                              500,000 
Moxico                                         ordinary 
 Resources PLC   Private     Copper producer   shares          250,000 
                                              3,840,909 
                                               ordinary 
Tally Limited    Private     Gold currency     shares          57,614 
                                              250,000 
ACDC Metals                  Rare earths       ordinary 
 Limited         Private      exploration      shares          14,178 
                                               854,545 
Eridge Capital                                  ordinary 
 Limited         Private                        shares         512 
 

*Denotes new additions to the portfolio during the period.

 

Summary of investments made between 30 June 2022 and the date of release of the Interim Report

 
                                              No. of 
                 Listing                      securities       Amount invested 
Investment        Exchange   Description      held              period end GBP 
                             Gold, silver 
                              exploration     93,000 ordinary 
O3 Mining Inc*   TSXV         development      shares          96,795 
                             Gold, copper 
                              exploration     7,000,000 
Antilles Gold                 and              ordinary 
 Limited*        ASX          development      shares          200,760 
   2,333,333 unlisted warrants 
    (C$1.10 expiry 08/2/2024) 
 

*Denotes new additions to the portfolio during the period.

 

During the period the Company also converted 694,444 warrants in Pan Global Resources Inc into 694,444 shares which were all disposed of during the reporting period realising a profit of approximately GBP97,000. The company also purchased 6,000,000 ordinary shares in Alien Metals Limited during the period which has been fully exited for a loss of GBP9,000.

 

During the period the segment acquired investments at a total cost of GBP3,308,000 and disposed of investments for GBP6,348,000 and a realised loss of GBP318,000. After considering the revaluation of the investments the net assets of the segment decreased by GBP11,616,000 during the period to GBP24,028,000 (full year 2021: GBP35,644,000).

 

After accounting for the loss on disposals, dividends received and the revaluation of investments at the year end, the equity investments segment recorded a net loss of GBP9,782,000 for the year versus profits of (H1 GBP1,751,000; full year 2021 GBP3,454,000).

 

Overview of material investments as at 30 June 2022:

 

Sandfire Resources Limited

 

Sandfire is a mid-tier Australian mining and exploration company listed on the Australian Securities Exchange ("ASX") (ASX:SFR) and operates the high-margin DeGrussa Copper-Gold Mine, located 900km north of Perth in Western Australia, which produces high-quality copper-in-concentrate with significant gold credits. In addition, in 2021 (completing in 2022), Sandfire agreed to acquire 100% of the Minas de Aguas Tenidas ("MATSA"), comprising of three underground mining operations feeding a 4.7Mtpa central processing facility with state-of-the-art infrastructure in Spain, for a total consideration of US$1.865 million. Sandfire also has development and exploration projects in North America and Botswana.

 

The Company holds 7,087,057 ordinary shares in Sandfire Resources as at 30 June 2022, representing 1.7% of Sandfire's issued share capital. Metal Tiger has an Equity Option and Loan Facility Master Agreement (Financing Arrangement) with Macquarie bank that allows it to enter into certain covered derivative contracts over its equity holdings.

 

In aggregate, the financing arrangements entered by Metal Tiger are secured over 2,842,667 Sandfire shares held by Metal Tiger, representing approximately 0.7% of Sandfire's issued share capital.

 

Sandfire concluded H1 with a very strong cash position of US$463.1 million and net debt of US$324.7 million. Group FY2022 production in excess of guidance at 98,367t Cu, 38,907t Zn, 4,102 Pb, 32,285oz Au and 1.5Moz Ag. With C1 unit costs at US$1.27/lb Cu payable reflecting global inflationary cost pressures.

 

Sandfire received a strong 5-month contribution from the MATSA Copper Operations in Spain with FY2022 production exceeding guidance: 30,628t Cu, 38,907t Zn, 4,102t Pb and 1.2Moz Ag. Elevated energy costs in Spain remain a challenge and were reflected in C1 unit costs for MATSA of US$1.81/lb for the June 2022 Quarter and US$1.45/lb for FY2022. Sandfire is progressing several responses to this situation, including the planned construction of new solar farms, engaging with electricity suppliers for new contracts and investigation of other pricing structures.

 

DeGrussa is scheduled to complete in September 2022 with processing to wind up in October 2022. A detailed care and maintenance and mine closure plan have been developed. Sandfire continues to investigate the potential extension of operations through processing of existing stockpiles and mineralised waste on site using the existing plant.

 

Sandfire generated FY2022 sales revenue of US$922.7 million (unaudited) and Group EBITDA of US$448 million (unaudited).

 

The Motheo Expansion Definitive Feasibility Study ("DFS") is nearing completion, outlining a growth pathway to 5.2Mtpa and due for release in the September 2022 Quarter.

 

Updated Measured, Indicated and Inferred Mineral Resource Estimate completed for the MATSA Copper Operations: 147.2Mt at 1.4% Cu, 3.0% Zn, 1.0% Pb and 39.6g/t Ag, containing an estimated 2.1Mt of copper, 4.4Mt of zinc, 1.5Mt of lead and 187.6Moz of silver.

 

Extensive exploration is occurring at MATSA targeting both immediate extensions of existing deposits and new discoveries in the surrounding region.

 

Sandfire is well advanced and on schedule for Motheo to commence first production in the quarter to June 2023. Construction activities are continuing with over 1,700 personnel currently on site, over 7,000m(3) of concrete poured and 550 tonnes of structural steel erected to date. Some of the key recent developments include:

   -- Completion of all 752 rooms in the Motheo Mine Village 
 
   -- Award of the Electrical and Instrumentation installation contract (final 
      process plant contract) 
 
   -- Erection and back-fill of the primary crusher lower retaining wall 
 
   -- Completion of Reclaim tunnel and SAG Mill concrete foundations 
 
   -- Completion of Mine Administration Office and Clinic buildings 
 
   -- Tailings Storage Facility Bulk fill for walls 50% complete and basin 
      lining commenced 
 
   -- Majority of the process plant equipment including the SAG Mill components 
      all delivered to site during the quarter to June 2022 
 
   -- Structural, Mechanical and Piping Contractor mobilised and approximately 
      10% complete during the quarter to June 2022 
 

The DFS for the Expansion Project including A4 is scheduled for completion in the quarter to September 2022 with work programmes nearing completion.

 

Cobre Limited

 

Cobre is an ASX listed (ASX:CBE) resource exploration company which is progressing the copper-gold-silver-zinc VHMS(3) exploration stage Perrinvale Project in Western Australia. Cobre holds a 51% interest in Kalahari Metals, as well as an 18.5% interest in Armada. The Company holds 34,764,096 ordinary shares as of 30 June 2022, representing 17.2% of Cobre's issued ordinary share capital. Metal Tiger has agreed to invest an additional A$1.5 million for 9,808,076 additional shares in Cobre, subject to shareholder approval.

 

Cobre entered into an agreement with Metal Tiger to purchase its 49% stake in Kalahari Metals Limited. Further details can be found in the projects section. On 4 August 2022, the company announced a A$7 million placement in which Metal Tiger invested A$1.5 million, subject to shareholders approval, to maintain its pro-rata shareholding.

 

Kalahari Metals Limited

 

Post period end the Company announced the commencement of exploration drilling in Botswana. On the 27 July 2022, significant visual copper mineralisation was intersected in the first diamond drill hole NCP07 at the Ngami Copper Project ("NCP") in the Kalahari copperbelt with chrysocolla along with fine grained disseminated copper sulphides which occur over a broad 59m interval downhole with an increase in abundance in the lower 10m. This hole was designed 1km away along strike to test the extent of anomalous chalcocite mineralisation intersected in a historical hole proving that mineralisation increases and thickens out significantly along strike. This was followed by the second diamond drill hole intersecting copper mineralisation over a 25m interval downhole with a significant increase in chalcocite mineralisation over a 12m interval. This drill hole, NCP08 was drilled 1km southwest of NCP07 along strike. It was noted that the width and concentration of sulphide mineralisation intersected is comparable to discovery holes elsewhere in the Kalahari Copperbelt. On 3 August 2022, further copper mineralisation was intersected in ongoing drill hole NCP09, at the Ngami Copper project. Mineralisation consisted of chrysocolla, malachite and fine-grained chalcocite which occurred over a 15m interval downhole. At the time of the announcement the hole was still in progress and had intersected additional chrysocolla on fractures as well as some intense folding. NCP09 extended the strike length of mineralisation intersected in holes NCP08, NCP07 and historical hole TRDH14-16a to 3km with both south-western and north-eastern extensions remaining open-ended. NCP10 which is the fourth 1km step out hole was designed to test the north-eastern strike extension of copper mineralisation in the first three diamond holes of the programme as well as historical hole TRD14-16a. NCP10 has intersected a broad zone of visible copper mineralisation which extends over 69m (down hole) with 13m of abundant visual chalcocite mineralisation noted and confirmed with pXRF. As a result of this the target now has a strike length of over 4km.

 

On 9 August 2022, Cobre announced a 2,400m diamond drilling programme to infill the existing 1km spaced intersections at a 500-metre spacing along with selected step-out holes to establish the vertical continuity of mineralisation. On completion of the first phase of infill, and subject to results, 250m-spaced infill diamond drilling will continue with selected step-out holes for an estimated further 4,800m due to be completed by year end. It was noted that a fourth 1km diamond step out hole is currently in progress. Drill core samples from previous holes have been sent to labs. Historical low detection mobile metal-ion geochemistry (Terraleach(TM) TL1) proved highly effective in delineating soil anomalies associated with the drill confirmed mineralisation at NCP, providing an ideal targeting tool for the remaining untested circa 100km of prospective contact within the NCP licences. A selection of 5,300 historical soil samples will be sent for TL1 analysis.

 

A large 7,000 sample soil programme, covering targets in the 2,000km(2) Kitlanya West ("KITW") licences, has been commissioned and is scheduled to commence in late August 2022. This presents a cost-effective layer for further prioritising the 34 KITW targets for follow-up drill testing.

 

On 18 August 2022, Cobre Limited noted the renewal of five exploration licences held by Triprop subject to a binding earn-in agreement with Kalahari Metals Limited.

 

Perrinvale

 

Cobre was due to complete a Moving Loop Electromagnetic ("MLEM") survey at the Costa del Islas Prospect but was unable to due to high demand for contractors. The Company also advanced preparations for drilling a number of high priority drill targets identified from work completed through 2021 and prioritised during a technical workshop in 2022.

 

Cobre holds a total of 15,000,000 shares in Armada Metals comprising 14.42% of shares on issue as well as holds an option to acquire an additional 3,333,333 shares in Armada at an exercise price of A$0.334 per share.

 

Michael McNeilly, Executive Director and Chief Executive Officer of Metal Tiger, was appointed to the board of Cobre as a nominee Non-Executive Director representing Metal Tiger.

 

Southern Gold Limited

 

Southern Gold is an ASX listed resource exploration and development company with gold epithermal exploration properties in South Korea. Metal Tiger currently holds 40,794,000 shares as of 30 June 2022 representing 19.1% of the issued share capital of Southern Gold as well as 7,284,500 A$0.18 warrants expiring on 19 October 2022.

 

Michael McNeilly was appointed on 5 June 2020 as a Non-Executive Director of Southern Gold. At Southern Gold's annual general meeting held on 26 November 2020, Michael McNeilly, Executive Director and Chief Executive Officer of Metal Tiger was confirmed as a Director of Southern Gold.

 

For the H1 2022 period, the main developments at Southern Gold were:

   -- the appointment of Southern Gold Exploration Manager Robert Smillie as 
      Managing Director and CEO, based in South Korea.. 
 
   -- Project generation fieldwork in Q1 2022 resulted in 44 new licence 
      application increasing the exploration licences under application to 109, 
      covering an area of 305.4km2. 
 
   -- Sold 50 million BMV shares for A$0.9 million and received A$0.44 million 
      in Q2 making up the first half of the payment. The second half is due by 
      13 September 2022. 
 
   -- BMV where SAU retains 150 million shares accessed a funding facility to 
      progress activities towards commencement of mining in South Korea. 
 
   -- Project Generation fieldwork resulted in 29 new licence applications, 
      increasing exploration licences under application to 138 covering an area 
      of 382km2. 
 

Armada Exploration Limited

 

Armada is an ASX listed (ASX:AMM) resource exploration company established to define new belt-scale discovery opportunities for key commodities (principally nickel and copper) in under-explored regions of Africa. It currently holds two exploration licences, prospective for magmatic Ni-Cu sulphide, in Gabon, covering a total area of nearly 3,000km(2) . The licence holding is considered to present a frontier district-scale exploration opportunity.

 

The Company holds 15,000,000 ordinary shares as of 30 June 2022, representing 14.42% of Armada's issued ordinary share capital. Metal Tiger also holds an indirect interest in Armada, via its 17.2% holding in Cobre, which holds an 14.4% interest in Armada.

 

Metal Tiger also currently holds 3,333,333 five-year options, validity commencing from admission date on the ASX, issued at A$0.334.

 

Michael McNeilly was appointed as a Director to Armada Metals Limited in May 2021.

 

For the H1 2022 period, the main developments at Armada were:

   -- Renewal of exploration permit G5-555 which was renewed for a further 
      three years. 
 
   -- Completed the Phase 1 diamond drilling programme along the 
      Libonga-Matchiti Trend ("LMT") with magmatic sulphides intercepted in all 
      ten diamond drill holes. 10 holes were drilled for a total of 3,240m at 
      three high priority targets within the LMT. 
 
   -- Core logging observations confirm the LMT to be a complex, dynamic 
      multi-phased magma conduit system, with crustal contamination having 
      caused extensive sulphur saturation. 
 
   -- The core has been sent for assays for the normal magmatic suite of 
      elements, including nickel, copper, cobalt, chromium and sulphur, and the 
      platinum group elements (PGEs). 
 
   -- Surface grab samples, collected along the Ngongo-Yoyo Trend within permit 
      G5-555 have confirmed the presence of outcropping high MgO ultramafic 
      intrusions with magmatic sulphide mineralisation. These results extend 
      the company's prospective trend, incorporating the LMT and NYT to more 
      than 60km. 
 

Post period end Armada announced that it had commenced a series of Natural Source Audio-Magnetotelluric ("NSAMT") surveys over the LMT at the Nyanga Project in Gabon. NSAMT systems calculate ground resistivity by measuring the magnitude of naturally occurring electric and magnetic fields. Resistivity values are calculated from these measurements and used to create 2D and 3D images of the subsurface. Magmatic sulphide accumulations are defined by extremely low resistivity values. The survey is designed with a Depth of Investigation ("DOI") of up to 1,000m below the surface to follow up on targets where magmatic sulphides were encountered during the Phase 1 drilling programme.

 

The results will be compared with the Xcite(TM) program, to provide a basis for ranking AMT anomalies to define targets for the next phase of drilling. The surveys will start at the Libonga South target and if successful, the survey will then be moved to other high priority targets along the LMT and then to the high priority regional Ngongo and Yoyo targets (along the Ngongo-Yoyo Trend).

 

Royalty valuation

 

The royalty was not revalued over the period as there was no new material news flow pertaining to the potential value of the royalty released during the reporting period. Management believes the copper price estimate used in the valuation as of 31 December 2021 (US$9,078/t) is still appropriate, after being assessed versus the consensus analyst forecasts in Bloomberg for the periods when the production, and consequentially the royalty cash flows, are expected to materialise.

 

Refer to 12. Post Period Events, where it is disclosed that Sandfire released its 30 June 2022 Annual Financial Statement and updated its Motheo Copper project expansion DFS, on the 30 August 2022. The Company will work through the implications hereof and if material will update the market as soon as practically possible.

 

Results for the period

 

Administration costs for the period were GBP1,436,000 (H1 2021: GBP1,239,000). Whilst the Board's continuous drive for efficiencies remain ongoing, the increased costs predominately related to increased legal fees with regards to compliance and regulation, due diligence fees on investments and a retrenchment of a staff member in Thailand.

 

There was an overall loss in the period resulting from the disposals and fair valuing of investments during the year of GBP9,982,000 (H1 2021: gain of GBP1,686,000) reflecting market conditions in the year and more specifically the movement in in our active investments in Sandfire, Cobre and Southern Gold, which combined contributed to a loss of GBP9,718,000 over the period). The Board's conviction in the active investment strategy remains comfortable but notes that they are unlikely to pursue additional active investments in the near term. The investments are medium to longer term in nature offering exposure to earlier stage exploration projects where the Company has a significant interest and therefore some ability to influence strategic outcomes.

 

The results for the period also include a provision against the carrying value of KML of GBP423,000 which brings the carrying value of the equity investment therein to the expected recovery amount of GBP1,500,000 from Cobre.

 

The Company received dividend income of GBP146,000 (H1 2021: GBP288,000; 2021 full year GBP1,538,000) and net finance income of GBP2,413,000 (H1 2021: (GBP1,293,000); 2021 full year (GBP1,787,000) mainly relating to the change in value of the derivatives securing the Group's structured finance loans with a gain of GBP1,466,000 (H1 2021: gain GBP46,000). The value of the derivative inherently moves in contrast to the performance of the underlying share price over which the derivative is priced.

 

Loss for the period on ordinary activities before tax was GBP9,392,000 (H1 2021: loss GBP567,000).

 

Cashflow and financing

 

Disposals from equities during the period raised GBP6,348,000 and a further net GBP3,308,000 was invested into the purchase of equities and other investments. Operational cash outflows before working capital changes amounted to GBP1,378,000 (H1 2021: GBP1,190,000) with the explanations pertaining to administrative costs above accounting for the difference.

 

The net cash requirement for operations, was met out of cash from the net cash generated from the portfolio.

 

Management used the opportunity to apply the net cash generated from the portfolio after operational cash outflow to begin to de-risk the balance sheet and pay down GBP1,605,000 of the SC Lowy loan over the period.

 

Cash in hand at the end of the period was GBP192,000 (full year 2021: GBP648,000).

 

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

 

FOR THE SIX MONTHSED 30 JUNE 2022

 
                            Unaudited      Unaudited      Audited 
                             Six months     Six months     Year ended 
                             ended          ended          31 December 
                             30 June 2022   30 June 2021   2021 
                     Notes   GBP'000        GBP'000        GBP'000 
 
Profit on partial 
 sale of interests 
 in explorations in 
 Botswana                   -              -              21 
(Loss)/Profit on 
 disposal of 
 investments                (318)          1,191          1,979 
Movement in fair 
 value of fair 
 value accounted 
 equities                   (9,664)        495            (149) 
Share of post-tax 
 losses of equity 
 accounted joint 
 ventures                   (110)          (9)            (493) 
Provision against 
 cost of equity 
 accounted joint 
 ventures                   (423)          -              - 
Investment income           146            288            1,538 
Other income                -              -              5,214 
Net (loss)/gain 
 before 
 administrative 
 expenses                   (10,369)       1,965          8,110 
Administrative 
 expenses                   (1,436)        (1,239)        (2,108) 
Operating 
 (LOSS)/profit              (11,805)       726            6,002 
Finance income              2,775          349            467 
Finance costs               (362)          (1,642)        (2,254) 
(LOSS)/Profit 
 before taxation     3      (9,392)        (567)          4,215 
Tax on 
 (loss)/profit on 
 ordinary 
 activities          4      (258)          -              (49) 
(loss)/Profit on 
 ordinary 
 activities after 
 taxation                   (9,650)        (567)          4,166 
Other comprehensive 
income - Items 
which 
may be subsequently 
reclassified to 
profit or loss: 
Exchange 
 differences on 
 translation of 
 foreign 
 operations                 (191)          93             410 
Total comprehensive 
 (LOSS)/profit for 
 the period                 (9,841)        (474)          4,576 
 
(LOSS)/Profit for 
the period 
attributable to: 
Owners of the 
 parent                     (9,650)        (567)          4,166 
Non-controlling 
interest                    -              -              - 
(LOSS)/Profit for 
 the period                 (9,650)        (567)          4,166 
 
Total comprehensive 
(loss)/profit for 
the period 
attributable to: 
Owners of the 
 parent                     (9,842)        (471)          4,579 
Non-controlling 
 interest                   1              (3)            (3) 
Total comprehensive 
 (loss)/profit for 
 the period                 (9,841)        (474)          4,576 
 
Earnings per share 
Basic earnings per 
 share               5      (5.70)p        (0.4)p         2.59p 
Fully diluted 
 earnings per 
 share               5      (5.70)p        (0.4)p         2.59p 
 

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

 

FOR THE SIX MONTHSED 30 JUNE 2022

 
                            Unaudited       Unaudited       Audited 
                             Six months      Six months      Year ended 
                             ended           ended           31 December 
                             30 June 2022    30 June 2021    2021 
                     Notes   GBP'000         GBP'000         GBP'000 
NON--CURRENT ASSETS 
Intangible assets           20              23              21 
Property, plant and 
 equipment                  170             17              19 
Deferred tax asset   4      2,164           -               2,164 
Investment in joint 
 ventures            9      2,568           2,582           2,873 
Other non-current 
 asset investments   6      1,615           9,572           3,613 
Royalties 
 receivable          7      12,257          5,056           10,593 
                            18,794          17,250          19,283 
CURRENT ASSETS 
Equity investments 
 accounted for 
 under fair value    8      22,413          20,614          32,031 
Trade and other 
 receivables                530             527             477 
Cash and cash 
 equivalents                192             261             648 
                            23,135          21,402          33,156 
CURRENT LIABILITIES 
Trade and other 
 payables                   371             537             312 
Loans and 
 borrowings          10     8,706           48              8,732 
                            9,077           585             9,044 
NET CURRENT ASSETS          14,058          20,817          24,112 
NON-CURRENT 
LIABILITIES 
Loans and 
 borrowings          10     1,225           6,666           2,242 
Deferred tax 
 liability           4      2,471           -               2,213 
Contingent 
 consideration              132             116             118 
                            3,828           6,782           4,573 
NET ASSETS                  29,024          31,285          38,822 
 
CAPITAL AND 
RESERVES 
Share capital               170             156             170 
Share premium 
 account                    15,704          13,424          15,704 
Capital redemption 
 reserve                    4               4               4 
Share based payment 
 reserve                    2,244           2,300           2,343 
Warrant reserve             83              5,173           3,048 
Translation reserve         159             31              351 
Retained profits            10,571          10,109          17,114 
TOTAL SHAREHOLDERS' 
 FUNDS                      28,935          31,197          38,734 
Equity 
 non-controlling 
 interests                  89              88              88 
TOTAL EQUITY                29,024          31,285          38,822 
 

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

 

FOR THE SIX MONTHSED 30 JUNE 2022

 
                              Unaudited       Unaudited       Audited 
                               Six months      Six months      Year ended 
                               ended           ended           31 December 
                               30 June 2022    30 June 2021    2021 
                               GBP'000         GBP'000         GBP'000 
CASH FLOWS FROM OPERATING 
ACTIVITIES 
(Loss)/Profit before 
 taxation                     (9,392)         (567)           4,215 
Adjustments for: 
Net loss/(gain) on disposal 
 of fair value accounted 
 equities                     318             (1,191)         (1,979) 
Profit on partial sale of 
 interests in explorations 
 in Botswana                  -               -               (21) 
Movement in fair value of 
 fair value accounted 
 equities                     9,664           (495)           149 
Share of post-tax losses of 
 equity accounted joint 
 ventures                     110             9               493 
Movement In provision in, 
 and write-offs of, equity 
 accounted joint ventures     423             -               - 
Share based payment charge 
 for the period               43              43              86 
Depreciation and 
 amortisation                 15              6               13 
Other income                  -               -               (5,214) 
Investment income             (146)           (288)           (1,538) 
Finance income                (2,775)         (349)           (467) 
Finance costs                 362             1,642           2,254 
Operating cash flow before 
 working capital changes      (1,378)         (1,190)         (2,009) 
(Decrease)/Increase in trade 
 and other receivables        (53)            26              72 
Increase/(Decrease) in trade 
 and other payables           59              214             (11) 
Unrealised foreign exchange 
 gains and losses             (15)            (70)            (387) 
Net cash outflow from 
 operating activities         (1,387)         (1,020)         (2,335) 
CASH FLOW FROM INVESTING 
ACTIVITIES 
Proceeds from current asset 
 investment disposals         6,348           4,438           13,434 
Purchase of fixed assets      (160)           (2)             (9) 
(Increase in)/ Sale of 
 investment, and loans to, 
 joint ventures               (119)           300             (453) 
Purchase of current asset 
 investments                  (3,308)         (4,561)         (18,676) 
Investment income             146             288             1,538 
Net cash inflow/(outflow) 
 from investing activities    2,907           463             (4,166) 
CASH FLOWS FROM FINANCING 
ACTIVITIES 
Proceeds from issue of 
 shares                       -               532             3,191 
Share issue costs             -               -               (217) 
Loans drawn down              -               -               4,829 
Loans repaid                  (1,654)         (115)           (618) 
Interest paid                 (327)           (55)            (491) 
Net cash (outflow)/inflow 
 from financing activities    (1,981)         362             6,694 
NET (DECREASE)/ INCREASE IN 
 CASH AND CASH EQUIVALENTS    (461)           (195)           193 
Cash and cash equivalents at 
 beginning of period          648             458             458 
Effect of exchange rate 
 changes                      5               (2)             (3) 
CASH AND CASH EQUIVALENTS AT OF PERIOD                192             261             648 
 

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

 

FOR THE SIX MONTHSED 30 JUNE 2022 (UNAUDITED)

 
                                                Share 
                                    Capital     based 
                Share     Share     Redemption  payment   Warrant   Translation   Retained   Total equity    Non-controlling   Total 
                capital   premium   Reserve     reserve   reserve    reserve       profits   shareholders'    interests        equity 
                GBP'000   GBP'000   GBP'000     GBP'000   GBP'000    GBP'000       GBP'000   funds GBP'000    GBP'000          GBP'000 
BALANCE AT 1 
 JANUARY 2021   153       12,831    4           2,257     5,476     (62)          10,436     31,095          91                31,186 
Period to 30 
June 2021: 
Profit for the 
 period         -         -         -           -         -         -             (567)      (567)           -                 (567) 
Other 
 comprehensive 
 income         -         -         -           -         -         93            -          93              (3)               90 
TOTAL 
 COMPREHENSIVE 
 INCOME         -         -         -           -         -         93            (567)      (474)           (3)               (477) 
Shares issues   3         593       -           -         (63)      -             -          533             -                 533 
Cost of 
 share-based 
 payments       -         -         -           43        -         -             -          43              -                 43 
Transfer of 
 reserves 
 relating to 
 exercise and 
 expiry of 
 options and 
 warrants       -         -         -           -         (240)     -             240        -               -                 - 
TOTAL CHANGES 
 DIRECTLY TO 
 EQUITY         3         593       -           43        (303)     -             240        576             -                 576 
BALANCE AT 30 
 JUNE 2021      156       13,424    4           2,300     5,173     31            10,109     31,197          88                31,285 
Period to 31 
December 
2021: 
Profit for the 
 period         -         -         -           -         -         -             4,733      4,733           -                 4,733 
Other 
 comprehensive 
 income         -         -         -           -         -         320           -          320             -                 320 
TOTAL 
 COMPREHENSIVE 
 INCOME         -         -         -           -         -         320           4,733      5,053           -                 5,053 
Share issues    14        2,581     -           -         63        -             -          2658            -                 2658 
Warrants 
 issued         -         -         -           -         84        -             -          84              -                 84 
Cost of 
 share-based 
 payments       -         -         -           43        -         -             -          43              -                 43 
Share issue 
 expenses       -         (301)     -           -         -         -             -          (301)           -                 (301) 
Transfer of 
 reserves 
 relating to 
 exercise and 
 expiry of 
 options and 
 warrants       -         -         -           -         (2,272)   -             2,272      -               -                 - 
TOTAL CHANGES 
 DIRECTLY TO 
 EQUITY         14        2,280     -           43        (2,125)   -             2,272      2,484           -                 2,484 
BALANCE AT 31 
 DECEMBER 
 2021           170       15,704    4           2,343     3,048     351           17,114     38,734          88                38,822 
 
 

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

 

FOR THE SIX MONTHSED 30 JUNE 2022 (UNAUDITED)

 
                                              Share 
                                  Capital     based                                    Total equity 
                Share    Share    Redemption  payment  Warrant  Translation  Retained  shareholders'  Non-controlling  Total 
                capital  premium  Reserve     reserve  reserve   reserve      profits  funds           interests       equity 
                GBP'000  GBP'000  GBP'000     GBP'000  GBP'000   GBP'000      GBP'000  GBP'000         GBP'000         GBP'000 
Balance at 1 
 January 2022   170      15,704   4           2,343    3,048    351          17,114    38,734         88               38,822 
Period to 30 
June 2022: 
Loss for the 
 period         -        -        -           -        -        -            (9,650)   (9,650)        -                (9,650) 
Other 
 comprehensive 
 income         -        -        -           -        -        (192)        -         (192)          1                (191) 
Total 
 comprehensive 
 income         -        -        -           -        -        (192)        (9,650)   (9,842)        1                (9,841) 
Cost of 
 share-based 
 payments       -        -        -           43       -        -            -         43             -                43 
Transfer of 
 reserves 
 relating to 
 exercise and 
 expiry of 
 options and 
 warrants       -        -        -           (142)    (2,965)  -            3,107     -              -                - 
Total changes 
 directly to 
 equity         -        -        -           (99)     (2,965)  -            3,107     43             -                43 
Balance at 30 
 June 2022      170      15,704   4           2,244    83       159          10,571    28,935         89               29,024 
 

NOTES TO THE UNAUDITED CONDENSED INTERIM REPORT

 

FOR THE YEARED 30 JUNE 2022

 

1. BASIS OF PREPARATION

 

The condensed financial statements included in the interim accounts have been prepared under the historical cost convention and in accordance with IAS 34, as adopted by the UK.

 

The condensed financial statements are presented in UK pounds, which is also the Company's functional currency.

 

The principal accounting policies used in preparing these interim accounts are those expected to apply in the Group's Financial Statements for the year ending 31 December 2022. These are unchanged from those disclosed in the Group's Annual Report for the year ended 31 December 2021. The accounting policies adopted are consistent with those of the previous financial year. The following amendment to IFRSs became effective for the financial year beginning on 1 January 2022:

   -- IAS 16 "Property, Plant and Equipment" regarding proceeds before intended 
      use. 
 
   -- IAS 37 "Onerous contracts" regarding costs a company should include as 
      the cost fulfilling a contract when assessing whether a contract is 
      onerous. 
 
   -- A number of narrow-scope amendments to IFRS 3. 
 

The amendment had no impact on the condensed consolidated interim financial statements for the six months ended 30 June 2022 and no retrospective adjustments were required.

 

The interim accounts were approved by the Board of Metal Tiger on 30 August 2022. Neither the interim financial information for the six months ended 30 June 2022 nor the interim financial information for the six months ended 30 June 2021 constitute statutory accounts within the meaning of section 434 of the Companies Act 2006. The interim accounts are unaudited but have been subject to a review by the Group's auditors in accordance with International Standard on Review Engagements 2410 (UK) "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Financial Reporting Council. The comparatives for the year ended 31 December 2021 are not the Group's full statutory accounts for that period but have been extracted therefrom. A copy of the Group's full statutory accounts for that year has been delivered to the Registrar of Companies. The auditors' report on those accounts was unqualified and did not contain statements under sections 498(2) or (3) of the Companies Act 2006. The Group's full statutory accounts for the year ended 31 December 2021 are available on the Company's website (www.metaltigerplc.com).

 

2. ACCOUNTING POLICIES

 

The principal accounting policies are:

 

BASIS OF CONSOLIDATION

 

The Condensed Consolidated Statement of Comprehensive Income and Condensed Consolidated Statement of Financial Position include the financial statements of the Company and its subsidiary undertakings made up to 30 June 2022.

 

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.

 

GOING CONCERN

 

The condensed Interim Report has been prepared on the going concern basis as, in the opinion of the Directors, at the time of approving the condensed Interim Report, there is a reasonable expectation that the Company will continue in operational existence for the foreseeable future. The condensed Interim report does not include any adjustments that would result from the going concern basis of preparation being inappropriate.

 

EXPLORATION COSTS

 

Exploration costs incurred by Group companies, associates and joint ventures are expensed in arriving at profit or loss for the period.

 

Investments made are capitalised as an asset where the underlying projects have mineral resources which are compliant with internationally recognised Mineral Resource reporting standards (JORC and Canadian 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.

 

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.

 

FAIR VALUE OF INVESTMENTS

 

The Group's investments accounted for within the Equity Investment operating segment 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 considering 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.

 

INVESTMENTS IN ASSOCIATES AND JOINT VENTURES

 

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.

 

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 is offset against cost of investment or loans advanced.

 

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.

 

Where royalty contracts have been entered into, but the timing of receipts are unknown or cannot be reliably forecast, no value is attributed to the royalties.

 

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.

 

Contracts are assessed on a contract-by-contract basis.

 

EQUITY INVESTMENTS SEGMENTAL ASSETS

 

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 condensed statement of financial position is based on the quoted bid price at the period end 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 or, in the case of warrants, options and other derivatives on the basis of third-party quotation or specific investment valuation models appropriate to the investment concerned.

 

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.

 

3. SEGMENTAL REPORTING

 

OPERATING SEGMENTS

 
Six months        Equity       Project      Central 
ended 30 June     Investments  Investments  costs    Inter-company  Total 
2022              GBP'000      GBP'000      GBP'000   GBP'000        GBP'000 
COMPREHENSIVE 
INCOME: 
Net (loss)/gain 
 on investments   (9,835)      (534)        -        -              (10,369) 
Administrative 
 expenses         (26)         (230)        (1,180)  -              (1,436) 
Net finance 
 income/(cost)    79           577          1,757    -              2,413 
(Loss)/profit on 
 ordinary 
 activities 
 before 
 taxation         (9,782)      (187)        577      -              (9,392) 
Taxation          -            -            (258)    -              (258) 
(Loss)/profit 
 for the period 
 after taxation   (9,782)      (187)        319      -              (9,650) 
 
FINANCIAL 
POSITION: 
Intangible 
 assets           -            20           -        -              20 
Property, plant 
 and equipment    -            170          -        -              170 
Deferred tax 
 asset            -            -            2,164    -              2,164 
Investment in 
 joint ventures   -            2,568        -        -              2,568 
Other fixed 
 asset 
 investments      1,508        -            107      -              1,615 
Royalties 
 receivable       -            12,257       -        -              12,257 
Total 
 non-current 
 assets           1,508        15,015       2,271    -              18,794 
Current assets    22,413       3,971        366      (3,615)        23,135 
Current 
 liabilities      -            (3,770)      (8,922)  3,615          (9,077) 
Non-current 
 liabilities      -            (132)        (3,696)  -              (3,828) 
Net assets        23,921       15,084       (9,981)  -              29,024 
 

Equity Investments include strategic investments in resource exploration and development companies including equity and warrant holdings. Project Investments are mainly by way of joint venture arrangements and royalty receivables and include interests in precious, strategic and energy metals, with the current project located in Botswana. Central costs comprise those corporate costs which cannot be allocated directly to either operating segment and include office rent, audit fees, AIM and ASX costs together with corporate employees and Directors' remuneration relating to managing the business as a whole.

 

3. SEGMENTAL REPORTING (CONTINUED)

 

OPERATING SEGMENTS

 
Six months        Equity        Project       Central 
ended 30 June     Investments   Investments    costs    Inter-company   Total 
2021              GBP'000       GBP'000        GBP'000   GBP'000        GBP'000 
COMPREHENSIVE 
INCOME: 
Net (loss)/gain 
 on investments   1,974         (9)           -         -               1,965 
Administrative 
 expenses         (246)         (186)         (807)     -               (1,239) 
Net finance 
 income/(cost)    23            (10)          (1,306)   -               (1,293) 
(Loss)/profit on 
 ordinary 
 activities 
 before 
 taxation         1,751         (205)         (2,113)   -               (567) 
Taxation          -             -             -         -               - 
(Loss)/profit 
 for the period 
 after taxation   1,751         (205)         (2,113)   -               (567) 
 
FINANCIAL 
POSITION: 
Intangible 
 assets           -             23            -         -               23 
Property, plant 
 and equipment    -             17            -         -               17 
Investment in 
 joint ventures   -             2,582         -         -               2,582 
Other fixed 
 asset 
 investments      9,465         -             107       -               9,572 
Royalties 
 receivable       -             5,056         -         -               5,056 
Total 
 non-current 
 assets           9,465         7,678         107       -               17,250 
Current assets    20,614        3,568         533       (3,313)         21,402 
Current 
 liabilities      (338)         (3,395)       (165)     3,313           (585) 
Non-current 
 liabilities      -             (116)         (6,666)   -               (6,782) 
Net assets        29,741        7,735         (6,191)   -               31,285 
 

3. SEGMENTAL REPORTING (CONTINUED)

 

GEOGRAPHICAL SEGMENTS

 
Six months ended    UK       EMEA     Asia-Pacific   Australasia   Americas   Inter-company   Total 
30 June 2022        GBP'000  GBP'000   GBP'000        '000          GBP'000    GBP'000         GBP'000 
COMPREHENSIVE 
INCOME: 
Net (loss)/gain on 
 investments        (9)      (534)    -              (10,275)      449        -               (10,369) 
Administrative 
 expenses           (1,097)  -        (235)          (63)          (41)       -               (1,436) 
Net finance 
 income/(expense)   (238)    1,608    180            863           -          -               2,413 
(Loss)/profit on 
 ordinary 
 activities before 
 taxation           (1,344)  1,074    (55)           (9,475)       408        -               (9,392) 
Taxation            (258)    -        -              -             -          -               (258) 
(Loss)/profit for 
 the period after 
 taxation           (1,602)  1,074    (55)           (9,475)       408        -               (9,650) 
 
FINANCIAL 
POSITION: 
Intangible assets   -        -        20             -             -          -               20 
Property, plant 
 and equipment      -        -        170            -             -          -               170 
Deferred tax asset  2,164    -        -              -             -          -               2,164 
Investment in 
 joint ventures     -        2,568    -              -             -          -               2,568 
Other fixed asset 
 investments        107      -        -              1,508         -          -               1,615 
Royalties 
 receivable         -        12,257   -              -             -          -               12,257 
Total non-current 
 assets             2,271    14,825   190            1,508         -          -               18,794 
Current assets      463      -        4,000          19,270        3,017      (3,615)         23,135 
Current 
 liabilities        (120)    -        (3,770)        (8,802)       -          3,615           (9,077) 
Non-current 
 liabilities        (2,470)  -        (132)          (1,226)       -          -               (3,828) 
Net assets          144      14,825   288            10,750        3,017      -               29,024 
 

3. SEGMENTAL REPORTING (CONTINUED)

 

GEOGRAPHICAL SEGMENTS

 
Six months ended    UK       EMEA     Asia-Pacific   Australasia   Americas   Inter-company   Total 
30 June 2021        GBP'000  GBP'000   GBP'000        GBP'000       GBP'000    GBP'000        GBP'000 
COMPREHENSIVE 
INCOME: 
Net (loss)/gain on 
 investments        28       (5)      -              1,273         669        -               1,965 
Administrative 
 expenses           (962)    (25)     (167)          (85)          -          -               (1,239) 
Net finance 
 income/(expense)   341      159      (235)          (1,561)       3          -               (1,293) 
(Loss)/profit on 
 ordinary 
 activities before 
 taxation           (593)    129      (402)          (373)         672        -               (567) 
Taxation            -        -        -              -             -          -               - 
(Loss)/profit for 
 the period after 
 taxation           (593)    129      (402)          (373)         672        -               (567) 
 
FINANCIAL 
POSITION: 
Intangible assets   -        -        23             -             -          -               23 
Property, plant 
 and equipment      -        -        17             -             -          -               17 
Investment in 
 joint ventures     -        2,582    -              -             -          -               2,582 
Other fixed asset 
 investments        107      -        -              9,465         -          -               9,572 
Royalties 
 receivable         -        5,056    -              -             -          -               5,056 
Total non-current 
 assets             107      7,638    40             9,465         -          -               17,250 
Current assets      1,561    -        3,514          17,723        1,917      (3,313)         21,402 
Current 
 liabilities        (164)    (267)    (3,370)        (97)          -          3,313           (585) 
Non-current 
 liabilities        (116)    -        -              (6,666)       -          -               (6,782) 
Net assets          1,388    7,371    184            20,425        1,917      -               31,285 
 

4. TAXATION

 
                            Unaudited       Unaudited       Audited 
                             Six months      Six months      Year ended 
                             ended           ended           31 December 
                             30 June 2022    30 June 2021    2021 
                             GBP'000         GBP'000         GBP'000 
Current tax on income for 
the year                    -               -               - 
Deferred tax                (258)           -               (49) 
Total tax charge for the 
 year                       (258)           -               (49) 
 

4. TAXATION (CONTINUED)

 

The tax on the Groups on the Groups profit before tax differs from the theoretical amount that would arise using the weighted average rate applicable to the profits of the Group or Company as follows:

 
                            Unaudited       Unaudited       Audited 
                             Six months      Six months      Year ended 
                             ended           ended           31 December 
Factors affecting the tax    30 June 2022    30 June 2021    2021 
charge                       GBP'000         GBP'000*        GBP'000 
(Loss)/Profit before tax    (9,392)         (567)           4,215 
 
Loss/(profit) before tax 
 multiplied by rate of 
 corporation tax in the UK 
 of 19% (2021: 19%)         1,784           108             (801) 
Overseas profits/losses 
 taxed at different rates   (27)            -               (48) 
Changes in rate at which 
 deferred tax is provided   -               -               103 
Chargeable gains arising    (32)            -               (514) 
Income not chargeable to 
 tax                        -               -               639 
Expenses not allowable for 
 tax                        (1,921)         -               (40) 
Other permanent timing 
differences                 -               -               - 
Deferred tax gains and 
 losses not recognised      -               (108)           612 
Remeasurement of deferred 
 tax for changes in rates   (62)            -               - 
Total tax                   (258)           -               (49) 
 

*No corporation tax charge arose in the June 2021 period given the cumulative tax loss position. No deferred tax asset was recognised either in that period in respect of the remaining losses as the Directors could not be certain that future profits would be sufficient for the asset to be recognised at that time.

 

Movements in deferred tax assets and liabilities during the year and the amounts outstanding at the period/year end are as follows:

 
                                 Assets    Liabilities   Net 
Deferred tax asset/(liability)    GBP'000   GBP'000       GBP'000 
At 1 January 2021                -         -             - 
Charge for the period            -         -             - 
At 30 June 2021                  -         -             - 
Adjustment prior years           909       (909)         - 
Charge for the period            1,255     (1,304)       (49) 
At 31 December 2021              2,164     (2,213)       (49) 
Charge for the period            -         (258)         (258) 
At 30 June 2022                  2,164     (2,471)       (307) 
 

5. EARNINGS/LOSS PER SHARE

 
                                  Unaudited       Unaudited       Audited 
                                   Six months      Six months      Year ended 
                                   ended           ended           31 December 
                                   30 June 2022    30 June 2021    2021 
                                   GBP'000         GBP'000         GBP'000 
(Loss)/Profit attributable to 
 equity holders of the Company    (9,650)         (567)           4,166 
Shares used for calculation of 
 basic EPS*                       169,423,576     155,910,062     160,776,895 
Shares used for calculation of 
 fully diluted EPS*               169,423,576     155,910,062     160,776,895 
EARNINGS PER SHARE 
Basic earnings per share          (5.70)p         (0.4)p          2.59p 
Fully diluted earnings per share  (5.70)p         (0.4)p          2.59p 
 

No share options and warrants outstanding at 30 June 2022 were dilutive as the exercise price of any share options or warrants outstanding at 30 June 2022 was higher than the average market price of ordinary shares during the period and the Company also incurred a loss over the period. Accordingly, all such potential ordinary shares have been excluded from the weighted average number of ordinary shares in calculating diluted earnings per share as at 30 June 2022. No share options and warrants outstanding at either 30 June 2021 or 31 December 2021 were dilutive as the exercise price of any share options or warrants outstanding was higher than the average market price of ordinary shares during the period, in addition for the period ended 30 June 2021 the Company incurred a loss. Accordingly, all such potential ordinary shares have been included in the weighted average number of ordinary shares in calculating diluted earnings per share for the comparative periods.

 

6. OTHER NON-CURRENT ASSETS

 
 
                                              Unaudited       Audited 
                       Unaudited               Six months      Year ended 
                        Six months             ended           31 December 
                        ended                  30 June 2021    2021 
                        30 June 2022 GBP'000   GBP'000         GBP'000 
Equity investments     1,388                  10,539          4,125 
Derivatives*           120                    (1,074)         (619) 
Other fixed asset 
 investments           107                    107             107 
                       1,615                  9,572           3,613 
*Movements in 
derivative values in 
the respective 
periods are included 
as part of either 
finance income or 
cost as appropriate. 
 
Categorised under the 
IFRS 13 fair value 
hierarchy as: 
Level 1 - quoted 
 investments           1,388                  10,539          4,125 
Level 3 -- unquoted 
 fixed asset 
 investments and 
 derivatives           227                    (967)           (512) 
                       1,615                  9,572           3,613 
 

7. ROYALTIES RECEIVABLE

 
                                            T3        A4        Total 
                                             GBP'000   GBP'000   GBP'000 
At 1 January 2021                           1,228     3,638     4,866 
Net accretion of discount on acquisition*   59        190       249 
Translation effects                         (15)      (44)      (59) 
At 30 June 2021                             1,272     3,784     5,056 
Net accretion of discount on acquisition*   15        203       218 
Periodic revaluation- Other income          -         5,214     5,214 
Translation effects                         28        77        105 
At 31 December 2021                         1,315     9,278     10,593 
Net accretion of discount on acquisition*   47        353       400 
Periodic revaluation- Other income          -         -         - 
Translation effects                         144       1,120     1,264 
At 30 June 2022                             1,506     10,751    12,257 
 

*will reflect assumptions pertaining to timings of cash flow since last valuation at appropriate discount rates

 

The T3 royalty receivable relates to the T3 project in Botswana previously owned in the Metal Capital Ltd joint venture sold to MOD in 2018 and ultimately Sandfire. The royalty is capped at US$2 million and is expected to result in a receipt thereof in the final quarter of 2023.

 

The A4 royalty is an uncapped 2% net smelter royalty over any future production from the A4 deposit situated in Botswana and owned by Sandfire. In initially assigning a value to the royalty in 2020, the Company relied inter alia on the announcement released by Sandfire to the market on 1 December 2020.

 

The Company has again predominately relied on the announcement released by Sandfire to the market on 2 September 2021, together with other consensus information readily available in the market, to determine the revised carrying value as of 30 June 2022 and 31 December 2021. The Company expects Sandfire to deliver the 5.2 Mtpa expansion case defined feasibility statement in the September 2022 Quarter.

 

Refer to 12. Post Period Events, where it is disclosed that Sandfire released its 30 June 2022 Annual Financial Statement and updated its Motheo Copper project expansion DFS, on the 30 August 2022. The Company will work through the implications hereof and if material will update the market as soon as practically possible.

 

The following table illustrates the key considerations and assumptions the Company considered in determining the value of the value by using the net present value of the cash flows expected from the royalty as discounted.

 
                           Unaudited      Unaudited      Audited 
                            Six months     Six months     Year ended 
                            ended          ended          31 December 
                            30 June 2022   30 June 2021   2021 
Resource size     MT        9,700,000      6,500,000      9,700,000 
Resource grade    Copper    1.17%          1.54%          1.17% 
Medium term 
copper price     US$/MT    U$9,078        U$6,967        U$9,078 
Mining recovery   Copper    92.3%          92.1%          92.3% 
Concentrate 
 recovery         Copper    92.2%          92.2%          92.2% 
Cash flow 
commencement               4(th) Quarter  1(st) Quarter  4(th) Quarter 
date                       2023           2023           2023 
Discount rate              7%             10%            7% 
 

8. EQUITY INVESTMENTS ACCOUNTED FOR UNDER FAIR VALUE

 
                                            Unaudited       Audited 
                                             Six months      Year ended 
                       Unaudited Six         ended           31 December 
                       months ended 30       30 June 2021    2021 
                       June 2022 GBP'000     GBP'000         GBP'000 
Categorised under 
the IFRS 13 fair 
value hierarchy as: 
Level 1 - quoted 
 investments           19,792               18,859          31,262 
Level 3 -- unquoted 
 investments -- 
 equity investments    1,970                1,086           212 
Level 3 -- unquoted 
 investments -- 
 warrants and 
 derivatives           651                  669             557 
                       22,413               20,614          32,031 
 

9. AMOUNTS DUE FROM RELATED PARTIES

 
                                             Unaudited      Audited 
                                              Six months     Year ended 
                       Unaudited Six months   ended          31 December 
                       ended 30 June 2022     30 June 2021   2021 
                       GBP'000                GBP'000        GBP'000 
Kalahari Metals 
 Limited:              1,067                 32             840 
 

Kalahari Metals Limited is Metal Tiger's sole joint venture interest. The Company has a 49% (H1 2021 50.1%; full year 2021:49%) direct ownership stake. The Company has an amount owing to it from Kalahari Metals Limited of GBP1,067,000 as at 30 June 2022. The Company treats this loan in terms of the substance of the agreement and is included as Investment in joint ventures.

 

The Company has, subject to, inter alia, Cobre shareholder approval, sold 24.5% of the shares in KML for a cash consideration of GBP750,000 (initial acquisition). In addition, the Company has granted Cobre a call option to acquire the remaining 24.5%, which is exercisable for either GBP750,000 cash or the equivalent in Cobre shares (based on a 90-trading day vwap). This call option must be exercised within 12 months after completion of the initial acquisition.

 

The initial acquisition is expected to close during September 2022.

 

10. LOANS AND BORROWINGS

 
                                            Unaudited       Audited 
                                             Six months      Year ended 
                       Unaudited Six         ended           31 December 
                       months ended 30       30 June 2021    2021 
                       June 2022 GBP'000     GBP'000         GBP'000 
At 1 January           10,974               7,103           7,103 
Net cash flows from 
 financing 
 activities            (1,654)              (115)           4,211 
Drawn down in period   -                    -               4,829 
Repaid in period       (1,654)              (115)           (618) 
Translation 
 differences *         611                  (274)           (340) 
At 30 June/31 
 December              9,931                6,714           10,974 
 

*non cash flow

 

Included in the above are loans amounting in aggregate to A$11,266,195 (H1 2021:A$12,281,030; full year 2021: A$11,351,476) which are secured by 2,842,667 shares in the capital of Sandfire for both periods. The loans are repayable in full on the following dates:

 
                        GBP'000 
16 December 2022        4,040 
8 May 2023              555 
9 June 2023             568 
10 July 2023            571 
7 July 2023             85 
8 December 2023         570 
                        6,389 
 

Also included in the amount owing is a loan amounting to A$6,160,427 (H1 2021: Nil; full year 2021: A$9,000,000) which are secured by a collateral agreement over 4,164,286 (H1 2021: Nil; full year 2021: 4,714,286) shares in the capital of Sandfire Resources Limited and attracts interest at 10% per annum.

 

The loan is repayable in full on 4 October 2022, with the Company having the option to extend the repayment date to 4 October 2023 at a fee of 1.5% of the then outstanding commitment.

 

Loans and borrowings are classified in accordance with their repayment profiles as:

 
                                            Unaudited       Audited 
                                             Six months      Year ended 
                       Unaudited Six         ended           31 December 
                       months ended 30       30 June 2021    2021 
                       June 2022 GBP'000     GBP'000         GBP'000 
Non-current 
 liabilities -- Loans 
 and borrowings        1,225                6,666           2,242 
Current Liabilities 
 -- Loans and 
 borrowings            8,706                48              8,732 
                       9,931                6,714           10,974 
 

11. SHARE OPTIONS AND WARRANTS CHARGED AGAINST OPERATING PROFIT

 

No new options were granted under the Company's share option schemes during the period. The total charge to operating profit/loss for the period amounted to GBP43,000 for the year (H1 2021: GBP43,000; full year 2021: GBP86,000).

 

12. POST PERIOD EVENTS

 

The Company announced on 4 August 2022 it has invested, subject to Cobre shareholders approval, A$1,471,211 for 9,808,076 ordinary shares in Cobre, thereby maintaining its pro-rata holding in Cobre at approximately 21%.

 

The payment of the said investment is expected to be in early September 2022, at approximately the same time as the receipt of GBP750,000 from Cobre for the initial acquisition in KML.

 

Sandfire released its 30 June 2022 Annual Financial Statement and updated its Motheo Copper project expansion DFS, on the 30 August 2022. The Company will work through the implications hereof and if material will update the market as soon as practically possible.

 

The carrying value of the active investments has increased significantly since period end. The market value of the Sandfire shares based on closing share prices as at 26 August 2022 is GBP20.4 million and of Cobre GBP11.5 million, representing a cumulative mark to market gain of GBP13.5 million for the two holdings, since 30 June 2022.

 

13. DISTRIBUTION OF INTERIM REPORT AND REGISTERED OFFICE

 

A copy of Interim Report will be available shortly on the Company's website, www.metaltigerplc.com, and copies will be available from the Company's registered office, Weston Farm House, Weston Down Lane, Weston Colley, Hampshire, S021 3AG.

 

QUALIFIED PERSON'S STATEMENT

 

The technical information contained in this announcement has been read and approved by Mr Nick O'Reilly (MSc, DIC, MAusIMM, MIMMM,FGS), who is a qualified geologist and acts as the Qualified Person under the AIM Rules Note for Mining and Oil & Gas Companies. Mr O'Reilly is a Principal consultant working for Mining Analyst Consulting Ltd which has been retained by Metal Tiger plc to provide technical support.

 
Reference Notes 
 
    1                  JORC 2012: The Australasian Code for Reporting of 
                       Exploration Results, Mineral Resources and Ore Reserves 
                       (the "JORC Code") is a professional code of practice 
                       that sets minimum standards for Public Reporting of 
                       minerals Exploration Results, Mineral Resources and Ore 
                       Reserves. The current edition of the JORC Code was 
                       published in 2012 ("JORC 2012"). 
 
    2                  Listing Exchanges: AIM: London Stock Exchange 
                       Alternative Investment Market. ASX: Australian 
                       Securities Exchange, CSE: Canadian Securities Exchange. 
                       TSX: Toronto Stock Exchange, TSXV: TSX Venture 
                       Exchange. 
 
    3                  VHMS: Volcanic-hosted massive sulphide ("VHMS") mineral 
                       deposits, are a type of metal sulphide deposit, mainly 
                       copper-zinc, which are associated with and created by 
                       volcanic-associated hydrothermal events in submarine 
                       environments. 
 

This announcement contains inside information for the purposes of the market abuse regulation (EU No. 596/2014) ("MAR").

 

INDEPENDENT AUDITOR'S REVIEW REPORT TO METAL TIGER

 

On the interim financial information for the six months ended 30 June 2022

 

Conclusion

 

We have been engaged by the company to review the condensed set of financial statements in the half yearly report for the six months ended 30 June 2022 which comprise the condensed consolidated statement of financial position of Metal Tiger Plc as of 30 June 2022 and the related condensed statements of comprehensive income, changes in equity and cash flows for the six months then ended and the related notes 1 to 13.

 

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half yearly financial report for the six months ended 30 June 2022 is not prepared in all material aspects, in accordance with UK adopted International Accounting Standard 34 and the AIM Rules for Companies.

 

Basis for Conclusion

 

We conducted our review in accordance with International Standard on Review Engagement 2410 (UK) "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of interim financial information consists of making inquiries, primarily or persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

 

As disclosed in note 1, the annual financial statements of the group are prepared in accordance with UK adopted international accounting standards. The condensed set of financial statements included in this half yearly report has been prepared in accordance with UK adopted International Accounting Standard 34 "Interim Financial Reporting"

 

Conclusions relating to going concern

 

Based on our review procedures, which are less extensive than those performed in an audit as described in the Basis for Conclusion section of this report, nothing has come to our attention to suggest that management have inappropriately adopted the going concern basis of accounting or that management have identified material uncertainties relating to going concern that are not appropriately disclosed.

 

This conclusion is based on the review procedures performed in accordance ISRE 2410 (UK), however future events or conditions may cause the Group to cease to continue as a going concern.

 

Responsibilities of directors

 

The directors are responsible for preparing the half-yearly financial report in accordance with UK adopted International Accounting Standard 34 and the AiM Rules for Companies.

 

In preparing the half-yearly financial report, the directors are responsible for assessing the Groups 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 to cease operations, or have no realistic alternative but to do so.

 

Auditor's Responsibilities for the review of the financial information

 

In reviewing the half-yearly report, we are responsible for expressing to the company a conclusion on the condensed set of financial statements in the half-yearly financial report. Our conclusion, including our conclusion relating to going concern, are based on procedures that are less extensive than audit procedures, as described in the Basis for conclusion paragraph of this report.

 

Use of our report

 

This report is made solely to the Company in accordance with International Standard on Review Engagements 2410 (UK) "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Financial Reporting Council. Our work has been undertaken so that we might state to the Company those matters we are required to state to it in an independent review 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, for our review work, for this report, or for the conclusions we have formed.

 

Crowe U.K. LLP

 

Statutory Auditor

 

London, United Kingdom

 

30 August 2022

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220830006001/en/

 
    CONTACT: 

Metal Tiger plc

 
    SOURCE: Metal Tiger plc 
Copyright Business Wire 2022 
 

(END) Dow Jones Newswires

August 31, 2022 02:00 ET (06:00 GMT)

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