TIDMMTR
Metal Tiger plc
("Metal Tiger" or the "Company")
Unaudited Preliminary Final Report
Metal Tiger plc (AIM: MTR, ASX: MTR), the AIM and ASX listed
investor in natural resources opportunities, is pleased to announce
an Unaudited Preliminary Final Report for the year end 31 December
2022.
Key Performance Indicators
Unaudited for Audited for
the year the year
ended 31 ended 31
December December
2022 2021 Change* Change* %
Total comprehensive
(loss)/profit
attributable to
owners of the
parent -GBP6,937,000 GBP4,579,000 -GBP11,516,000 -251%
Net asset value GBP31,973,000 GBP38,822,000 -GBP6,848,922 -18%
Net asset/tangible
asset value per
share * 18.9p 22.9p -4.0p -18%
Closing share price 13.0p 20.5p -7.5p -37%
Share price
premium/(discount)
to net asset
value* -31% -11% -20% -195%
Market
capitalisation GBP22,025,000 GBP34,732,000 -GBP12,707,000 -37%
Shares in issue at
the end of the
year 169,423,576 169,423,576 - 0%
* Based on shares in issue at the year end.
The full report is detailed below and has also been uploaded to
the Company's website https://www.metaltigerplc.com/.
Additional Information
Dividends paid or provided for No dividends declared for the year
ended 31 December 2022 (31 December
2021: Nil)
Net tangible assets per share Details of net tangible asset backing
are set out in the key performance
indicators.
Control gained or lost over entities None.
having material effect
Details of associates and joint Kalahari Metals Limited was Metal
ventures Tigers sole joint venture interest.
The Company sold its 49% (31 December
2021: 49%) direct equity stake,
during the year under review.
Other significant information At the date of this Appendix 4E there
are no matters of a significant
nature not addressed in this Appendix
4E.
Accounting standards for foreign The Financial Statements have been
entities prepared in accordance with
International Financial Reporting
Standards.
Commentary on the results for the Refer to commentary section.
financial year
Compliance statement This report is based on accounts
which are in the process of being
audited.
For further information on the Company, visit
www.metaltigerplc.com:
Enquiries:
Michael McNeilly (Chief Executive Tel: +44 (0)20 3287 5349
Officer)
Mark Potter (Chief Investment
Officer)
James Dance Strand Hanson Limited Tel +44 (0)20 7409 3494
Richard Johnson (Nominated Adviser)
Robert Collins
Simon Johnson Alexandra Zeus Capital Limited Tel: +44 (0)20 7614 5900
Campbell-Harris (Broker)
Gordon Poole Camarco (Financial PR) Tel: +44 (0)20 3757 4980
Elfie Kent
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.
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.
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.
Commentary
2022 was undoubtedly a challenging year, with several market
shocks, difficult macro trends driven by a sharp global growth slow
down driving concerns about an impending global recession,
inflation pushing up costs (especially energy), rising interest
rates, liquidity pressure driven by an overall market sell-off,
COVID-19 restrictions in China, supply chain disruptions and
geopolitical tensions between the East and West, and the ongoing
uncertainty and tension around the Russo-Ukraine war. With a few
exceptions (notably energy related) commodity prices retreated
significantly from their peaks (at least in US dollar terms), with
currency depreciations driven by a strengthening US dollar (largely
because of an aggressively hawkish US Federal Reserve ("Fed")
policy in its quest to fight inflation) leading to certain
countries, in particular emerging market and developing countries
to see an increase in domestic commodity prices. Aggressive natural
gas purchases by several European countries drove higher energy
prices higher but these tailed off towards the end of 2022 as
inventories filled and consumers reduced their consumption in
response to higher prices and warmer-than-usual weather. This,
along with declining copper and zinc prices put pressure on the
Sandfire Resources Ltd ("Sandfire") MATSA operations in the Iberian
Pyrite Belt in Spain and resulting in Sandfire conducting a fully
underwritten entitlement offer in November 2022, with the proceeds
to be used to repay one of its ANZ Corporate Debt facilities as
well as to fund increased working capital for the construction and
ramp up of its Motheo Copper project. Energy prices have since
subsided and are expected to ease through 2023 and 2024.
Government
Whilst there will likely be an increase in volatility during
2023, as seen in the previous 12 months it is still arguable that
as at the end of 2022 that we are in a commodity super cycle.
Starting in March 2022, the Federal Reserve raised the federal
funds rate seven times in 2022, reaching a year end rate of 4.25%
to 4.50% and is largely expected to continue smaller increases
through 2023 and keep rates elevated. Rate rises hikes tend to
cause a decline in metal prices because of the increased cost of
carrying inventories. In 2022, Metal Tiger's largest commodity
exposure by investment value, via its equity and now defunct
project investments were to copper and gold. In 2022, copper prices
were very volatile with the price peaking in March before dropping
on the back of various macroeconomic factors in Chile and the Fed
announcing a March interest rate rise. On a backdrop of fear of a
protracted zero-COVID policy in China as well as further lockdowns
coupled with further Fed rate increases, prices eventually briefly
dropped below US$3/lb in July. Prices then stayed largely
suppressed, with Chile's rejection of a new constitution helping to
support prices. In November, the copper price was squeezed in
November and closed the year at circa US$3.81/lb amid a backdrop of
concerns regarding supply from Peru on the back of unrest following
President Pedro Castillo's removal from office, and renewed
optimism regarding reopening in China, which accounts for circa 50%
of global copper consumption. As regards copper, Goldman Sachs
expects so-called "green demand" to account for 68% of total demand
growth in China in 2023, offsetting continued weakness in the
property sector.
Following Russia's invasion of Ukraine in March 2022, gold
prices spiked 13% from January as investors sought a safe-haven
asset following Russia's invasion of Ukraine. The spike was short
lived against headwinds from a strong US dollar and the Federal
Reserve's stance on inflation. In Q2 2022 surging costs due to
inflation saw average all-in sustaining cost reach a record high of
US$1,289/oz. In Q3 2022, the surging US dollar, along with seasonal
weakness, saw the gold price hit a low of US$1,691/oz. Gold ended
the year at US$1,824/oz. With that said, annual gold demand in 2022
was very high, aided by sizeable central bank purchases, strong
retail demand and slower ETF outflows, whilst gold supply increased
by 2% and full year mine production grew by 1%.
In what was a positive trend for the mining sector and for the
global energy transition but, also a largely inward-facing policy
move, the US enacted the Inflation Reduction Act in July 2022 with
US$369 billion worth of tax breaks and subsidies set aside to boost
green technology and energy security in the US. It is largely
expected that Europe will follow suit with similar pro-energy
transition legislation in 2023 to remain competitive.
The price of battery grade lithium carbonate has increased from
US$8,000 per tonne to over US$70,000 per tonne since 2020. Lithium
prices continued to be well supported, a trend that is expected to
continue for the foreseeable future, with supply expected to remain
tight amid bullish demand from the accelerating adoption of
electric vehicles across the globe. In late 2022 / early 2023 there
was some softening of the outlook for lithium, led by a slowdown in
the Chinese electric vehicle ("EV") market, however major EV
manufacturers such as Tesla have proactively adjusted downwards the
pricing of their electric cars to stimulate higher demand.
With EV adoption picking up, some industry experts predict the
gap between lithium demand and supply will remain or even widen in
2023. This supply demand imbalance is expected to increase over the
coming decade. However, a large number of new lithium mines are
currently in development (60+ new greenfield projects, 7 brownfield
expansions) which will go some way towards addressing some of the
short term supply-side deficits over the coming years.
The general market consensus view is that lithium prices will
remain at elevated levels for the next few years, subject to EV
demand remaining robust.
2022 was the first year when investment in decarbonising energy
surpassed US$1 trillion. The year on year increase of more than
US$250 billion from 2021 was the largest jump yet. One of the key
areas, EV sector remains one of the four key drivers of future
demand growth for copper according to Goldman Sachs. Interestingly,
in 2022 EV sales grew by about 36% over the previous year. It is
anticipated that public infrastructure spending in China should
remain strong in 2023, helping to underpin a recovery in Chinese
GDP growth. As regards copper, Goldman Sachs expects so-called
"green demand" to account for 68% of total demand growth in China
in 2023, offsetting continued weakness in the property sector.
The Company entered 2022 having concluded, in late 2021, to take
up its rights in Sandfire's entitlement offer as part of its
acquisition of MATSA. To accomplish this, an A$9m margin lending
facility agreement was entered into in October 2021 with a nominee
of SC Lowy Primary Investments Ltd secured against 4,714,286
Sandfire shares held under a tripartite sponsorship deed with an
Australian broker. At first this decision paid off well with
Sandfire (ASX.SFR) trading north of A$7 per share in February 2022;
however, subsequently, the price rapidly deteriorated, and having
not sold the Company was left with little choice but to manage the
position so as to mitigate realised and potential realised losses
on the position. Fortunately, Metal Tiger did aggressively sold
other portfolio holdings in H1 2022, prior to liquidity drying up
and prices across most of the sector dropping but ultimately it
still proved to be a difficult position as eventually declining
liquidity caused issues. Unfortunately, the bear market pushed
Metal Tiger to cautiously sell SFR shares under the facility twice
in June 2022 at prices of A$5.25 and prices of A$4.54 to reduce the
loan balance outstanding given margin coverage levels. Furthermore,
the Company took the prudent decision (to mitigate a situation of
potentially repeated margin calls) to allocate cash from disposals
from other holdings to reduce the loan balance and markedly reduce
the risk of further margin calls as a result, although the Sandfire
share price, hit a low point of A$3.28 on 20 October 2022, by this
point this was still very much above the margin call price. In
November 2022, following a copper price squeeze, Sandfire announced
an entitlement offer on 18 November 2022 to raise A$200 million at
A$4.30 per share. Metal Tiger then opted to dispose of 1.3 million
SFR shares to take up its pre-emptive rights the entitlement offer,
as well as reducing the loan balance on the previous Margin Lending
Facility. On 14 December 2022, Metal Tiger entered a new A$15m
Margin Lending and Drawdown Facility with a sub-fund of SC Lowy SI
II (SG) VCC which repaid, and in essence, replaced the previous
Margin Lending Facility. Some of the drawdown was used to repay the
A$7m loan against 1,675,125 Sandfire shares at an effective put
entry price. This resulted in Metal Tiger's position being
5,012,626 Sandfire shares against an A$8.345m loan balance, with
the ability to drawdown a further A$6.65m to either purchase
Sandfire shares in the market or to settle loans outstanding
against the 1,167,542 SFR shares secured under the equity
derivative financing arrangement with a global investment bank.
Metal Tiger opted to sell a further 250,000 Sandfire shares in late
December.2022 at A$5.38 per share, reducing the outstanding loan
balance to A$7.7m. Whilst fundamentally, Sandfire is a medium-term
position for the Company the Board is exercising substantially more
caution regarding selling discipline to ensure that it avoids a
repeat of last year's performance.
During the course of 2022, Metal Tiger was less active in
seeking and making new investments than it had been in previous
years, with passive investments totalling GBP3,928,000 for the
year, down from GBP6,137,000 the year before. This was largely as a
result of the situation explained above.
Despite these difficulties, the Board took several decisive
steps in a difficult but transitional 2022 in order to set the
foundation for the future growth and strategic ambitions of the
Company.
The first step was that the Company decided that it was no
longer a core strategic objective and no longer viable for Metal
Tiger to directly contribute to exploration in Botswana via
Kalahari Metals Limited. Therefore, in June 2022 the Company
announced that it had entered a transaction with Cobre Limited
("Cobre") to dispose of its interests in Kalahari Metals Limited
ending direct expenditure on exploration at a JV or project level
and essentially marking the end of the Project Investments division
of the Company. In late November 2022, Cobre acquired all
outstanding debt and MTR's remaining 24.5% interest in Kalahari
Metals Limited in exchange for new shares in Cobre. Whilst no
longer supporting the project directly, the Company opted to
continue to support Cobre Limited, by investing approximately
A$1.47m in Cobres's A$7.0m fundraise in August 2022, to maintain
its pro-rata interest, and then agreed to invest a further A$1m in
December 2022 to support highly encouraging exploration results
from Cobre's successful drilling campaign and additional
exploration work. This second investment is subject to approval
from Cobre shareholders in March 2023. In December 2022, Cobre
announced that it had signed a collaboration agreement with a
subsidiary of Sandfire to procure Airborne Gravity Gradient data
over its Ngami, Kitlanya West and Kitlanya East Copper Projects in
Botswana with the costs to be split equally between Cobre and
Sandfire. Cobre, via Kalahari Metals Limited, has completed 7,750m
of drilling. Out of 28 holes drilled on the Ngami Copper Project
("NCP"), 27 intersected the target mineralised contact. Assay
results from discovery hole NCP20A drilled into the Comet target
confirmed visual copper estimates and delineating a 30m zone
(downhole) of chalcocite mineralisation grading 1.25% Cu and 17 g/t
Ag. This same intersection includes an exceptional 1.7m at10.9%Cu
and 45g/t Ag from 155.3m to 157m downhole. Over 5,000 historical
soil samples combined with 1,634 new samples were analysed with
partial leach geochemistry, which has proven successful in defining
several new targets in addition to Comet at NCP. 5,359 soil samples
were collected on the Kitlanya West Project located immediately
west of NCP. In addition, a 25km(2) Natural Source
Audio-Magnetotelluric NSAMT orientation study was completed, along
with a 500-sample ionic leach test survey both aimed at providing
new ways to vector into high grade zones within the targets at NCP.
The Board is pleased with the methodical approach by Cobre to
unlock the value of their tenements, but equally notes that this is
being achieved with substantial capital having been raised in the
last 12 months and that from a market perspectve Cobre has
consolidated nearly 100% ownership of Kalahari Metal's tenements
which means it is in a far stronger negotiating position for
spin-outs, joint ventures or farm-ins with third parties.
The second step, commenced in late May 2022, when the Company
applied to the UK Financial Conduct Authority ("FCA") to be
registered as a small Alternative Investment Fund Manager ("AIFM").
After a robust set of questioning from the FCA and with the
assistance of its legal counsel, Metal Tiger was successfully
entered into the register of small registered UK AIFMs with effect
from 17 November 2022.
Portfolio Losses
Metal Tiger had a combined loss of GBP5,110,000 realised and
unrealised within the Investment segment. The majority of the
losses arose from an unrealised loss of GBP629,454 during the
period from Armada Metals Limited, an unrealised loss of GBP718,309
from Southern Gold Limited and a partially realised GBP3,775,564
loss from Sandfire Resources Limited. Several of the realised
losses across the passive portfolio resulted from needing to access
liquidity from the passive investment portfolio to reduce the
Sandfire margin call coverage ratio in declining market conditions,
as detailed further above.
Following the successful listing and A$10m raise on the ASX in
December 2021, Armada Metals Limited ("Armada"), in which Metal
Tiger holds a 14.4% stake received a renewal of permit G5-555 in
March 2022 and then commenced diamond drilling at the Nyanga
Project to test high-priority electromagnetic conductors,
positioned along the 25-kilometer-long prospective strike of the
Libonga-Matchiti Trend. In June 2022, Armada announced completion
of its phase 1 drilling programme noting that magmatic sulphide
mineralisation had been intercepted in all ten diamond holes at the
Libonga North, Matchiti Central and Libonga South targets along the
Ligonga-Matchiti Trend ("LMT"). In July, Armada noted that surface
hand-grab samples, collected along the Ngongo-Yoyo Trend ("NYT"),
had confirmed the presence of outcropping ultramafic intrusions
with observed magmatic sulphides for a further 40km southeast of
the LMT, extending the overall potential trend to over 60km. Lab
analysis of the samples has confirmed that the NYT as a complex,
dynamic multi-phased magma conduit system, with crustal
contamination having caused extensive sulphur saturation, with the
source of the magma in the NYT magmatic system the same as the LMT.
The data further supported intrusion fertility for polymetallic
magmatic mineralisation. In August 2022, Armada commenced an
Natural Source Audio-Magnetotelluric ("NSAMT") survey over the LMT
and the results of the modelling of ground NSAMT survey data
defined multiple discrete, very strong apparent conductors which
are consistent with the geological setting of the Nyanga intrusions
and will drive future drill programmes. In addition, two new
previously concealed targets, Libonga Central and Libonga Central
Extension have been identified between the existing Libonga North
and Libonga South targets. The untested apparent conductors are
consistent with the anticipated intrusion morphologies and are
likely associated with significant accumulations of magmatic
sulphides. As a result a 1,500 line-kilometre MobileMT survey, the
latest innovation in airborne electromagnetics, is planned at the
Nyanga Project and represents the first deployment of this airborne
technology on the African continent. This survey commenced on 30
November 2022 and was deployed over Armada's highest priority
targets along the Libonga-Matchiti Trend and the Ngongo-Yoyo Trend
at Armada's magmatic nickel-copper Nyanga Project.
Southern Gold Limited (ASX.SAU) appointed Exploration Manager,
Robert Smilie as Managing Director and CEO (based in South Korea).
He has overseen an ambitious and meticulous project generation
campaign. As at the end of 2022, SAU had 128 exploration licences
under application, covering an area of 358.69km(2) . In addition,
the company has significantly advanced work at the Deokon Au-Ag and
Goseong Cu-Au-Ag project areas towards drilling in Q1 2023, with
land access and permitting progressing well at both projects.
Detailed geologic mapping of drill target areas, drone aeromagnetic
survey over 17km(2) and two soil sampling programmes were completed
at Goseong. Furthermore, a geophysical gravity survey was conducted
at Deokon Au-Ag project covering 30km(2) , together with 3D
modelling of historic workings to develop new targets for drilling.
In addition, SAU diversified its exploration objectives, adding
Rare Earth Elements (REEs) and lithium-caesium-tantalum ("LCT")
pegmatite targets as a key part of the company's focus in South
Korea. In this regard, fieldwork commenced following successful
site visits to priority target areas in November 2022 defined by
geological consultant group RSC Consulting Ltd. In 2023, SAU will
lodge exploration applications over the most prospective REE and Li
areas in early 2023. Metal Tiger invested A$382,000 to maintain its
pro-rata holding as part of a A$2m private placement which was
underwritten by the three largest shareholders including Metal
Tiger. The Board looks forward to 2023 and the company drill
testing new targets and expanding its critical minerals exploration
footprint in South Korea. Metal Tiger notes that Southern Gold
maintains 150 million shares in London Stock Exchange ("LSE")
listed Bluebird Merchant Ventures Ltd which has a mark to market
value as at 24 February 2023 of circa A$4.6m.
In addition to the points raised above, there were several
material developments to Metal Tiger's equity and royalty interests
relating to Sandfire Resources Limited ("Sandfire") during the
financial year. Most importantly, Sandfire announced that it had
completed a positive definitive Feasibility Study "DFS" for the
5.2Mtpa Motheo Copper Project expansion, inclusive of the A4
Deposit Ore Reserve (over which Metal Tiger has an uncapped 2% net
smelter return ("NSR") royalty. This showed positive project
economics from an expanded 5.2Mtpa processing operation, mining
both the T3 and A4 Deposit and gave a pre-tax NPV7% of US$548m and
IRR of 29% using metal prices of Cu US$3.57/lb, Ag US$20/oz and a
10-year mine life. Metal Tiger is of the firm belief that timelines
for A4 have the potential to be progressed faster subject to
Environmental and Social Impact Assessment ("ESIA") although as of
today this has not yet been granted. In addition, Metal Tiger
expects its US$2m capped 2% NSR royalty over Motheo to be paid in
Q2/Q3 2023 given progress made by year end and announced
subsequently. On 20 October 2022,Sandfire announced extensive
structurally controlled copper-silver mineralisation over a 1.8km
strike length at the A1 Dome, 20km from the Motheo Copper mine was
announced by Sandfire. The A1 Dome is an area that is covered by
Metal Tiger's uncapped royalty. Highlights from the drilling
included holes with 11.5m @ 2.0% Cu and 9g/t Ag from 130.5m; 8m
@1.6% Cu and 3g/t Ag from 120m and 15m @ 1.4% Cu and 20g/t Ag from
135m. The Board is of the opinion that the A1 prospect has resource
potential and notes that the potential of the A1 prospect has been
not accounted for in the valuation of the uncapped royalty.
Sandfire produced 109,835 tonnes of copper, 97,732 tonnes of
zinc, 10,977 tonnes of lead, 10,977 ounces of gold and several
million ounces of silver in 2022. In 2022, mining completed at
DeGrussa with run-of-mine (ROM) sulphide ore having been depleted
and underground mining operations having ended at DeGrussa.
Construction of the 3.2Mtpa Motheo Copper Mine in Botswana
progressed largely on schedule and is scheduled for wet
commissioning and then first ore to the plant in Q1 2023. In July
2022, Sandfire announced an updated Proved and Probable Ore Reserve
estimate for MATSA of 37.1Mt at 1.6% Cu, 2.6% Zn, 0.8% Pb and
36.1g/t Ag containing an estimated 593Kt of copper, 975kt of zinc,
286kt of lead and 43.0Moz of silver with an estimated Net Smelter
Return of US$116/t (using an NSR cut-off). Proved Ore Reserve
estimate increased by 41% to 26.2Mt at 1.7% Cu and 2.7% Zn. On the
corporate side, Karl Simich announced his resignation as Managing
Director and CEO after 15 years at the helm of Sandfire. On 10
November 2022, Sandfire announced that it had appointed Brendan
Harris as CEO and Managing Director, to start in early April 2023.
Jason Grace is acting as Chief Executive Officer in the interim
period.
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. This segment will no longer form a part of the
Company's strategy going forward following the disposal of Kalahari
Metals Limited to Cobre Limited. Metal Tiger retains a significant
interest in Cobre Limited. The rationale for winding down this
division as well as selling Kalahari Metals Limited, is due to
several factors. Most importantly, the Board views Kalahari Metals
as a legacy investment and that funding exploration costs does not
match with the objectives and requirements of being an investing
company especially relative to the Company's asset base. For
example, post Cobre's acquisition (partial and complete) of
Kalahari Metals Limited, Cobre Limited has raised circa A$15m
before costs to advance exploration in the Kalahari Copperbelt. In
a 3-year period, Metal Tiger has only raised A$5m before costs.
Whilst Metal Tiger suffered a disposal loss of GBP833,000 there
is considerably more liquidity in Cobre shares and the projects are
now within a vehicle with a diversified shareholder base with a
considerable amount of capital to spend on exploration to drive the
value from the projects. Metal Tiger maintains an uncapped 2% NSR
royalty over Kitlanya East and Kitlanya West project areas. The
Company is pleased to note that Cobre's 2023 plans currently
include exploration activities and planned drilling on the Kitlanya
West project.
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 publication of
these accounts, 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.
The carrying value of Thailand has been written off at the
Company level and the licence applications are held at immaterial
amounts within Metal Tigers subsidiaries in Thailand ("Thai Group")
. Going forward the Thai Group will increasingly serve as a shared
services provider to Group companies.
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 each
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. The
investments that fall within this category include Cobre, Southern
Gold and Armada. The Board continually evaluate the active
investment portfolio, and accordingly this may change in
composition in the future. No new Active Investments were added to
the portfolio in 2022. Furthermore the Board does not expect to
make further additions to the active investment portfolio in the
near future.
Metal Tiger invests in listed mining equities via either initial
public offering ("IPO"), pre-IPO equity placings, or direct
on-market share purchases. Metal Tiger may receive warrants when
undertaking investments in pre-IPO, IPOs, or equity 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 but
can be private with a view to obtaining a liquidity event.
As at 31 December 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, South East Asia and
Australia. Metal Tiger held some exposure to producers.
Through its investments, Metal Tiger is primarily exposed to
copper and gold.
During 2022 the gold price fell approximately 2% year-on-year,
driven by pressure from US dollar strength. Rising interest rates
and a stronger US dollar as well as the expectation of continued
hawkish US Federal Reserve policy put a cap on the gold price for
most of 2022 in spite of increased investor demand for gold from
central banks globally as well as investors seeking a safe-haven
asset in light of the Russo-Ukraine war
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, the Company 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 investments in the year.
Summary of listed investments held at 31 December 2022
Value at
Listing year end
Investment Exchange Description No. of securities held GBP
Copper, gold
Sandfire and silver 4,762,626 ordinary shares
Resources mining and (held as collateral for
Limited ASX exploration collateral loan) 18,162,187
1,167,542 ordinary shares (held as security in structured
finance loan)
Cobre Base metal 46,989,136 ordinary
Limited ASX exploration shares 4,629,539
Southern Gold mining
Gold and 40,794,000 ordinary
Limited ASX exploration shares 574,167
Armada Nickel and
Exploration copper 15,000,000 ordinary
Limited ASX exploration shares 573,426
3,333,333 unlisted warrants
(A$0.334 expiry 22/11/2026)
Max Resource Copper
Corporation TSXV exploration 1,250,500 ordinary shares 216,264
675,000 unlisted warrants
(C$0.36, 25/03/2024)
350,000 unlisted warrants
(C$0.85, 17/05/2023)
Sable Gold and
Resources silver
Limited TSXV exploration 1,506,666 ordinary shares 101,114
Gold, copper 20,000 ordinary shares
Antilles exploration 2,333,333 unlisted
Gold and warrants (C$0.13 expiry
Limited ASX development 30/4/2023) 98,325
Greentech
Metals Nickel
Limited ASX exploration 1,100,000 ordinary shares 86,701
03 Mining
Inc TSXV 93,000 ordinary shares 85,705
Copper, gold
and cobalt
Artemis exploration
Resources and
Limited AIM/ASX development 3,476,430 ordinary shares 46,967
Graphite
Northern producer 330,000 unlisted warrants
Graphite and (C$1.10 expiry
Corporation ASX exploration 08/2/2024) 13,387
Lithium,
Ragusa halloysite
Minerals and gold
Limited ASX exploration 15,000 ordinary shares 9,711
Camino 2,941,176 unlisted
Minerals Copper warrants (C$0.25 expiry
Corp. TSXV exploration 18/5/2023) 5,708
Copper and
Avidian Gold gold 500,000 unlisted warrants
Corp TSXV exploration (C$0.2 expiry 8/6/2024) 1,959
Inflection Copper and
Resources gold 234,375 unlisted warrants
Limited CSE exploration (C$0.5 expiry 14/5/2023) 1,559
Pearl Gull
Iron Iron Ore 550,000 unlisted warrants
Limited ASX exploration (A$0.3 expiry 6/9/2024) 1440
Anacortes Copper and
Mining gold 104,167 unlisted warrants
Corp. TSXV exploration (C$3.3 expiry 22/7/2023) 109
Apollo Gold Gold and 110,000 unlisted warrants
and Silver silver (C$1.25 expiry
Corporation TSXV exploration 05/7/2023) 16
Molyhil 5,769,231 unlisted
Thor Mining Tungsten warrants (1.3p expiry
plc AIM/ASX Project 17/08/2023) 4
Palladium Nickel and 170,000 unlisted warrants
One Mining copper (C$0.45 expiry
Inc. TSVX exploration 22/2/2023) 1
Summary of unlisted investments held at 31 December 2022
No. of
Listing securities Value at
Investment Exchange Description held year end GBP
3,840,909
ordinary
Tally Limited Private Gold currency shares 57,614
625,000
ACDC Metals Rare earths ordinary
Limited* Private exploration shares 56,299
854,545
Eridge Capital ordinary
Limited Private shares 513
*Listed on 17 January 2023 on the ASX.
Summary of investments made between 31 December 2022 and the
date of release of the preliminary final report
No. of
Listing securities Investment
Investment Exchange Description acquired made GBP
16,608,696
Southern Gold Gold mining and ordinary
Limited ASX exploration shares 214,799
Newmont 2,400 ordinary
Corpration* NYSE Gold producer shares 103,278
Barrick Gold 5,400 ordinary
Corporation*/** NYSE Gold producer shares 84,706
135,000
ACDC Metals Rare earths ordinary
Limited ASX exploration shares 14,374
Rare earth,
Dreadnought gold, nickel, 3,000,000
Resources copper ordinary
Limited* ASX exploration shares 172,950
700,000
Omega Oil & Gas Oil and gas ordinary
Limited* ASX exploration shares 76,661
*Denotes new additions to the portfolio since the year end.
**Denotes fully exited by the date of the report.
During the year the segment acquired investments at a total cost
of GBP8,034,000 and disposed of investments for GBP14,600,000 and a
realised loss of GBP1,156,000. After considering the revaluation of
the investments the net assets of the segment decreased by
GBP10,958,000 during the year to GBP24,565,000 (2021:
GBP35,523,000).
After accounting for the profit on disposals, dividends received
and the revaluation of investments at the year end, the equity
investments segment recorded a net loss of GBP4,753,000 for the
year versus a profit in 2021 of GBP3,454,000.
Results for the year
Administration costs for the year were GBP2,607,000 (2021:
GBP2,108,000). With legal fees payment costs stripped out from the
respective years, the adjusted costs total GBP2,169,000 (2021:
GBP1,984,00). The legal fees were mostly incurred in respect of
corporate strategy and compliance work, with the Company being
registered as an AIFM as well as having incurred costs in assessing
and transitioning away from a multifaceted Company to one more
reflective of an investment and royalty owning Company. The Board's
continuous drive for efficiencies which remain ongoing, and the
organizational chart and structure is continuously assessed for
appropriateness and whether fit for purpose. Whilst there will be
some further once off costs to be born during 2023 in this regard,
the Board believes it is the correct strategic decision and
provides the Company with the best chance to best serve the
interests of the shareholders over the medium term.
As more fully detailed in the commentary in the Projects
Investment section, the Company has disposed of all its remaining
interest in its joint venture Kalahari Metals to Cobre, recognising
a loss on this sale of interest in the amount of GBP833,000 (2021:
profit of GBP21,000), after recognising the Company's proportionate
share of losses until sale date of GBP116,000 (2021:
GBP493,000)
There was an overall loss in the year resulting from the
disposals and fair valuing of investments during the year of
GBP5,110,000 (2021: gain of GBP1,830,000). This reflects market
conditions in the year and more specifically in the Sandfire
position which contributed to GBP3,775,000 of the losses. Cobre
outperformed and contributed a gain of GBP1,390,000 which was
somewhat paired by unrealised losses in our active investments in
Armada of GBP629,000 and Southern Gold of GBP546,000. The Board's
conviction in the active investment strategy remains comfortable
but notes that the Company is 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 Company received lower dividend income of GBP146,000 (2021:
GBP1,538,000), primarily, as a result of Sandfire ceasing to
declare a second dividend and rather investing the capital in
developing its assets and acquisitions. The Company had net finance
income of GBP1,949,000 (2021: costs of GBP1,787,000) mainly
relating to the accretion of the royalty asset, which released
GBP876,000 of finance income, other contributors being the change
in the value of the derivatives that hedge and secure the Group's
structured finance loans with a gain of GBP876,000 (2021: loss
GBP1,269,000). The value of the derivative inherently moves in
contrast to the performance of the underlying share price over
which the derivative is priced, being in our instance Sandfire.
Finally, a further contributor to the finance income were foreign
exchange gains for the year of GBP1,061,000 (2021: loss of
GBP500,000), primarily reflecting the weakness of the Pound
Sterling over the year and in particular versus our US dollar
denominated financial assets.
The Board decided not to revalue the Company's 2% net smelter
return ("NSR") royalty over circa 8,000km(2) of Sandfire's
exploration tenements and in-particular the licence that holds the
A4 project, which was material contributor to the results of the
Company during 2021 (GBP5,214,000), the Board is of the view its
prudent and appropriate to wait on any updates on the size of
Sandfire's A4 copper/silver Mineral Resource. The Board did however
consider the carrying value of the Royalty and the assumptions used
in testing the same are enclosed in Note 7.
All told the loss for the year on ordinary activities before tax
was GBP6,678,000 (2021: profit of GBP4,215,000).
Cashflow and financing
Disposals from equities during the year raised GBP14,600,000 and
a further net GBP8,034,000 was invested into the purchase of
equities and other investments. Operational cash outflows before
working capital changes amounted to GBP2,474,000 (2021:
GBP2,009,000), with the increased cash utilisation driven by the
same drivers of the increase in administrative expenses.
The net cash requirement for operations, was met out, dividends
received, the net proceeds of sales of investments and joint
venture interests after having accounted for the net the repayment
of loans during the year and finally to increase cash reserves at
the end of the year.
Cash in hand at the end of the year was GBP885,000 (2021:
GBP648,000).
No dividend has been declared or recommended during the year
under review (2021: Nil)
Condensed Consolidated Statement of Comprehensive Income
For the year ended 31 December 2022
Unaudited Audited
Year ended Year ended
31 December 31 December
2022 2021
Notes GBP'000 GBP'000
(Loss)/profit on sale/partial sale of
interests in explorations in Botswana (833) 21
(Loss)/Profit on disposal of investments (1,156) 1,979
Movement in fair value of fair value
accounted equities (3,954) (149)
Share of post-tax losses of equity
accounted joint ventures (116) (493)
Provision against cost of long term
investments (107) -
Investment income 146 1,538
Other income 7 - 5,214
Net (loss)/gain before administrative
expenses (6,020) 8,110
Administrative expenses (2,607) (2,108)
Operating (loss)/profit (8,627) 6,002
Finance income 2,854 467
Finance costs (905) (2,254)
(LOSS)/Profit before taxation 3 (6,678) 4,215
Tax on profit on ordinary activities 4 49 (49)
(lOSS)/Profit on ordinary activities after
taxation (6,629) 4,166
Other comprehensive income - Items which
may be
subsequently reclassified to profit or
loss:
Exchange differences on translation of
foreign operations (306) 410
Total comprehensive (LOSS)/profit for the
YEAR (6,935) 4,576
(loss)/Profit for the YEAR attributable to:
Owners of the parent (6,629) 4,166
Non-controlling interest - -
(LOSS)/Profit for the YEAR (6,629) 4,166
Total comprehensive (LOSS)/profit for the
YEAR attributable to:
Owners of the parent (6,937) 4,579
Non-controlling interest 2 (3)
Total comprehensive (LOSS)/profit for the
YEAR (6,935) 4,576
(LOSS)/Earnings per share
Basic (loss)/earnings per share 5 (3.91p) 2.59p
Fully diluted (loss)/earnings per share 5 (3.91p) 2.59p
Condensed Consolidated Statements of Financial Position
At 31 December 2022
Unaudited
Year ended Audited
31 December Year ended
2022 31 December 2021
Notes GBP'000 GBP'000
Non--current assets
Intangible assets 18 21
Property, plant and equipment 145 19
Deferred tax asset 4 2,213 2,164
Investment in joint ventures - 2,873
Other non-current asset investments 6 - 3,613
Royalties receivable 7 12,753 10,593
15,129 19,283
Current assets
Equity investments accounted for
under fair value 8 24,565 32,031
Trade and other receivables 624 477
Amounts due from related parties 9 - -
Cash and cash equivalents 885 648
26,074 33,156
Current liabilities
Trade and other payables 594 312
Amounts due to related parties 9 - -
Loans and borrowings 10 6,291 8,732
6,885 9,044
NET CURRENT ASSETS 19,189 24,112
Non-current liabilities
Loans and borrowings 10 - 2,242
Deferred tax liability 4 2,213 2,213
Contingent consideration 132 118
2,345 4,573
Net assets 31,973 38,822
Capital and reserves
Share capital 170 170
Share premium account 15,704 15,704
Capital redemption reserve 4 4
Share based payment reserve 2,279 2,343
Warrant reserve 83 3,048
Translation reserve 43 351
Retained profits 13,600 17,114
Total shareholders' funds 31,883 38,734
Equity non-controlling interests 90 88
Total equity 31,973 38,822
Condensed Consolidated Statement of Cash Flows
For the year ended 31 December 2022
Unaudited
Year ended Audited
31 December Year ended
2022 31 December 2021
GBP'000 GBP'000
Cash flows from operating activities
(Loss)/Profit before taxation (6,678) 4,215
Adjustments for:
Loss/(Profit) on partial sale of interests
in explorations in Botswana 833 (21)
Loss/(Profit) on disposal of investments 1,156 (1,979)
Movement in fair value of fair value
accounted equities 3,954 149
Share of post-tax losses of equity
accounted joint ventures 116 493
Movement In provision in, and write-offs
of, long term investments 107 -
Share based payment charge for the year 86 86
Depreciation and amortisation 47 13
Other income - (5,214)
Investment income (146) (1,538)
Finance income (2,854) (467)
Finance costs 905 2,254
Operating cash flow before working capital
changes (2,474) (2,009)
Decrease/(Increase) in trade and other
receivables (147) 72
Decrease in trade and other payables 282 (11)
Unrealised foreign exchange gains and
losses 110 (387)
Net cash outflow from operating activities (2,229) (2,335)
Cash flow from Investing activities
Proceeds from current asset investment
disposals 14,600 13,434
Purchase of fixed assets (165) (9)
Sale of investment in, and loans to, joint
ventures 2,046 (453)
Purchase of current asset investments (8,034) (18,676)
Investment income 146 1,538
Net cash inflow/(outflow) from investing
activities 8,593 (4,166)
Cash flows from financing activities
Proceeds from issue of shares - 3,191
Share issue costs - (217)
Loans drawn down 4,620 4,829
Loans repaid (9,846) (618)
Interest paid (905) (491)
Net cash (outflow)/inflow from financing
activities (6,131) 6,694
Net increasein cash and cash equivalents 233 193
Cash and cash equivalents at beginning of
year 648 458
Effect of exchange rate changes 4 (3)
Cash and cash equivalents at end of YEAR 885 648
Condensed Consolidated Statement of Changes in Equity
For the year ended 31 December 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
Profit for the
year ended 31
December
2021 - - - - - - 4,166 4,166 - 4,166
Other
comprehensive
income - - - - - 413 - 413 (3) 410
Total
comprehensive
income - - - - - 413 4,166 4,579 (3) 4,576
Share issues 17 3,174 - - - - - 3,191 - 3,191
Warrants
issued - - - - 84 - - 84 - 84
Cost of
share-based
payments - - - 86 - - - 86 - 86
Transfer of
reserves
relating to
exercise and
expiry of
options and
warrants - - - - (2,512) - 2,512 - - -
Share issue
expenses - (301) - - - - - (301) - (301)
Total changes
directly to
equity 17 2,873 - 86 (2,428) - 2,512 3,060 - 3,060
Balance at 31
December
2021 170 15,704 4 2,343 3,048 351 17,114 38,734 88 38,822
Loss for the
year ended 31
December
2022 - - - - - - (6,629) (6,629) - (6,629)
Other
comprehensive
income - - - - - (308) - (308) 2 (306)
Total
comprehensive
income - - - - - (308) (6,629) (6,937) 2 (6,935)
Cost of
share-based
payments - - - 86 - - - 86 - 86
Transfer of
reserves
relating to
exercise and
expiry of
options and
warrants - - - (150) (2,965) - 3,115 - - -
Total changes
directly to
equity - - - (64) (2,965) - 3,115 86 - 86
Balance at 31
December
2022 170 15,704 4 2,279 83 43 13,600 31,883 90 31,973
Notes to the unaudited condensed preliminary final report
For the year ended 31 December 2022
1. Basis of preparation
The condensed financial statements included in the preliminary
final report 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. 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 year ended 31 December 2022
and no retrospective adjustments were required.
The condensed preliminary final report were approved by the
Board of Metal Tiger on 27 February 2023. The condensed preliminary
final report for the year ended 31 December 2022 do not constitute
statutory accounts within the meaning of section 434 of the
Companies Act 2006. The condensed preliminary final report is
unaudited. The comparatives for the year ended 31 December 2021 are
not the Group's full statutory accounts for that year 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 31 December 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.
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of the condensed preliminary final report makes
use of estimates and assumptions that affect the reported amounts
of assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the
reporting year. These estimates and assumptions are based upon
management's knowledge and experience of the amounts, events or
actions. Actual results may differ from such estimates.
Going concern
The condensed preliminary final report has been prepared on the
going concern basis as, in the opinion of the Directors, at the
time of approving the condensed preliminary final report, there is
a reasonable expectation that the Company will continue in
operational existence for the foreseeable future. The condensed
preliminary final 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
year.
Investments made are capitalised as an asset where the
underlying projects have mineral resources which are compliant with
internationally recognised mineral resource standards (JORC and NI
43-101) or where the investment is to acquire an interest in an
investment or associate that holds commercial information, assets
or strategic features against which a current commercial value can
be reasonably assessed.
The JORC Code, the Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves, is a
professional code of practice that sets minimum standards for
public reporting of mineral exploration results, mineral resources
and ore reserves. NI 43-101 is a national instrument for the
Standards of Disclosure for Mineral Projects within Canada which
provides a codified set of rules and guidelines for reporting and
displaying information related to mineral properties owned by, or
explored by, companies which report these results on stock
exchanges within Canada.
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 taking into
account the terms of the warrant and discounting for the
non-tradability of the warrants where appropriate. Both pricing
models use inputs relating to expected volatility that require
estimations. No value is ascribed to warrants which include terms
which cause the exercise price to be dependent on events outside
the control of the Group and outcomes which are unable to be
predicted with any certainty.
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 are 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 year 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
eachreporting 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 year 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
Equity Project Central
Year ended 31 Investments Investments costs Inter-company Total
December 2022 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
COMPREHENSIVE
INCOME:
Net (loss)/gain
on
investments (5,071) (949) - - (6,020)
Intercompany
sales - 63 - (63) -
Administrative
expenses (77) (484) (2,109) 63 (2,607)
Net finance
income/(cost) 395 1,130 424 - 1,949
(Loss)/profit
on ordinary
activities
before
taxation (4,753) (240) (1,685) - (6,678)
Taxation - - 49 - 49
(Loss)/profit
for the year
after
taxation (4,753) (240) (1,636) - (6,629)
FINANCIAL
POSITION:
Intangible
assets - 18 - - 18
Property, plant
and equipment - 145 - - 145
Deferred tax
asset - - 2,213 - 2,213
Royalties
receivable - 12,753 - - 12,753
Total
non-current
assets - 12,916 2,213 - 15,129
Current assets 24,565 450 1,059 - 26,074
Current
liabilities - (257) (6,628) - (6,885)
Non-current
liabilities - (132) (2,213) - (2,345))
Net assets 24,565 12,977 (5,569) - 31,973
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 include interests in precious, strategic and
energy metals and also house the net smelter return ("NSR") royalty
portfolio, with the last remaining project located in Botswana,
having been sold in 2022, the segment will be renamed Royalty
segment in future years 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
Equity Project Central
Year ended 31 Investments Investments costs Inter-company Total
December 2021 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
COMPREHENSIVE
INCOME:
Net (loss)/gain
on
investments 3,368 (472) - - 2,896
Intercompany
sales - 46 - (46) -
Other income - 5,214 - - 5,214
Administrative
expenses (14) (332) (1,808) 46 (2,108)
Net finance
income/(cost) 100 (48) (1,839) - (1,787)
(Loss)/profit
on ordinary
activities
before
taxation 3,454 4,408 (3,647) - 4,215
Taxation - - (49) - (49)
(Loss)/profit
for the year
after
taxation 3,454 4,408 (3,696) - 4,166
FINANCIAL
POSITION:
Intangible
assets - 21 - - 21
Property, plant
and equipment - 19 - - 19
Deferred tax
asset - - 2,164 - 2,164
Investment in
joint
ventures - 2,873 - - 2,873
Other fixed
asset
investments 3,506 - 107 - 3,613
Royalties
receivable - 10,593 - - 10,593
Total
non-current
assets 3,506 13,506 2,271 - 19,283
Current assets 32,030 3,404 833 (3,111) 33,156
Current
liabilities (13) (3,230) (8,912) 3,111 (9,044)
Non-current
liabilities - (118) (4,455) - (4,573)
Net assets 35,523 13,562 (10,263) - 38,822
3. Segmental reporting (continued)
Geographical segments
Year ended 31 UK EMEA Asia-Pacific Australasia Americas Inter-company Total
December 2022 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
COMPREHENSIVE
INCOME:
Net (loss)/gain
on investments (64) (918) - (4,342) (696) - (6,020)
Intercompany
sales - - 63 - - (63) -
Administrative
expenses (1,989) - (415) (216) (50) 63 (2,607)
Net finance
income/(expense) (403) 2,158 296 (285) 183 - 1,949
(Loss)/profit on
ordinary
activities
before taxation (2,456) 1,240 (56) (4,843) (563) - (6,678)
Taxation 49 - - - - - 49
(Loss)/profit for
the year after
taxation (2,407) 1,240 (56) (4,843) (563) - (6,629)
FINANCIAL
POSITION:
Intangible assets - - 18 - - - 18
Property, plant
and equipment - - 145 - - - 145
Deferred tax
asset 2,148 - - - - - 2,148
Royalties
receivable - 12,753 - - - - 12,753
Total non-current
assets 2,148 12,753 163 - - - 15,064
Current assets 1,303 - 460 24,065 246 - 26,074
Current
liabilities (205) - (257) (6,383) - - (6,845)
Non-current
liabilities (2,213) - (132) - - - (2,345)
Net assets 1,033 12,753 234 17,682 246 - 31,948
3. Segmental reporting (continued)
Geographical segments
Year ended 31 UK EMEA Asia-Pacific Australasia Americas Inter-company Total
December 2021 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
COMPREHENSIVE
INCOME:
Net (loss)/gain
on investments 49 (472) - 3,545 (226) - 2,896
Intercompany
sales - - 46 - - (46) -
Other income - 5,214 - - - - 5,214
Administrative
expenses (1,644) (30) (298) (164) (18) 46 (2,108)
Net finance
income/(expense) 314 502 (528) (2,077) 2 - (1,787)
(Loss)/profit on
ordinary
activities
before taxation (1,281) 5,214 (780) 1,304 (242) - 4,215
Taxation (49) - - - - - (49)
(Loss)/profit for
the year after
taxation (1,330) 5,214 (780) 1,304 (242) - 4,166
FINANCIAL
POSITION:
Intangible assets - - 21 - - - 21
Property, plant
and equipment - - 19 - - - 19
Deferred tax
asset 2,164 - - - - - 2,164
Investment in
joint ventures - 2,873 - - - - 2,873
Other fixed asset
investments 107 - - 3506 - - 3,613
Royalties
receivable - 10,593 - - - - 10,593
Total non-current
assets 2,271 13,466 40 3,506 - - 19,283
Current assets 1,501 - 3,412 29,629 1,725 (3,111) 33,156
Current
liabilities (93) - (3,227) (8,835) - 3,111 (9,044)
Non-current
liabilities (2,213) - (117) (2,243) - - (4,573)
Net assets 1,466 13,466 108 22,057 1,725 - 38,822
4. Taxation
Unaudited Unaudited
Year ended Year ended
31 December 31 December
2022 2021
GBP'000 GBP'000
Current tax on income for the year - -
Deferred tax 49 (49)
Total tax charge for the year 49 (49)
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 Audited
Year ended Year ended
31 December 31 December
2022 2021
Factors affecting the tax charge GBP'000 GBP'000
(Loss)/profit before tax (6,678) 4,215
Loss/(profit) before tax multiplied by rate of
corporation tax in the UK of 19% (2021: 19%) 1,269 (801)
Overseas profits/(losses) taxed at different rates (40) (48)
Changes in rate at which deferred tax is provided (11) 103
Chargeable (gains)/losses arising 219 (514)
Income not chargeable to tax - 639
Expenses not allowable for tax (1,025) (40)
Unprovided prior year deferred tax 24 -
Deferred tax gains and losses not recognized (387) 612
Total tax 49 (49)
Movements in deferred tax assets and liabilities during the year
and the amounts outstanding at the year end are as follows:
Assets Liabilities Net
Deferred tax asset/(liability) GBP'000 GBP'000 GBP'000
At 31 December 2020 - - -
Adjustment for prior years 909 (909) -
Charge for the year 1,255 (1,304) (49)
At 31 December 2021 2,164 (2,213) (49)
Adjustment for prior years (24) - (24)
Charge for the year 73 - 73
At 31 December 2022 2,213 (2,213) 0
5. Earnings per share
Unaudited Audited
Year ended Year ended
31 December 31 December
2022 2021
GBP'000 GBP'000
(Loss)/Profit attributable to equity holders of
the Company (6,629) 4,166
Shares used for calculation of basic EPS* 169,423,576 160,776,895
Shares used for calculation of fully diluted EPS* 169,423,576 160,776,895
(LOSS)/Earnings per share
Basic (loss)/earnings per share (3.91p) 2.59p
Fully diluted(loss)/earnings per share (3.91p) 2.59p
No share options and warrants outstanding at 31 December 2022
were dilutive as the exercise price of any share options or
warrants outstanding at 31 December 2022 was higher than the
average market price of ordinary shares during the year.
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 31 December 2022. No share options
and warrants outstanding at 31 December 2021 were dilutive as the
exercise price of any share options or warrants outstanding at 31
December 2021 was higher than the average market price of ordinary
shares during the year. 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 31
December 2021.
6. Other non-current assets/liabilities
Audited
Unaudited Year ended
Year ended 31 31 December
December 2022 2021
GBP'000 GBP'000
Other non-current asset investments - 3,613
Other non-current liabilities (2,345) (4,573)
(2,345) (960)
Unaudited 30 Audited
December 2022 31 December 2021
Other non-current asset Comprising: GBP'000 GBP'000
Equity investments - 4,126
Derivatives* - (620)
Other fixed asset investments - 107
- 3,613
*Movements in derivative values in the
respective years 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 - 4,126
Level 3 -- unquoted fixed asset
investments and derivatives - (513)
- 3,613
7. Royalties receivable
T3 A4 Total
Group and Company GBP'000 GBP'000 GBP'000
At 31 December 2020 1,228 3,638 4,866
Net amortisation of discount on acquisition* 74 393 467
Periodic revaluation- Other income - 5,214 5,214
Translation effects 13 33 46
At 31 December 2021 1,315 9,278 10,593
Net amortisation of discount on acquisition* 78 803 881
Periodic revaluation- Other income - - -
Translation effects 169 1,110 1,279
At 31 December 2022 1,562 11,191 12,753
*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
Resources Ltd in 2018 and ultimately Sandfire. The royalty is
capped at US$2m and is expected to result in a receipt thereof in
the final quarter of 2023.
The A4 royalty is an uncapped 2% Net Smelter Return royalty over
the any future production over the A4 deposit situated in Botswana
and owned by Sandfire. In initially assigning a value to the
royalty in 2020, the Company relied inter alia on the announcement
released by Sandfire to the market on 1 December 2020.
The Company again predominantly relied on the announcement
released by Sandfire to the market on 2 September 2021 together
with other consensus information readily available in the market to
determine the revised carrying value of the royalty as of 31
December 2021.
As a consequence of there being no significant market
announcements on the size and extent of the resource over the A4
royalty during the year, the Company tested the carrying value
based on the unadjusted resource size, whilst iterating for the
likely adjusted cash flow timelines and the relevant periods
consensus copper price information readily available in the market,
the Company determined the carrying value as of 31 December 2021,
adjusted for the release of the accretion of the time value of
money discount, remains appropriate as of 31 December 2022.
The following table illustrates the key considerations and
assumptions the Company considered in determining the value of the
value by using the net present value of the cash flows expected
from the royalty as discounted.
2022 2021
Resource size MT 9,700,000 9,700,000
Resource grade Copper 1.17% 1.17%
Medium term copper
price-weighted average US$/MT U$9.593 U$9.078
Mining recovery Copper 92.3% 92.3%
Concentrate recovery Copper 92.2% 92.2%
Medium date at which time 50%
of the royalty will have been
received 3(rd) Quarter 2027 3(rd) Quarter 2025
Discount rate 7% 7%
7. Royalties receivable (continued)
The following table illustrates the sensitivity of the net value
of the A4 royalty, to changes to the material valuation
components.
2022 2021
GBP'000 GBP'000
5% Increase in Resource size 560 462
5% Decrease in Resource size (560) (462)
5% Increase in medium term copper price 560 462
5% Decrease in medium term copper price (560) (462)
Cash flow medium date at which time 50% of the royalty
will have been received 1 year earlier 710 606
Cash flow medium date at which time 50% of the royalty
will have been received 1 year earlier (710) (606)
8. Equity investments accounted for under fair value
Unaudited Audited
31 December 2022 31 December 2021
GBP'000 GBP'000
Categorised under the IFRS 13 fair
value hierarchy as:
Level 1 - quoted investments 24,522 31,262
Level 3 -- unquoted investments --
equity investments 114 212
Level 3 -- unquoted investments --
warrants 102 816
Level 3 -- unquoted investments --
derivatives structured loan (173) (259)
24,565 32,031
9. Amounts due from/(to) to related parties
Unaudited Audited
31 December 2022 31 December 2021
GBP'000 GBP'000
Kalahari Metals Limited - -
Kalahari Metals was Metal Tiger's sole joint venture interest.
The Company sold its remaining stake during the year (2021 : 49%)
direct ownership stake. The Company has no amount owing to it from
Kalahari Metals as at 31 December 2022 (2021: GBP839,000). In prior
years the Company treated the loan in terms of the substance of the
agreement as part of the investment in joint ventures.
10. Loans and borrowings
Unaudited Audited
31 December 2022 31 December 2021
GBP'000 GBP'000
At 1 January 10,974 7,103
Net cash flows from financing
activities (5,226) 4,211
Drawn down in year 4,620 4,829
Repaid in year (9,846) (618)
Translation differences * 543 (340)
At 31 December 6,291 10,974
*non cash flow
Included in the above are loans amounting in aggregate to
A$4,084,612 (2021: A$11,351,476) which are secured by 1,167,542
shares in the capital of Sandfire (2021: 2,842,667 shares). The
loans are repayable in full on the following dates:
GBP'000
8 May 2023 542
9 June 2023 556
10 July 2023 559
7 July 2023 83
8 December 2023 560
2,300
Also included in the amount owing is a loan amounting to
A$7,001,306 (2021: A$9,000,000) which is secured by a collateral
agreement over 4,762,626 (2021: 4,714,286) shares in the capital of
Sandfire and attracts interest at a floating rate determined to be
the quoted 30 day BBSY Bid plus a margin of 8%, which equated to an
interest rate of 11.01% at 31 December 2022 (2021:10%)
The loan is repayable in full on 15 December 2023, with the
Company having the option to extend the repayment date to 15
December 2024 at a fee of 3% of the revolving maximum facility
commitment of A$15,000,000.
Loans and borrowings are classified in accordance with their
contractual repayment profiles as:
Unaudited Audited
31 December 2022 31 December 2021
GBP'000 GBP'000
Non-current liabilities -- Loans and
borrowings - 2,242
Current Liabilities -- Loans and
borrowings 6,291 8,732
6,291 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 year. The total charge to operating profit/loss
for the year amounted to GBP86,000 for the year (2021:
GBP86,000).
12. Distribution of Preliminary Final Report and Registered
Office
A copy of Preliminary Final 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").
View source version on businesswire.com:
https://www.businesswire.com/news/home/20230227005740/en/
CONTACT:
Metal Tiger plc
SOURCE: Metal Tiger plc
Copyright Business Wire 2023
(END) Dow Jones Newswires
February 28, 2023 02:00 ET (07:00 GMT)
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