Copper-focused junior MOD Resources has executed binding agreements with Metal Tiger to acquire its 30% stake in the T3 copper project, giving MOD 100% of T3.
The total value of the consideration for the transaction equates to approximately A$26.6 million, comprising the following securities to be issued to MTR upon completion:
Significant restriction apply to Metal Tiger (MTR), including a 12 month escrow on all shares issued to MTR as consideration pursuant to the transaction, or issued as a result of the conversion of Options.
The transaction is approximately 14% accretive on a fully diluted basis for MOD shareholders in terms of their respective ownership of the T3 project.
Importantly, MOD Resources shareholders will receive additional value through several rights.
The rights may be exercised at MOD Resources’ election and the company may choose to pay for the exercise through any combination of cash or scrip.
This allows MOD Resources to determine, prior to exercise, whether acquisition of any JV Exploration Assets will be accretive, and what form of consideration maximises value for its shareholders.
The rights enable MOD Resources to acquire MTR’s 30% interest in MTR’s JV exploration assets only when these assets have been proven to have development potential.
MOD’s 100% held licences in Botswana are not affected by this transaction including the T1 underground project.
“The MOD board believes this binding agreement with Metal Tiger has the potential to add significant value for MOD shareholders,” comments MOD Resources MD Julian Hanna.
“Firstly, it will consolidate ownership of the very substantial T3 copper project which, assuming a decision to mine is made in early 2019, should underpin the future of this company for many years.
“Secondly, it provides a very flexible structure for MOD, with options to acquire MTR’s interests in any new discoveries that reach the scoping study level within three years, and an option to consolidate the remaining exploration assets three years after completion.
“This transaction also lays the foundation for the financing and development of the T3 project and positions MOD as a dominant player in the Botswana Copper belt.”