TIDMMTR
Metal Tiger PLC
05 December 2017
Metal Tiger plc (MTR)
05 December 2017
Metal Tiger Plc
("Metal Tiger" or the "Company")
Kingsgate shareholder meeting provides an opportunity for a new
board and superior Thailand solution
Metal Tiger Plc (LON:MTR), is pleased to announce that Kingsgate
Consolidated Limited (Kingsgate) has confirmed Kingsgate
shareholders will be given an opportunity to elect a new board at a
meeting in Sydney on 9 January 2018.
The meeting will enable Kingsgate shareholders to support five
new directors who have a clear vision for the company after years
of poor performance and a massive destruction of shareholder
value.
Metal Tiger, Kingsgate's largest shareholder with a 6.7 per cent
interest, requested the Kingsgate shareholder meeting to remove all
but one member of the board, and proposed that five new directors
be appointed, including three directors of Metal Tiger. If you
would like to contact Metal Tiger to discuss this further, please
click here.
Metal Tiger encourages its fellow Kingsgate shareholders to vote
in favour of all resolutions, which will result in a new, highly
capable Kingsgate board that is committed and capable of restoring
shareholder value, unlike the existing Kingsgate board.
Kingsgate has also issued an Explanatory Memorandum, which Metal
Tiger Chief Executive Officer Michael McNeilly described as a
defensive and misleading document that reinforces the fact that
Kingsgate's future rests on the outcome of costly, high risk legal
proceedings. Metal Tiger will provide a detailed response to the
Explanatory Memorandum shortly.
"We encourage shareholders to vote in favour of all resolutions
to appoint a new board at Kingsgate," Mr McNeilly said. "We believe
the proposed directors have the experience, expertise and
relationships that can lead to the reopening of the Chatree Gold
Mine, Kingsgate's only operating asset, and restore value."
Metal Tiger acknowledges Kingsgate successfully mined the
higher-grade gold at Chatree to increase revenue and repay debt
after its metallurgical licence was renewed for only six months.
However, it is regrettable the situation in Thailand deteriorated
to that point. No doubt many Kingsgate shareholders have long been
hopeful of a resolution in Thailand.
Deep understanding of Thailand and issues surrounding
Chatree
Metal Tiger has a deep understanding of the issues surrounding
Chatree, contrary to what the Kingsgate Board has implied. Metal
Tiger has carefully assessed the asset and stakeholders, and has
developed a strong understanding of the mine's history and
potential issues.
Metal Tiger made its sizeable investment in Kingsgate on the
basis that there is tremendous value at Chatree, including
significant exploration upside. Metal Tiger has carefully
considered the new Minerals Act, the draft Mineral Royalty Act, the
draft Mineral Management Master Plan, the new Gold Policy and its
impacts, licence status (the limitations created by the pending
renewal of ML 25528/14714 at Pit-A), litigation status - both
locally and in Bangkok - community issues, environmental concerns,
appropriate Thai ownership concerns, and many other factors. Metal
Tiger spoke with Kingsgate Executive Chairman Ross Smyth-Kirk
before Kingsgate launched arbitration proceedings against the
Kingdom of Thailand to obtain his views on the company's prospects
and took these into consideration before taking action against the
Kingsgate Board.
Metal Tiger completed detailed technical and commercial due
diligence on Chatree for an extended period of time, including
in-country activities, and based on conservative assumptions the
findings confirmed the reopening of Chatree to be a compelling
proposition.
The simple fact is the reopening of Chatree, despite the cost
and challenges involved, is a more valuable proposition to
Kingsgate than the pursuit of expensive, potentially lengthy
arbitration proceedings where success is uncertain.
Going down the path of arbitration is an understandable last
resort if relationships are irreparably damaged and negotiations
are unable to proceed. However, while the current Kingsgate
management and ownership structure remains in place, Metal Tiger
does not believe this tactic will deliver a result that satisfies
both the Thailand Government and Kingsgate.
Kingsgate funding concerns
Based on Metal Tiger's research and analysis of similar claims,
Kingsgate is going to need substantially more capital to finance
its current strategy unless the Company is successful in obtaining
a settlement from Zurich. However, Kingsgate has previously
acknowledged there is no guaranteed outcome and that they are
"hoping" for a result in June/July of next year.
Quite simply, Kingsgate is rapidly burning through cash and has
no clear long-term funding strategy in place to pursue its
litigation strategy should things not work out as hoped or
expected, which they rarely do.
Worryingly, Kingsgate has not made shareholders aware of the
amount they believe is owed to them as possible compensation should
an award be made in arbitration. Numerous media reports have
suggested large sums but neither Kingsgate nor the Thailand
Government have publicly confirmed these figures.
Support a new Kingsgate Board
"We believe Chatree can be restarted, subject to a new line of
approach with the Thailand Government and subject to appropriate
restructuring, and we are aware of interest from investors in
Europe, North America, Asia and the Middle East to help finance the
restart," Mr McNeilly said. "But it is our view that such a
strategy can only be implemented under a new Board given the
bridges that have been burned by Kingsgate's incumbent directors.
This is not about Metal Tiger gaining control of Kingsgate, this
about change for the benefit of all shareholders."
Metal Tiger encourages Kingsgate shareholders to support all
resolutions and install a Board that can reopen Chatree and restore
much-needed value at Kingsgate.
For further information on the Company, visit:
www.metaltigerplc.com:
Michael McNeilly (Chief Executive Officer) Tel: +44(0)20 7099 0738
Keith Springall (Finance Director & Company Secretary) Tel: +44 (0)20 7099 0738
Gordon Poole Camarco Tel: +44 (0)20 3757 4980
James Crothers (Financial PR)
Australian Media
Michael Weir Citadel-MAGNUS +61 402 347 032
Yvonne Ball Citadel-MAGNUS +61 448 232 398
This information is provided by RNS
The company news service from the London Stock Exchange
END
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