Metal Tiger plc has moved a step closer to finalising its investment in the Boh Yai and Song Toh silver-lead-zinc mines in Kanchanaburi Province of western Thailand through the signing of a Standstill Letter Agreement (SLA).
The agreement is between Metal Tiger, its 90%-owned Thai subsidiary Southeast Asia Exploration and Mining Co Ltd (SEAM) and the owners of the mines.
The SLA provides for a three month standstill agreement allowing time for the parties to undertake due diligence and to formulate a formal joint venture agreement. A JV would see the parties work together to secure mine permitting and complete rehabilitation works with a view to bringing the mines back into production at the earliest opportunity.
In consideration for entering into the SLA Metal Tiger will pay the mine owners US$80,000 and US$50,000 in Metal Tiger shares priced at the closing price on April 8 which equates to 874,025 new Metal Tiger ordinary shares.
During the standstill period the mine owners agree not to engage in external discussions with or seek to dispose of their interest in the mines to, any other third party, save for Metal Tiger and SEAM.
The parties are now at a very advanced stage of discussions with a view to forming a JV agreement at the earliest opportunity. Specifically detailed plans have been drawn up for mine permitting and the rehabilitation process, and the parties are identifying the professional advisers and processes to be implemented, when a JV agreement has been reached.
Metal Tiger CEO Paul Johnson said, “The announcement marks a major step forward. Rehabilitation of the mines will be a tremendously positive step forward for the local community given the many hundreds of jobs that will be created over the life of mine. The high-grade nature of the mineralisation, combined with established mine, infrastructure and processing plant, makes this a unique commercial opportunity for all parties.
“SEAM’s engagement with the mine owners over many years has formed the basis for a very strong and trusting commercial relationship. That is something all parties wish to preserve and nurture. Our work in recent months has been very positive and we would like to thank the mine owners and our advisers in Thailand for their assistance, professionalism and commerciality.
“Mine planning works and negotiations are very advanced, and it is the desire of all parties to conclude a commercial transaction at the earliest opportunity.”