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Investors get their teeth into Metal Tiger

Metal Tiger shares shot up today after the small-cap mining specialist told investors that it’s on the road to growth and is now able to self-finance activities.
Investors get their teeth into Metal Tiger

Rocked by a three-year-old downturn in metal prices, investors in small cap mining stocks have been licking their wounds of late.

The same can't be said for AIM-listed Metal Tiger. Despite starting its new life at what many consider to be the bottom of the resource cycle, the firm has wasted no time rooting out opportunities.

Since its launch in mid-2014, the company has invested in three junior AIM stocks which it believes are on the cusp of major commercial development.

It has put £450,000 into Kibo Mining, £150,000 into Eurasia Mining and £75,000 into Ariana Resources.

Exploration joint ventures with third parties include gold, copper and antimony interests in Thailand, gold and tungsten in Spain and gold and uranium exploration in Tanzania.

Quick and confident progress in what's become a drawn-out bear market where traditional types of funding remain severely limited.

"Our goal is to take advantage of what we believe are the tremendous buying opportunities currently out there," chief executive Cameron Parry told Proactive Investors.

"Despite the challenging market, good companies remain good companies, and quality projects still need funds. From a contrarian perspective, the time to invest in those companies and exploration projects is when valuations are extremely low and general interest in the resource sector is minimal."

Although the firm wouldn't miss a bargain, Metal Tiger has made a large portion of its investment at mid-market prices, a move which Parry says shows respect.

"Injecting funds can be quite timely for these companies. We want to show respect for their value and don't want to break momentum or create a drag on their share price by investing at a heavily discounted price."

And, given that the market isn't paying any sort of premium for companies, the business finds itself in a fortunate position.

Overall, there are three core factors upon which Parry and his team, which includes ASX Top 200 Sirius Resources' (ASX:SIR) Terry Grammer as chairman, and ECR Minerals' (LSE:ECR) Paul Johnson as the other executive director, judge whether or not to get involved in a project or company.

First, the team finds people they believe can get the job done and build value, ie the quality of management.

Then it's a case of looking into the stage and development of the company or projects.  The third factor is the financial opportunity and the deal.

"While others are being defensive, we are being aggressive and I'm really bullish about our window of opportunity," adds Parry.

Today, the firm told investors that it is on the road to growth and is now able to self-finance activities.

Shareholders are starting to take note - shares are up 14% today and with a market value of just under £2mln - there's plenty of room for growth.

"Anyone who wants to get a feel for the type of company Metal Tiger is just needs to look at what we've done already in a relatively short space of time.

"We continue to work hard to innovate, invest and create value for shareholders."

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Metal Tiger Timeline

Newswire
October 01 2018

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