PERTH (miningweekly.com) – ASX-listed MOD Resources has signed a binding agreement with its joint venture (JV) partner, Metal Tiger, to acquire its 30% interest in the T3 project, in Botswana, for A$26.6-million.

MOD has also acquired the rights to purchase Metal Tiger’s 30% interest in all other JV exploration assets for a period of up to three years from the completion of the transaction.

Under the terms of the agreement, MOD will issue 17.2-million shares to Metal Tiger, resulting in the Aim-listed investment company holding a combined 12.5% interest in the MOD.

A further 40.6-million options, with a zero exercise price, will be offered allowing Metal Tiger to convert them into ordinary shares within a three-year period, providing that the conversion of these options will not result in Metal Tiger holding an interest of more than 12.5% in MOD.

The shares will have a 12-month escrow period and the options will have no voting or dividend rights until converted into shares.

“The MOD board believes this binding agreement with Metal Tiger has the potential to add significant value for MOD shareholders,” said MOD 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 Metal Tiger’s interest 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.”

Hanna said that the transaction also laid the foundation for the financing and development of the T3 project, and positioned the company as a dominant player in the Botswana copper belt.

Metal Tiger will have the right to nominate a board representative to the MOD board, providing that the company holds at least a 10% interest in MOD, with the company agreeing that the representative will support all MOD board recommendations, including a change of control transaction.

The transaction is subject to a number of conditions, including MOD shareholder approval, regulatory approvals and the completion of the transfer of the joint venture exploration assets.

The exploration assets will be transferred into a new Botswana registered JV company, Tshukudu Exploration, which will be 70% held by MOD and 30% by Metal Tiger.

The company will be managed by MOD through a customary JV agreement, with both parties funding ongoing exploration.