THE DRILL SERGEANT: MOD Resources (ASX: MOD) announced the results of a recently-completed Feasibility Study (FS) carried out at the company’s 100 per cent-owned T3 copper project in Botswana.

MOD Resources’ T3 project is a new sediment hosted copper and silver deposit located in the underexplored Kalahari Copper Belt of Botswana.

The project features a proposed 11.5-year open pit mine, a 3 million tonnes per annum conventional processing plant and all associated infrastructure

The T3 FS was modelled on the recently-announced 34.4 million tonnes at 1 per cent copper and 13.2 grams per tonne silver for 342,700 tonnes (approx. 756mlb) of copper and 14.6 million ounces of silver T3 Ore Reserve.

MOD has progressed T3 to completion of the Feasibility Study from the discovery drill hole, drilled in 2016.

The company claimed the FS has demonstrated the opportunity to develop a copper mine that is expected to generate revenue of US$2.3 billion at a margin of over 47 per cent across the 11.5-year mine life using a long-term consensus copper price of $3.08 per pound.

The FS determined the T3 copper project is underpinned by strong fundamentals including an LOM average copper grade of one per cent, an orebody geometry that facilitates a simple, six-stage open pit design and metallurgy that requires a relatively moderate capital investment, producing high grade copper concentrates with an average copper grade of 30.4 per cent.

Key Outcomes of the T3 Copper Project Feasibility Study

The project boasts strong economics with estimated LOM revenue of US$2.3 billion and EBITDA of US$1.1 billion, an NPV (pre-tax) of US$368 million and an IRR of 33 per cent.

It will sustain a long-term US$3.08 per pound copper price rate, producing pre-tax free cashflows of US$777 million, inclusive of development capital.

Payback is estimated at 3.7 years from production start with LOM All-In Sustaining costs (AISC) of US$1.56 per pound copper after deducting silver credits.

Expected development capital of US$182 million includes mine development, process plant and infrastructure.

The 342.7kt copper and 14.6 million ounce silver Ore Reserve supports an 11.5-year mine life targeting first production Q1 2021.

An average open pit mine grade of one per cent copper and 13.2g/t silver underpins LOM average annual production of around 28,000 tonnes (61mlb) copper and 1.1 million ounces silver, averaging over 30,000 tonnes (66mlb) copper in the first seven years of full production.

The high-grade concentrate that is expected to be produced at an average LOM concentrate grade of 30.4 per cent copper and 383g/t silver has already attracted strong interest from metal traders and smelters.

MOD has received written, formal Expressions of Interest from many global, top-tier debt institutions, several of which have commenced preliminary due diligence and completed site visits.

MOD is currently advancing discussions with several potential strategic parties for non-debt funding.

“The strong economics clearly demonstrate the value of this high-quality asset located within the excellent mining and investment jurisdiction of Botswana,” MOD Resources managing director Julian Hanna said in the company’s announcement to the Australian Securities Exchange.

“There are a number of outstanding operational and financial outcomes of the Feasibility Study, however several stand out when compared to other emerging global copper developers and producers.

“Firstly, the T3 project represents a relatively straightforward open pit mine and processing plant, requiring moderate capital expenditure to bring into production.

“Then, due to the very favourable geometry, grade and metallurgical characteristics of the orebody, the Feasibility Study has demonstrated that even at copper prices much lower than today’s spot price, the T3 copper project is expected to generate excellent returns.

“T3 also provides the possibility for future production expansion from other potential deposits in the surrounding area, where MOD has already demonstrated early drilling success.

“Drilling is expected to focus on this satellite potential during 2019 to take advantage of the capital invested into T3.”

 

Email: administrator@modresources.com.au

Website: www.modresources.com.au

 

THE DRILL SERGEANT: MOD Resources (ASX: MOD) announced a substantial upgrade to the Ore Reserve within the company’s planned, 100 per cent-owned, T3 (Motheo) open pit mine, also known as the T3 copper project in Botswana.

MOD Resources is getting close to completing a Feasibility Study at T3 copper project, which incorporates the updated Ore Reserve.

The company expects the Study completion to be announced before the end of March 2019, which it hopes will provide further detailed information on the project.

The T3 open pit Ore Reserve has increased to 34.4 million tonnes at 1 per cent copper and 13.2 grams per tonne silver.

The Ore Reserve contains 342,700 tonnes (approximately 756mlb) of copper and 14.6 million ounces of silver and represents a 61 per cent increase in total tonnage compared with the Pre-Feasibility Study for a 57 per cent increase in contained copper and 107 per cent increase in contained silver.

MOD Resources said the revised Ore Reserve demonstrates both the large scale of the T3 deposit within the planned open pit and the substantial increase in contained copper and silver, compared with the Pre-Feasibility Study.

“The T3 copper project is an outstanding project located in Botswana, arguably the best mining and investment jurisdiction in Africa,” MOD Resources managing director Julian Hanna said in the company’s announcement to the Australian Securities Exchange.

“With this greater than 60 per cent increase in the size of the ore reserve, we have continued to improve on the already strong fundamentals identified within the Pre-Feasibility Study announced in January 2018.

“Since publication of the Pre-Feasibility Study, the company has focused on developing a better understanding of the geology that underpins the proposed T3 open pit, conducted substantial additional drilling and continued to identify and define further copper mineralisation, improving what was already a robust investment case.

“The increase in the T3 open pit Ore Reserve is significant for MOD, our supportive shareholders and people in the Ghanzi District.

“The proposed six stage open pit mine and three million tonnes per annum conventional processing plant is expected to produce high-margin, high-quality copper concentrates for more than 11 years.

“This should generate strong returns for investors and provide potential to create increased employment opportunities and generate significant benefits for Botswana and local communities.”

 

Website: www.modresources.com.au