THE BOURSE WHISPERER: MOD Resources (ASX: MOD) announced results of a scoping study, looking at a proposed open pit mine at the company’s 70 per cent-owned T3 copper-silver deposit in the Kalahari Copper Belt in Botswana.

MOD Resources said it was highly encouraged by the project economics to emerge from the study, which it said highlighted MOD’s potential to become a long-life copper producer in Botswana.

The robust financial outcomes indicated by the scoping study, have provided the impetus for MOD and its Joint Venture partner, Metal Tiger (30%) to proceed with a pre-feasibility study (PFS) commencing early 2017.

The study follows on from the announcement in September this year, six months after the discovery of T3, of a maiden resource at the deposit comprising 28.36 million tonnes at 1.24 per cent copper and 15.7 grams per tonne silver, containing approximately 350,200 tonnes of copper (approx. 772Mlbs copper) and more than 14 million ounces of silver.

The T3 resource includes 18 million tonnes at 1.35 per cent copper and 16.7g/t silver in the Indicated Resource category, accounting for 64 per cent of the total resource.

The resource is open along strike west of current drilling and extension drilling is planned in early 2017.

The scoping study produced two preliminary scoping level models have been generated using two different copper price assumptions.

The study was based on an optimised pit design to approximately 220 metres vertical depth and construction of a processing plant to treat two million tonnes per annum of ore with low cost expansion optionality if required.

Pre-stripping of the first stage of the planned open pit is scheduled to commence in 2019 with ore processing targeted to commence later in 2019.

Total indicative mine life is approximately 10 years with 9.25 years of ore production with estimated life of mine (LOM) average production of approximately 21,800 tonnes per annum copper and 665,000 ounces per annum silver.

The first Preliminary Base Case Model (A) was prepared using a consensus copper price of US$2.53/lb copper, a price approximately 6 per cent lower than the copper spot price (approximately US$2.69/lb Cu).

MOD said the base case model A indicated robust financial metrics which include an estimated average annual pre-tax cash flow of approximately US$44 million per annum, a pre-tax NPV10% of approximately US$180 million and an IRR of approximately 31 per cent.

LOM C1 costs are estimated to be US$1.2 per pound copper including silver credits.

The estimated project cost (±35%) is US$135 million (MOD share US$94.5M), including US$18 million capital for pre-strip costs and US$18.3 million contingency. The expected payback period is 2.6 years.

The second preliminary upside case model (B) was prepared using an elevated price of US$3 per pound copper.

MOD explained this elevated price is in line with recent UBS Global Research price projections for 2019 and is approximately 20 per cent above the base case copper price assumption.

This is considered by the MOD Board to be a reasonable forward estimate to use as a basis for the upside case model.

The upside case model indicated outstanding financial metrics which include an estimated average annual pre-tax cash flow of approximately US$65 million per annum, a pre-tax NPV10% of approximately US$297 million and an IRR of approximately 42 per cent.

C1 costs are estimated to be US$1.31 per pound copper including silver credits.

The expected payback period is approximately two years.

Each US10 cent per pound rise in the copper price is estimated to add approximately $US25 million to pre-tax NPV.

“The scoping study clearly demonstrates the project’s strong commercial potential as well as the opportunity for significant upside,” MOD Resources managing director Julian Hanna said in the company’s announcement to the Australian Securities Exchange.

“T3 is a significant new sediment hosted copper and silver deposit which has progressed from discovery to completion of a positive scoping study in just nine months.

“Total cost from discovery to completion of the scoping study was only approximately US$2.5 million, confirming the outstanding efforts and commitment of the exploration and scoping study teams as well as the quality of the deposit.

“T3 is also exciting from a geological standpoint because it opens up a wider potential for further discoveries in this extensive area of the Kalahari Copper Belt which remains untested.”

Email: administrator@modresources.com.au

Website: www.modresources.com.au

THE BOURSE WHISPERER: Potash West (ASX: PWN) joined the ranks of companies determined to confuse Santa by changing their names before Christmas.

Potash West announced it would now be known as Parkway Minerals NL, with its ticker code unchanged, remaining as (ASX: PWN).

“The name change reflects the importance of phosphate and other minerals in the value proposition of our Dandaragan Trough project area,” Parkway Minerals managing director Patrick McManus said in the company’s announcement to the Australian Securities Exchange.

“In our flagship Dinner Hill project, phosphate is the principal revenue stream.”

Email: info@parkwayminerals.com.au

Website: www.parkwayminerals.com.au

THE BOURSE WHISPERER: Western Areas (ASX: WSA) has negotiated and entered into a new Offtake Contract with BHP Billiton Nickel West.

Western Areas stressed this is a new contract and not an extension of the previous arrangement between the two companies, which will be completed on 31 January 2017.

The key terms of the Contract include:

1. Contract Period – The earlier of three years from 1 February 2017 or the completion of the aggregate quantity;

2. Quantity – up to 10,000 tonnes of nickel contained in concentrate per annum with a 30,000 tonne aggregate limit; and

3. Delivery – Bulk logistics to Kambalda Other commercial terms of the Contract are in line with industry custom.

“Western Areas has a strong fundamental belief in the long term sustainability of nickel production in Western Australia and the execution of this three year contract demonstrates our vision of a positive future,” Western Areas managing director Dan Lougher said in the company’s announcement to the Australian Securities Exchange.

“Nickel West is a quality partner and the relationship developed over the prior seven years is stronger than ever.

“Both parties will benefit from this new contract, due to the high reliability, quality and consistency of supply from our Forrestania operations.”

Western Areas indicated the new contract with Nickel West will require no changes to the existing bulk logistics infrastructure already in place.

From 1 February 2017, Western Area’s offtake expiry profile will be as follows:

1. Tsingshan Group – 10,000 tonnes per annum of contained nickel expiring around 31 January 2020;

2. BHP Billiton Nickel West Pty Ltd – up to 10,000 tonnes per annum of contained nickel expiring around 31 January 2020; and

3. BHP Billiton Nickel West Pty Ltd – 2,000 tonnes per annum of contained nickel expiring around 30 June 2019 (commonly referred to as the Lounge Lizard Agreement).

Website: www.westernareas.com.au

THE BOURSE WHISPERER: Kin Mining (ASX: KIN) signed an exclusivity agreement in respect to acquiring the Lawlers processing plant from Gold Fields.

Kin mining said the plant, which has been on care and maintenance for 18 months, has a capacity of approximately 800,000 tonnes a year, making it potentially ideal for use at the company’s Leonora gold project in Western Australia.

If the acquisition proceeds, Kin plans to relocate the plant to the Leonora project.

Kin Mining is planning on annual production of 45,000 ounces to 50,000 ounces based on the Leonora project’s existing JORC Resource of 722,000 ounces.

The company also pointed out that all the material assumptions underpinning annual production targets determined by a recently completed Scoping Study have not materially changed.

A drilling program started at Leonora earlier this month with the aim of upgrading the Inferred portion of the Resource to the Indicated category as the company finalises an updated pre-feasibility study on the Leonora gold project.

“The exclusivity agreement allows Kin time to conduct due diligence and a technical review of the plant,” Kin mining said in its ASX announcement.

“Discussions concerning a sale price will take place upon successful completion of the due diligence.”

Under the terms of the Exclusivity Agreement Kin has agreed to pay Gold Fields $100,000 as a non-refundable fee for the exclusivity rights (Exclusivity Fee).

The Exclusivity Fee will form part of the purchase price and in consideration for the Exclusivity Fee, Gold Fields has agreed that for 120 days, unless extended by written notice by both parties, it will deal exclusively with Kin in relation to the mill and the proposed acquisition and immediately cease any discussion (whether current or past) with any other person in relation to dealing with the mill and the proposed acquisition.

Kin and its employees, agents and contractors will be allowed to complete due diligence investigations with respect to the mill and be given access to all information reasonably necessary to undertake this work.

The Exclusivity Agreement will be automatically extended without a requirement for notice if a Formal Agreement is reached in respect of the Proposed Acquisition.

Email: info@kinmining.com.au

Website: www.kinmining.com.au

THE BOURSE WHISPERER: Lithium Australia (ASX: LIT) has been granted Exploration Licence 70/4825 in the Donnelly River area of Western Australia.

Lithium Australia said the granting of the Licence complemented the recent grant of Exploration Licence 70/4824.

The Donnelly River project (EL 70/4824, EL 70/4825 and ELA70/4823) is located in the far southwest of Western Australia, immediately to the north and northwest of the regional town of Manjimup.

The Donnelly River area has a long history of small scale graphite mining dating back to 1904 with graphite mined from two locations at various times between 1904 and 1943.

According to lithium Australia, exploration in the area during the 1980s yielded grades of up to 30 per cent.

The company considers the Donnelly River project to cover favourable host lithology being gneisses of predominantly sedimentary origin.

LIT cited public domain geophysical surveys, which it said shows a number of conductive units within the project area which may represent graphitic horizons.

The company believes these may represent ‘walk up’ drill targets and will be subsequently conducting first pass exploration aimed at assembling a digital dataset of all work carried out in the immediate area of the tenements.

The ultimate aim would be to extend VTEM geophysical coverage to all three licence areas.

In May 2016, LIT advised divestment of its graphite assets to Graphite Australia, which is currently a wholly-owned subsidiary of the comapny.

Lithium Australia flagged its intentions to extend a priority entitlement in a proposed float of Graphite Australia.

This anticipated IPO is currently expected early next year.

“Graphite Australia NL is well advanced in preparing its significant graphite portfolio for public listing,” Lithium Australia managing director Adrian Griffin said in the company’s announcement to the Australian Securities Exchange.

“We are very cognizant of the fact that graphite is a dynamic industry and we need exceptional personnel to run the business.

“The recent appointment of Tom Revy to head Graphite Australia is a great advantage to Graphite Australia NL and will prove to be a great advantage for the shareholders of the parent company, Lithium Australia.

“Tom’s influence and experience in project development is shaping the way we look at graphite projects, as we assess opportunities to strengthen the asset base.”

Email: info@lithium-au.com

Website: www.lithium-au.com