Modern Mining February 2018

COPPER/SILVER

PFS on copper/silver deposit delivers “outstanding results”

The PFS Base Case with plant throughput of 2,5 Mt/a indicates a technically sound and financially robust project generating approxi- mately US$730 million EBITDA over nine years. It would produce an annual average of 23 kt of copper (cu) in concentrate and 690 kz of silver (Ag) in concentrate over a mine life of 9,6 years. Development capital is estimated at US$155 million with payback being achieved 2,7 years from the start of production. The PFS concluded that T3 offers a low- risk, low capital pathway to copper production supported by improving confidence in the long- term consensus copper price. A decision to proceed with the Expansion Case can be made after two years’ production, which is aligned with the staged pit plan, and could be funded from free cash flow. Under the Base Case, the project is expected to generate an average annual US$77 million free cash flow from first production. Commenting on the PFS, Julian Hanna, MD of MOD Resources, said it clearly demonstrated the project’s strong technical foundation and exceptional financial returns as well as the opportunity for significant upside assuming the Expansion Case proceeds. “This is our starting mine – and while it is an exciting milestone, we believe there is more to come with potential for satellite deposits around T3 and numerous other exploration tar- gets to be tested along a 140 km corridor,” he said. “None of this potential upside has been included in the scope of the PFS. “We are extremely lucky to be operating in such a favourable mining jurisdiction and look forward to transforming into a profitable long- life copper producer in Botswana.” Along with the release of the PFS results, MOD has also announced a maiden ore reserve for T3 of 218 kt of contained copper and 7,1 Moz of contained silver. In the Base Case the ore reserves are mined from a single, four-stage open pit with a waste to ore ratio of 4,76 using conventional hydraulic excavators and rear dump trucks. The optimised pit shell was modelled at US$2,91/lb Cu. It is envisaged that a contractor would be employed to undertake the mining under the technical and managerial direction of MOD.

Australian junior MOD Resources, listed on the ASX, reports that the pre-feasibility study (PFS) for a proposed open- pit mine and copper concentrator at its 70 %-owned T3 copper-silver deposit in Botswana has delivered outstand- ing results. Due to the robust financial outcomes indicated by the PFS, the boards of MOD and its joint venture partner, Metal Tiger (30 %), have agreed to proceed with a Feasibil- ity Study (FS) commencing in the current quarter.

T he T3 project is a significant new sediment-hosted copper and silver deposit in the emerging Kalahari Copperbelt of Botswana. MOD has progressed T3 from discovery to completion of a PFS in under two years and has recently announced a major regional ex- ploration campaign. As drilling at T3 continues to deliver encour- aging results, the PFS has been designed with flexibility to allow for process plant expansion capacity from 2,5 Mt/a to 4 Mt/a, ensuring that the full value of the asset can be extracted. MOD has presented two cases for the PFS, with the Base Case based on a proved and probable ore reserve and an Expansion Case with a production target utilising the Base Case ore reserve and additional production from existing inferred, measured and indi- cated mineral resources from Year 4.

Disseminated T3 copper ore (photo: MOD).

36  MODERN MINING  February 2018