Modern Mining January 2017

COPPER

MOD delivers “robust” scoping study on T3 project in Botswana ASX-listed MOD Resources (MOD) has announced results of the scoping study for a proposed open-pit mine at its 70 %-owned T3 copper-silver deposit in the Kalahari Copperbelt of Botswana. According to the company, the project economics are highly encouraging and highlight MOD’s potential to become a long-life copper producer in Botswana.

D ue to the robust financial out- comes indicated by the scoping study, MOD and joint venture partner, Metal Tiger (30 %), will proceed with a pre-feasibility study (PFS) commencing early 2017. On 26 September 2016, MOD announced a maiden resource at T3 comprising 28,36 Mt grading 1,24 % copper and 15,7 g/t silver, containing approximately 350 200 tonnes (772 Mlb) of copper and more than 14 Moz of silver. The T3 resource includes 18 Mt grad- ing 1,35 % Cu and 16,7 g/t Ag in the indicated resource category which represents 64 % of the total resource. The resource is open along strike west of current drilling. T3 mineralisation consists of disseminated and vein-hosted copper sulphides including chalcopyrite, bornite and chalcocite occurring within a shallow dipping sequence of sedi- ments up to 50 m true width. As part of the PFS, MOD intends to conduct infill drilling around areas of high-grade vein mineralisation within the resource. The purpose is to define the extent of this high grade mineralisation which may provide opportunities for improv- ing the grade of current production targets at an early stage of mining. The PFS will also consider optimisation of the mining schedule and reducing project capi- tal and operating costs with a view to further enhancing the already robust metrics of the project. T3 is located within 12 km of the Ghanzi Highway in an area of freehold cattle farms. MOD has been advised by Botswana Power Corporation that grid power is planned to be extended along the Ghanzi Highway in mid-2019. In parallel with the PFS, exploration will also increase in early 2017, initially to test a large area within the T3 Dome directly north of T3 for similar type sediment-hosted depos- its. The T3 Dome is interpreted to extend over

50 km in length and is covered by MOD and Metal Tiger joint venture prospecting licences. The scoping study includes an optimised pit design to approximately 220 m vertical depth and construction of a processing plant to treat 2 Mt/a of ore with low cost expansion option- ality if required. Pre-stripping of the first stage of the planned open pit is scheduled to com- mence 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 an estimated life of mine (LOM) average pro- duction of approximately 21,8 kt/a copper and 665 koz/a silver. Two preliminary scoping level models have been generated using two different copper price assumptions – a preliminary base case model using a consensus copper price of US$2,53/lb Cu and a preliminary upside case model using an elevated price of US$3,00/lb Cu. The base case model indicates robust financial metrics which include an estimated average annual pre-tax cash flow of approxi- mately US$44 million per annum, a pre-tax NPV 10% of approximately US$180 million and an IRR of approximately 31 %. LOM C1 costs are estimated to be US$1,29/lb Cu including sil- ver credits. The estimated project cost (±35 %)

The 2 Mt/a sulphide flota- tion plant proposed for the T3 deposit.

January 2017  MODERN MINING  67