Modern Mining January 2017

COPPER

is US$135 million, including US$18 million capital for pre-strip costs and US$18,3 million contingency. The expected payback period is 2,6 years. The upside case model indicates outstanding financial metrics which include an estimated average annual pre-tax cash flow of approxi- mately US$65 million per annum, a pre-tax NPV 10% of approximately US$297 million and an IRR of approximately 42 %. C1 costs are estimated to be US$1,31/lb Cu including silver credits. MOD Resources Managing Director Julian Hanna says the scoping study clearly demon- strates the project’s strong commercial potential as well as the opportunity for significant upside. “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 com- mitment of the exploration and scoping study teams as well as the quality of the deposit. “T3 is also exciting from a geological stand- point because it opens up a wider potential for further discoveries in this extensive area of the Kalahari Copperbelt which remains untested.” The unusual geometry of the T3 deposit with wide and continuous zones of shallow dipping mineralisation provides the ideal opportu- nity for potential low cost, open-pit mining. Sulphide mineralisation is continuous from shallow depth to the current limit of drilling at around 270 m depth. Pit optimisations have been performed by South African mining consultants Sound Mining using NPV Scheduler © software based on Mine Design Criteria (MDC) compiled in agreement with MOD. The optimisations used a LOM copper price of US$2,53/lb. The pit design enables a staged mine

development producing an annualised ore min- ing rate of 2 Mt/a with the first stage targeting shallow high grade ore with the objective to pay back capital within two to three years. The production target is 18,13 Mt of ore at 1,16 % Cu and 13,9 g/t Ag for a total of 201 kt Cu and 6,1 Moz Ag. Block models were generated based on a Small Mining Unit (SMU) block size of 7,5 m x 7,5 m x 2,5 m, which takes account of planned

A drill site at the T3 deposit (photo: Nick O’Reilly, QP for Metal Tiger).

January 2017  MODERN MINING  69