Name of the Project
T3 openpit copper/silver project.

Location
The project is located on the Kalahari copperbelt, in northern Botswana.

Client
MOD Resources has signed a binding agreement with its joint venture (JV) partner, Metal Tiger, to acquire its 30% interest in the T3 project for A$26.6-million.

MOD has also acquired the rights to buy Metal Tiger’s 30% interest in all other JV exploration assets for up to three years from the completion of the transaction.

Under the terms of the agreement, MOD will issue 17.2-million shares to Metal Tiger, resulting in the Aim-listed investment company holding a combined 12.5% interest in MOD.

A further 40.6-million options, with a zero exercise price, will be offered, enabling Metal Tiger to convert them into ordinary shares within a three-year period, provided that the conversion will not result in Metal Tiger’s holding an interest of more than 12.5% in MOD.

The shares will have a 12-month escrow period and the options will have no voting or dividend rights until converted into shares.

The transaction has also laid the foundation for the financing and development of the T3 project, and positioned MOD as a dominant player in the Botswana copper belt.

The transaction is subject to a number of conditions, including MOD shareholder approval, regulatory approvals and the completion of the transfer of the JV exploration assets.

The exploration assets will be transferred to a new Botswana registered JV company, Tshukudu Exploration, which will be 70% held by MOD and 30% by Metal Tiger.

The company will be managed by MOD through a customary JV agreement, with both parties funding ongoing exploration.

Project Description
The T3 prefeasibility study (PFS) has confirmed the project as a robust, long-life copper mine.

The PFS comprises openpit mining and conventional flotation processing, with  the PFS base case and PFS expanded cases as production scenarios.

Mining and process engineering studies for the PFS base case have used a revised processing rate of 2.5-million tonnes a year, a 25% increase on the scoping study production target announced in December 2017.

In the PFS base case, the ore reserves are mined from a four-stage openpit with a waste:ore ratio of 4:76. Ore will be processed through a conventional semiautogenous (SAG)/ball mill and flotation circuit, powered for the first two years by a diesel generation plant before switching to grid power.

The expansion case considers mining and processing at a rate of 2.5-million tonnes a year for the first three years in accordance with the PFS base case. The process plant will be upgraded to process four-million tonnes a year during the fourth year.

Mining will be from a five-stage openpit with a waste:ore ratio of 4:28. The optimised pit has been modelled in accordance with the PFS base case, except for the inclusion of inferred mineral resources and the reduction in processing costs, owing to grid power.

Potential Job Creation
Once operational, the T3 project is expected to create between 500 and 700 jobs in Botswana, with Australian staff providing technical expertise at the mine.

Net Present Value/Internal Rate of Return
The PFS base case has a pretax net present value, at an 8% discount rate, of $281-million and an internal rate of return of 39%, with a payback of 2.7 years from the start of production. The PFS expansion case has a pretax net present value, at an 8% discount rate, of $402-million and an internal rate of return of 37%, with a payback of 3.3 years from the start of production.

Value
The total initial development capital cost of the PFS base case is estimated at $154.86-million, which includes project contingency of $17.1-million. The total initial development capital cost of the PFS expansion case is estimated at $191.6-million, which includes project contingency of $17.1-million.

Duration
Not stated.

Latest Developments
The T3 mine feasibility study is “progressing well within budget”, and is due for completion in March 2019, Metal Tiger has said.

Additionally, metallurgical test work results further identified capital and operational cost savings, compared with those contained in the prefeasibility study.

The Botswana Power Corporation has also started building regional electricity grid infrastructure, including a power line that is due to pass within 12 km of the planned T3 mine site.

Further, the first stage of a 40-person accommodation village, located on the A3 Highway near Ghanzi, has been completed and is subject to final sign-off.

A project brief has been submitted to the Botswana Department of Environment Affairs (DEA) to increase the size of the accommodation village from the current size up to 400 personnel and allow for an additional 300 personnel during construction.

Meanwhile, the scope and terms of reference for the T3 environmental- and social-impact (Esia) assessment have been approved by the Botswana DEA, with the report due in the fourth quarter of this year.

The completion of the feasibility study and approval of the Esia are required ahead of applying for the T3 mining licence, which is expected in the first half of 2019.

Key Contracts and Suppliers
Segman (feasibility study process and infrastructure engineers).

On Budget and on Time?
Not stated.

Contact Details for Project Information
MOD Resources, tel +61 8 9322 8233 or email administrator@modresources.com.au.
Metal Tiger, tel +44 207 099 0738 or email info@metaltigerplc.com.