Metal Tiger plc (LON:MTR), the London Stock Exchange AIM listed investor in strategic natural resource opportunities, today provided the Feasibility Study results for the T3 Copper Project, held 100% by MOD Resources Limited, in the Kalahari Copper Belt, Botswana following MOD’s announcement earlier today. Metal Tiger currently holds approximately 10.48% of the issued share capital of MOD.
Key T3 Copper Project Feasibility Study Findings
Strong Project Economics
Estimated LOM revenue of US$2.3 billion and EBITDA of US$1.1 billion.
NPV (pre-tax) of US$368m with IRR of 33% using long term US$3.08/lb Cu and 8% real discount rate.
Pre-tax free cashflows of US$777m, inclusive of development capital.
Payback 3.7 years from production start.
LOM All-In Sustaining Costs (AISC) of US$1.56/lb Cu after deducting silver credits.
T3 Funding Options
Expressions of Interest from numerous global, top-tier debt institutions, many have commenced preliminary due diligence and completed site visits.
MOD is advancing discussions with a number of potential strategic parties for non-debt funding.
Competitive Capital Intensity
Development capital of US$182m includes mine development, process plant and infrastructure.
Robust Project Parameters
Ore Reserve containing 342.7kt Cu and 14.6Moz Ag in the Probable category.
11.5-year mine life targeting first production Q1 2021.
Average open pit mine grade of 1.0% Cu and 13.2g/t Ag.
LOM average annual production of 28kt (61mlb) Cu in concentrate and 1.1Moz Ag
Averaging over 30kt (66mlb) Cu in the first 7 years of full production following ramp-up (2022 to 2028).
High Grade Concentrate Production
Average Cu concentrate grade 30.4% and 383g/t Ag, strong interest from metal traders and smelters.
Michael McNeilly, Chief Executive Officer of Metal Tiger, commented:
“We are delighted to report on the findings of the MOD Feasibility Study for the T3 Open Pit mine project in Botswana.
The study demonstrates the strong project economics and a clear case towards project development with a relatively straightforward open pit mine and processing plant design.
We commend MOD and the feasibility team for delivering the study to an aggressive schedule and we look forward to supporting them as they progress the project forward towards a decision to mine.
The Feasibility Study findings continue to support the exploration of the surrounding joint venture holdings with the mine and plant design having built in optionality for bringing in new satellite deposits.”
This announcement coincides with MOD’s announcement earlier today which contains supportive images and can be viewed through the following link:
T3 Open Pit Project Background
The T3 Project is a significant new sediment hosted copper and silver deposit in the under-explored Kalahari Copper Belt in Botswana. Over the past three years T3 has progressed from the discovery drill hole, announced in March 2016, to completion of a Feasibility Study. The FS has demonstrated the opportunity to develop a copper mine that is expected to generate revenue of US$2.3 billion at an EBITDA margin of over 47% across the 11.5-year mine life using a long-term consensus copper price of $3.08/lb.
T3 is based on the T3 Resource, announced on 16 July 2018, and the T3 open pit is modelled on the T3 Ore Reserve announced 25 March 2019. The FS identified that the T3 Copper Project is underpinned by strong fundamentals including an average copper grade of 1.0%, an orebody geometry that facilitates a simple, six-staged open pit design and metallurgy that requires a relatively moderate capital investment, producing high grade copper concentrates with an average copper grade of 30.4%. This premium grade concentrate contains minimal deleterious elements, presenting an opportunity to blend and improve lower quality smelter feedstock, which has generated significant interest from numerous metal traders and smelters.
The proposed six stage open pit will utilise conventional equipment to support an average annual mining rate of 3.0Mtpa of ore for a LOM strip ratio of 5.7 to 1.
Pre-strip activities are expected to commence during the first half of 2020 and ore from the first stage of the open pit is targeted to be processed during the first quarter of 2021. The bulk of waste movement is expected between 2020 and 2024 resulting in a higher strip ratio during these early years. Following this, the strip ratio will reduce to an average of 2 to 1 and mining costs should follow this general downward trend.
The open pit is located less than 1 kilometre from the process plant. Ore will be either directly fed into the primary crusher or directed to a Run of Mine (“ROM”) stockpile, providing surge capacity and opportunity for ore blending.
The T3 orebody is comprised of metallurgically favourable chalcopyrite, bornite and chalcocite. Ore will be processed through a conventional process plant with an annual throughput of up to 3.2 million tonnes at a head grade of 1.0% copper and 13.2g/t silver. The flow sheet includes a primary crusher / SAG / Ball mill comminution circuit to achieve a grind size of P80 180μm, a natural pH flotation circuit, rougher flotation with a regrind circuit to achieve a grind size of P80 90μm and a cleaner flotation circuit.
LOM metallurgical recoveries are 92.9% copper and 88.0% silver, producing a concentrate with grades that peak at 34.7% Cu and 601 g/t Ag, averaging 30.4% Cu and 383 g/t Ag.
The Project Execution Schedule, following a three-month early work programme, defines a 19-month design, construction and commissioning timeframe targeting first concentrate production before the end of the first quarter of 2021.
Average annual production over the life of mine is expected to be approximately 28kt of copper and 1.1Moz of silver however for the first seven full years of production (between 2021 and 2028), plant throughput, feed grades and recoveries are expected to be higher than LOM average and support copper production averaging over 30kt.
All-In Sustaining Costs over the life of mine are highly dependent on mining costs and waste movement. Over the life of mine, average AISC are expected to be in the lowest quartile of the cost curve at a very competitive $1.56 per pound of copper produced, after silver credits.
The estimated direct capital cost for the process plant is US$49 million. Project indirect costs, including engineering, procurement and construction costs, are estimated at US$32 million. Site infrastructure costs, which include site preparation, a 14km all-weather unsealed access road to the A3 highway, the expansion to a 400-person accommodation camp in Ghanzi and administration buildings are estimated at US$23 million.
The current estimated direct and indirect capital cost for the establishment of the mine, the construction of the process plant and associated infrastructure is US$142 million (excluding mining pre-strip costs).