New copper mine project needs P1bn to start
Staff Writer | Friday December 9, 2016 15:19
According to the results of the study, the project could support a two-million-tonne-a-year operation, to produce around 21,800 tonnes/year of copper and 665,000 ounces/year of silver, for nearly a 10-year mine life.
ASX-listed MOD Resources reported on Wednesday that the estimated capital investment of $135-million (P1.08 billion) would translate into an outlay of $94.5 million for MOD, which has a 70% interest in the project. The remaining 30% in the project is owned by Metal Tigers.
MOD managing director, Julian Hanna said that the scoping study demonstrated the project’s strong commercial potential and 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 around $2.5 million, confirming the outstanding efforts and commitment of the exploration and scoping study teams, as well as the quality of the deposit.”
In a statement to the Australian stock exchange, the company said based on a copper price of $2.53/lb, the project was expected to have an average yearly pre-tax cash flow of around $44 million, a pre-tax net present value of $180 million, and an internal rate of return of about 31%.
The scoping study is based on a maiden mineral resource of 28.36-million tonnes, containing some 350,000 tonnes of copper and 14.27 million ounces of silver.
MOD is planning a prefeasibility study for early 2017, and in the event that the study proved positive, a definitive feasibility study will follow and was targeted for completion by the first quarter of 2018.
MOD’s holdings comprise 25 prospecting licences with a total area of 11,507 square kilometres in the relatively unexplored central and western Kalahari Copper Belt.
MOD has been an active explorer in the Kalahari Copper belt since 2011 and discovered the ‘Corner K Deposit’, now re-named Mahumo Copper/Silver Deposit in late 2011.
MOD also owns 70% of Discovery Mines (Proprietary) Ltd (DMI) through a subsidiary company, Tshukudu Metals Botswana (Pty) Ltd, following the acquisition of DMI announced on December 16, 2015.
There are currently no operating copper mining companies in Botswana following the closure of BCL Mine recently.