A feasibility into MOD Resources’ (ASX: MOD) T3 copper project has revealed “outstanding” project economics including estimated life-of-mine revenue of US$2.3 billion (A$3.25 billion).
Underpinning the study, is the project’s open pit reserve which was recently upgraded to 34.4 million tonnes at 1% copper and 13.2 grams per tonne silver for 342,700t of copper and 14.6 million ounces of silver.
“The T3 copper project is an outstanding project located in Botswana – arguably the best mining and investment jurisdiction in Africa,” MOD managing director Julian Hanna said.
“On behalf of the MOD team, I am delighted to deliver the compelling results of the T3 copper project feasibility study.”
“The strong economics clearly demonstrate the value of this high-quality assets located within the excellent mining and investment jurisdiction of Botswana,” Mr Hanna added.
In the latest feasibility study, MOD is targeting an 11.5-year operation with first production in the March quarter of 2021.
Annual production of 28,000t copper and 1.1Moz of silver has been estimated, which is expected to generate US$2.3 billion in life of mine revenue.
Including capital expenditure costs of US$182 million, MOD expects pre-tax cash flows of US$777 million and a 3.7-year payback period.
The project has a pre-tax net present value of US$368 million and a 33% internal rate of return.
Potential funding, next steps
To get T3 off the ground, MOD has already received formal expressions of interest from numerous global, top-tier debt institutions.
According to the company, several potential financiers have started preliminary due diligence and completed site visits.
“The T3 project represents a relatively straightforward open pit mine and processing plant, requiring moderate capital expenditure to bring into production,” Mr Hanna explained.
“Then, due to the very favourable geometry, grade and metallurgical characteristics of the orebody, the feasibility study has demonstrated that even at copper prices much lower than today’s spot price, the T3 copper project is expected to generate excellent returns.”
Mr Hanna added the project has other potential deposits surrounding the current reserve that could expand the current proposed operation.
To advance the expansion potential, Mod plans to carry out a drilling program at the project’s satellite deposits this year.
By early afternoon trade, shares in MOD were up almost 5% to $0.325.