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ASX-listed MOD Resources says the feasibility study and funding for its 60 Mt T3 copper project in Botswana is on track for completion in March 2019.

The MOD Resources T3 Project forms part of the joint venture (JV) between MOD Resources (70%) and AIM listed Metal Tiger Plc (MTR) (30%), together with an extensive licence holding in the central Kalahari Copper Belt and is the subject of a transaction announced on 18 July 2018.

The transaction will allow MOD Resources to acquire the remaining 30% of the T3 Project from MTR and acquire rights to consolidate the wider joint venture licence package.

The in-country operating company is Tshukudu Metals Botswana.

MOD’s Technical Director, Steve McGhee comments, “Our management team and consultants have made excellent progress on the Feasibility Study to deliver a practical, cost effective engineering design and implementation strategy for T3, with emphasis on capital and operating cost savings.”

“The outstanding metallurgical test-work response means that we can target a far coarser grind size and potentially deliver significant benefits of reduced power consumption and operating costs.”

“The FS report is on target to be delivered by the end of March 2019. In addition, the Environmental and Social Impact Assessment (ESIA) is already well advanced and the detailed ESIA report is expected to be submitted to the Department of Environmental Affairs (DEA) in Q4 2018,” he continues.

The ESIA, which runs in parallel with the FS, requires approval from DEA and is also subject to a public review period.

Completion of the FS and approval of the ESIA are required ahead of applying for a mining license for the T3 Project, which is anticipated in H1, 2019.

Resource upgrade

The FS is based on a revised Mineral Resource of 60.2 Mt @ 0.98% Cu and 13.9g/t Ag at a cut-off of 0.4% Cu prepared by consultants CSA Global.

This includes 36.6 Mt @ 1.14% Cu and 15.8g/t Ag in the Indicated Mineral Resource Category

Metallurgical test-work

Recent metallurgical test-work undertaken on bulk composites for the FS has confirmed, and improved upon, the outstanding results achieved during the Pre-Feasibility Study (PFS).

The potential benefits from rougher optimisation test-work are summarised below:

  • Rougher flotation recoveries exceed 97% for Cu and 95% for Ag
  • Target grind size increased to P80 = 212µm (PFS target P80 = 106µm)
  • Reduced capital and operating costs by lowering comminution power requirements
  • Rougher flotation at natural pH (without lime addition) should reduce operating costs further
  • Improved tailings dewatering characteristics

Cleaner optimisation test-work will commence soon.

Concentrate grades are expected to average 30-35% Cu over the life of mine based on test work results from the PFS and subject to further test-work during the FS.

Process engineering

A recently completed comminution study completed by Orway Mineral Consultants confirmed that a standard crush/SAG/Ball circuit is appropriate for the proposed T3 pit.

Process engineering consultants, Sedgman, have commenced preliminary design work on the crushing and grinding circuits.

The process plant design throughput is 3 Mtpa with expansion capacity to 3.5 Mtpa for modest incremental capital.

The plant layout will consider future expansion options beyond 3.5 Mtpa.

Mining Engineering Additional geotechnical drilling is in progress to provide more detailed information for the final pit design, which is required by mining consultants, SRK Consulting, to complete the T3 pit optimisation study.

Mine scheduling is expected to follow.

Mine dewatering and process water

A substantial program of pit dewatering drilling and pump testing has been completed around the planned T3 pit.

Groundwater modelling will be used to estimate yields from pit dewatering and production water bores planned to be used for ore processing and related infrastructure requirements.

Mine infrastructure

Botswana Power Corporation (BPC) has commenced installation of infrastructure for the grid power transmission line to be extended adjacent to the A3 Highway, which is only 12 km from the T3 Project.

During Q2 2018, an agreement was finalised to acquire the area of a farm where the T3 Project Area is located.

The land area is approximately 25 kmwhich is sufficient for the open pit, process plant and associated infrastructure, with ample capacity for expansion.

A long-term lease agreement has also been executed for a 100 m wide strip of farmland planned to be used for the mine access road joining the A3 highway and the T3 Project.

This will also be used to accommodate the planned grid power spur line into site.

Accommodation village

The first stage of the accommodation village located on the A3 Highway near Ghanzi is nearing completion.

A Project Brief has been submitted to DEA to increase the size of the accommodation village from the current size of 40 personnel up to 400 personnel and allow for an additional 300 personnel during construction.

Environmental and Social Impact Assessment

The Environmental Scoping and Terms of Reference report for the ESIA was approved by the DEA in August 2018.

This indicates the key baseline assessment and consultation process was followed and the proposed work program for the detailed ESIA that Tshukudu is undertaking will satisfy the expectations of the DEA, if carried out and reported to a satisfactory standard and meets regulatory requirements.

In addition to the local requirements, the ESIA work is undertaken in line with international requirements and best practice.

The scoping stage of the ESIA work program commenced in December 2017 involving preliminary public and stakeholder meetings.

The ESIA includes a wide range of specialist work, an environmental and social management plan and regular stakeholder engagement, all of which is well advanced.

The Environmental and Social Impact Statement (ESIS), which is a compilation of all work being undertaken, is being prepared by environmental consultants and registered practitioners, Loci Environmental.

It is on track for submission to DEA during Q4 2018 and the company will provide further updates as this progresses.

Funding for T3 Project

Working with its’ debt advisers, MOD has already received significant interest from several global financial institutions regarding financing the development of the T3 Project.

This coincides with the FS focussing on further improvements in project economics from the already robust PFS announced earlier this year and the outstanding metallurgical characteristics of the T3 ore.

The MOD Resources Board has a clear strategy with many alternative funding options being progressed including traditional banks, alternative debt providers, trading houses and smelters on the back of strengthening Chinese copper demand, limited new supply entering the market and falling global stockpiles.