Base Metals: Ouch – Sandfire’s failed takeover target MOD produces the goods at T3
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We bet MOD Resources (ASX:MOD) is happy it didn’t accept that cheeky takeover offer from mid-tier miner Sandfire last month.
MOD has released a feasibility study on its flagship 60 million tonne T3 copper project in Botswana, and the numbers look pretty good.
The 11.5-year open pit mine would produce an average of 28,000 tonnes copper and 1.1 million ounces silver each year — worth an estimated $US2.3 billion over its life.
Pre-tax free cashflows are estimated at $US777 million.
Granted, this is based on a “long term” copper price of about $US3.08/lb. Currently copper is selling for about $US2.85/lb.
Plus, MOD would have buffer with low projected operating costs of US$1.56/lb Cu (after silver credits).
MOD says it has “received written, formal expressions of interest from many global, top-tier debt institutions” to cover development costs of $US182 million.
“There are a number of outstanding operational and financial outcomes of the Feasibility Study, however several stand out when compared to other emerging global copper developers and producers,” MOD managing director Julian Hanna says.
“Firstly, the T3 Project represents a relatively straightforward open pit mine and processing plant, requiring moderate capital expenditure to bring into production.
“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.”
The high-grade zone at Peel Mining’s (ASX:PEX) base metals project in NSW is now 180m long and about 230m thick. Highlights from recent drilling at Peel Mining’s Wagga/Southern Nights include including 16.35m @ 28.09% Zn, 15.77% Pb, 0.26% Cu, 270g/t Ag and 1.80g/t Au from 224.75m.
This mineralisation, which starts from about 120m below surface, remains open at depth, the company says.
Peel says a Maiden JORC Resource for Wagga Tank/Southern Nights on track for in June.
Thor Mining (ASX:THR) is bored and wants to go exploring. Its flagship Molyhil tungsten and molybdenum project is in the “we need $$$ to build this thing” phase, and its interst in the Kapuna copper project is being shuffled into another company.
So the company is buying two early stage, private Australian gold and uranium explorers, Pilbara Goldfields and Hamersley Metals, to fill the gap.
Superior Lake (ASX:SUP) has discovered three bonus “major mineralised anomalies” at its namesake zinc project in Ontario, Canada. These anomalies are close to the historic underground mine, which Superior Lake want to redevelop.
Work on a Definitive Feasibility Study remains on track for completion by mid-year.
“The identification of three major geophysical mineralised anomalies in this area vindicates the potential for additional economic deposits within this small area that could extend the Project’s current mine life,” Superior Lake boss David Woodall says.
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