Could junior MOD Resources be about to fly on takeover speculation?
Link copied to
UPDATE: MOD Resources has requested a trading halt pending an announcement “regarding a capital raising” and to respond to the Sandfire Resources speculation.
Copper producer Sandfire Resources has confirmed media speculation that it approached junior MOD Resources “exploring a potential combination of the two companies”.
Cashed-up mid-tier miner Sandfire had contacted MOD (ASX:MOD) with a takeover offer which was far greater than the explorer’s current $55m market cap, according to the Financial Review.
MOD shares are temporarily paused pending an announcement of their own.
The MOD resources share price — which has been hammered over the past year — was fetching just 22c pre-open Monday.
Now with full ownership of the T3 copper-silver deposit and processing plant in Botswana, MOD believes it has laid the foundations to grow into a mid-tier copper producer.
A ‘base case’ T3 pre-feasibility study released January 2018 estimated annual free cash flow of $101m pre-tax, producing 23,000 tonnes of copper and 690,000 ounces of silver each year over an initial 8.8-year mine life.
Miners usually undertake up to four different types of studies to determine whether or not a resource can be mined economically.
These are – in order of importance — scoping, preliminary feasibility (PFS), definitive feasibility (DFS) and bankable feasibility (BFS).
A definitive feasibility on developing the $US155m T3 project is due in March.