Exciting New Developments at MOD s Botswana Copper Project

Transcription

1 Diggers & Dealers Conference August, 2018 Exciting New Developments at MOD s Botswana Copper Project

2 Disclaimer & forward looking statements Forward Looking Statements The document contains background Information about Tshukudu Metals Botswana (Pty) Ltd and MOD Resources Limited current at the date of this presentation. The presentation is in summary form and does not purport to be all inclusive or complete. Recipients should conduct their own investigations and perform their own analysis in order to satisfy themselves as to the accuracy and completeness of the information, statements and opinions contained in this presentation. Neither this presentation nor the information contained in it constitutes an offer, invitation, solicitation or recommendation in relation to the purchase or sale of shares in any jurisdiction. The presentation may not be distributed in any jurisdiction except in accordance with the legal requirements applicable in such jurisdiction. Recipients should inform themselves of the restrictions that apply to their own jurisdiction as a failure to do so may result in a violation of securities laws in such jurisdiction. This presentation does not constitute investment advice and has been prepared without taking into account the recipient s investment objectives, financial circumstances or particular needs and the opinions and recommendations in this presentation are not intended to represent recommendations of particular investments to particular persons. Recipients should seek professional advice when deciding if an investment is appropriate. All securities transactions involve risks, which include (among others) the risk of adverse or unanticipated market, financial or political developments. To the fullest extent of the law, MOD Resources Limited, its officers, employees, agents and advisers do not make any representation or warranty, express or implied, as to the currency, accuracy, reliability or completeness of any information, statements, opinion, estimates, forecasts or other representations contained in this presentation. No responsibility for any errors or omissions from the presentation arising out of negligence or otherwise is accepted. This presentation may include forward-looking statements that are only predictions and are subject to risks, uncertainties and assumptions which are outside the control of MOD Resources Limited. Actual values, results or events may be materially different to those expressed or implied in this presentation. Given these uncertainties, recipients are cautioned not to place reliance on forward-looking statements in the presentation as they speak only at the date of issue of this presentation. Subject to any continuing obligations under applicable law and ASX Listing Rules, MOD Resources Limited does not undertake any obligation to update or revise any information or any of the forward-looking statements in this presentation or any changes in events, conditions or circumstances on which any such forward-looking statement is based. No New Information To the extent that this presentation contains references to prior exploration results and Mineral Resource estimates, which have been cross referenced to previous market announcements made by the Company, unless explicitly stated, no new information is contained. The Company confirms that it is not aware of any new information or data that materially affects the information included in the relevant market announcements and, in the case of estimates of Mineral Resources that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed 2

3 PFS Cautionary Statements (refer announcement 31/1/18) Competent Person s Statement The information in this announcement that relates to Geological Data and the T3 Mineral Resource described in this release is reviewed and approved by Mr Bradley Ackroyd, BSc (Hons), Manager Mine Geology for MOD Resources Ltd. Mr Ackroyd is a registered member of the Australian Institute of Geoscientists and has reviewed the technical information in this report. Mr Ackroyd has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and the activity, which it is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Ackroyd consents to the inclusion in this announcement of the matters based on information in the form and context in which it appears. The information in this news release that relates to Mineral Resource estimates announced in July 2008 (excluding prior estimates) is based on and fairly represents information and supporting documentation compiled by Dr Matthew Cobb; an employee of CSA Global Pty Ltd. Dr Cobb is a member of both The Australasian Institute of Mining and Metallurgy and Australian Institute of Geoscientists. Dr Cobb has sufficient experience relevant to the style of mineralisation under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Pre-Feasibility Study Base Case - Cautionary Statement The T3 PFS Base Case is based on a Proved and Probable Ore Reserve derived from Measured and Indicated Mineral Resources respectively. No Inferred Mineral Resource has been included in the estimation of Ore Reserves. The PFS has been prepared to an overall level of accuracy of ±25%. It is based on material assumptions outlined in Appendix 1 Material Assumptions PFS Base Case. The Company has concluded it has a reasonable basis for providing the forward-looking statements included in this announcement. Pre-FeasibilityStudy Expansion Case - Cautionary Statement The T3 PFS Expansion Case assumes open pit mining and conventional flotation processing with a plant throughput of 2.5Mtpa for the first three years. Assuming the Expansion Case proceeds, the plant will then be upgraded to 4Mtpa throughput rate during Year 4. The first three years of production are based upon the processing of Measured and Indicated Mineral Resources only. Thereafter the Expansion Case allows for processing of existing Inferred Mineral Resources in addition to the Measured and Indicated Mineral Resources. Resource infill and extensional drilling is ongoing with the objective to convert Inferred Mineral Resources to Measured and Indicated Mineral Resource categories. An updated Mineral Resource estimate is expected in Q The Expansion Case includes material that is currently in the Inferred Mineral Resource category. Inferred Mineral Resources represent approximately 34% of the Expansion Case Production Target by tonnage. There is a low level of geological confidence associated with Inferred Mineral Resources and there is no certainty that in-fill drilling of the T3 deposit will result in confirmation of additional Measured and Indicated Mineral Resources or that the Expansion Case Production Target will be realised. A substantial in-fill drilling program is in progress with the objective to upgrade Inferred Mineral Resources to Measured and Indicated Mineral Resource category. The Expansion Case is based on a production target and material assumptions outlined elsewhere in this announcement and summarised in Appendix 2 Material Assumptions PFS Expansion Case. While MOD considers all the material assumptions to be based on reasonable grounds, there is no certainty that they will prove to be correct or that the range of outcomes indicated in the Expansion Case will be achieved. The company has concluded it has a reasonable basis for providing the forward looking statements included in this announcement. Given the uncertainties involved, investors should not make any investment decisions based solely on the Expansion Case. 3

4 Agenda 1. High Grade Copper at A4 Dome announced today 2. Who is MOD? 3. Copper Belt Scale Opportunity 4. T3 Feasibility Study for First Mine 5. Regional Exploration it s all about Domes

5 Announced Today (A4 Dome): 1.5% Cu & 14g/t Ag, including 2.9% Cu & 42g/t Ag Hole ID Intersections 52m intersection of high grade stockwork chalcopyrite veins (assays received), and: Vein hosted and disseminated chalcocite and bornite on NPF contact (assays awaited) MO-A4-003D 1.5% Cu and 14g/t Ag from 232m Includes: 2.9% Cu and 42g/t Ag from 268.8m Includes: 5.3% Cu and 90g/t Ag from 279.9m Individual veins 11% Cu, 11.5% Cu, 8.4% Cu, 12.2% Cu, 15.6% Cu5

6 A4 Dome - first dome drilled outside T3 State-of-Art airborne EM is breakthrough technology for targeting copper EM defining large intact domes to target drilling below surface calcrete layer Immediate success at A4 Dome with two significant zones of copper in 2 nd hole 6

7 A4 Dome - located within ~700km 2 T3 Dome Complex T3 Dome Complex is in same structural zone that hosts several major deposits including Cupric s 2Mt Cu Zone 5 resource 7 EM conductive buried domes' interpreted to 500m depth Currently drilling A4 Dome (4 drill rigs) and A1 Dome (2 drill rigs) A1 Dome bornite vein mineralisation 7

8 Why Target Domes? T3 is a substantial ~60Mt copper resource on top of a large EM conductive dome Numerous, undrilled conductive domes interpreted from EM along ~700km 2 T3 Dome Complex Two deposit types : T3 Vein Type and NPF Contact Type within ~300m wide Target Sequence Domes occur below the surface calcrete layer. Any copper deposited within domes is still there 8

9 T3 Dome Complex many similar domes Interpreted Airborne EM section across T3 Dome with T3 Pit Interpreted Airborne EM section across A4 Dome, 8km West of T3 Interpreted Airborne EM section across A1 Dome, 20km NE of T3 Interpreted Airborne EM section across A27 Dome, 3km South of A1 9

10 Who is MOD? MOD is the largest licence holder and copper explorer in Botswana (11,500km 2 ) Dominates central Kalahari Copper Belt, with a major drilling campaign underway (9 rigs) Discovered the substantial T3 deposit in the first drill hole in March 2016 Discovered the A4 Dome mineralisation in first hole. 1.5% Cu in second hole Funding exploration through a 70/30 JV with AIM listed Metal Tiger Plc (MTR) Announced agreement to acquire 100% of T3 with options to acquire any new discoveries Global shareholder register and seeking to dual list on the London Main Market Well funded for exploration and completion of T3 Feasibility Study in March 2019 Established strong government and community relations, and local employment

11 Corporate Overview Well funded for exploration and completion of T3 Feasibility Study Key Corporate Data Top Shareholders % Current Broker Coverage Issued Capital 230M Shares Cash A$17.3M Market Cap A$105M At $0.47 Options ~8M* *Includes Performing Rights Board and Management ~14% Australian Super ~9% LIM Asia ~6.7% Metal Tiger ~6% 3 year share price Top 20 ~60% 11

12 Experienced Team Experienced Team Julian Hanna Managing Director Mark Clements Executive Chairman Steve McGhee Technical Director Simon Lee AO Non Executive Director Bronwyn Barnes Non Executive Director Jacques Janse van Rensburg Business Development Stef Weber CFO Gaba Chinyepi In-Country Manager 12

13 Dominant Holding in Kalahari Copper Belt ~11,500km 2 landholding in Kalahari Copper Belt Sediment hosted copper deposits similar to Zambia / DRC Copper Belt Minimal prior exploration. State-of-the-art EM is discovering copper below calcrete cover Immediate success drilling at T3 (March 2016) and A4-Dome (August 2018) Global copper grade niche 1% to 2% Cu with significant silver credits High quality and grade concentrates (30-40% Cu) Well established in-country operator, Tshukudu Low country risk supportive, stable government

14 Kalahari Copper Belt ~7Mt Cu in Resources in eastern end of belt. Domes largely eroded MOD licences previously undrilled due to extensive calcrete cover >140km of soil and EM anomalies, many with similarities to T3 Major drilling campaign at T3 Dome Complex (~700km 2 ) Large thrust related domes are main target of drilling T20 Dome (~2,000km 2 ) west of Ghanzi next regional scale target 14

15 T3 expected to become MOD s first mine Flagship T3 Project

16 T3 Rapid Growth Since Discovery T3 Copper Project (Motheo) discovered March Mt maiden resource in T3 September Mt total resource upgrade in August 2017 PFS for robust, long-life mine announced January Mt total resource upgrade in July 2018, includes: and 16g/t Ag (Indicated Resource) Decision to Mine targeted by end March 2019 Target First Production by end

17 T3 Pit PFS Robust Project 9 year Base Case, 2.5Mtpa production, A$370m NPV (pre-tax) 12 year Expansion Case, 4.0Mtpa production, A$529m NPV (pre-tax) Key Outcomes (Base Case): C1 Cash Cost AISC IRR (pre tax) 39% Payback US$1.22/Ib Cu US$1.36/Ib Cu 2.7 years T3 Project Summary Life of Mine Financials (US$3.00/lb, AUD:USD $0.76) Base Case 2.5Mtpa Base Case Expansion Case 4Mtpa Development capital US$154.8m US$191.6m Life of Mine from production start 8.8 years 11.7 years Waste: ore ratio Copper grade 1.02% 0.86% Average annual production 23kt Cu,690koz Ag 28kt Cu, 903koz Ag Expansion Case Revenue US$1,410m US$2,263m C1 Cash Costs LOM US$1.22/lb Cu US$1.30/lb AISC, LOM US$1.36/lb Cu US$1.46/lb EBITDA US$734m US$1,103m Net Cash Flow (pre-tax) US$530m US$840m NPV (8% real, pre tax) US$281m US$402m NPV (8% real, pre tax) A$370m A$529m IRR (pre tax) 39% 38% Payback (from first production) 2.7 years 3.3 years 17

18 T3 - PFS Pit Big widths, good continuity, near surface Low stripping ratio (4.8 to 1) PFS Expansion Case target ~30Ktpa Cu in concentrate 44% increase in total resource announced 2 July Kt Cu and 27Moz Ag in contained Copper 18

19 T3 - Underground Project High grade Cu veins (cutoff 1.5% Cu) extend outside Base Case pit Underground Resource drilling in progress. Target 10Mt resource 19

20 T3 - Outstanding Metallurgy Copper Silver Mass Domain Recovery Grade Recovery Grade Recovery % % % g/t % Chalcocite Bornite Chalcopyrite Locked Cycle results Excellent recoveries High grade concentrates Low mass recovery Low deleterious elements Plan export through Namibia 20

21 T3 - Site Layout and Infrastructure Near Ghanzi-Maun Highway (12km) BPC grid power expected 2020 Process water available on site Minimise water usage and recycle Innovative waste and tailings storage Agreement to purchase farm 21

22 Project Timeline 3 Resource Projects and 3 Exploration Projects: PROJECTS Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 RESOURCE FEASIBILITY STUDY & ESIA T3 PIT DRILLING RESOURCE SCOPING STUDY T3 UNDERGROUND DRILLING RESOURCE SCOPING STUDY T1 UNDERGROUND EXPLORATION T3 DOME COMPLEX T20 DOME COMPLEX T7 DOMES DEA APPROVAL AEM DRILLING DEA APPROVAL DRILLING DRILLING 22

23 It s MOD s district scale exploration potential that excites us Blue Ocean Equities District Scale Opportunity Domes, Domes, Domes!

24 Two District Scale Exploration Projects T3 Dome Complex (~700km 2 ) numerous EM targets, including at least 7 large conductive domes T20 Dome Complex (~2,000km 2 ) Previously unexplored region with domes, EM targets and Cu/Zn soil anomalies 24

25 T20 Dome Complex Next District Scale Target Zone of Cu & Zn anomalies extends up to ~60km EW and ~20km NS T23 MOD RC drilling at T4 intersected 6.1%Cu & 111g/t Ag from 61m Airborne EM survey completed over ~790km 2. Extension survey Aug 2018 Initial drilling to test T23 Dome (below) 25

26 Employment, Training and Community In-country operating company, Tshukudu Metals Training programs underway building Tshukudu team Specialist technical inputs from Australia Substantial increase in employment expected in 2019 Accommodation village (Stage 1) nearing completion Community Relations Office now operating in Ghanzi Support and sponsor local community initiatives 26

27 Clear Growth Path Consolidation of MOD share capital Consolidation of T3 Project ownership T3 Feasibility Study due March 2019 Major drilling campaign underway Breakthrough EM technology to find new deposits MOD seeking dual listing in London Target first T3 production Q4 2020

28 Investment Case The beginning of a much larger story T3 is the first of a new type of copper/silver deposits and PFS confirms robust project Exploring district scale targets- numerous compelling targets within 11,500km2 holdings Break-through technology defining large conductive domes within T3 Dome Complex Major DDH drilling campaign in progress with immediate success at A4 Dome Low sovereign risk, supportive government, excellent infrastructure, strong community presence 28

29 The right place, at the right time Copper Market

30 Declining Global Grades, Few New Mines Key factors affecting supply are declining grades, few new high-grade discoveries and high capital cost to develop low-grade porphyry deposits Global average grade % Cu*. MOD resource grades >1% Cu Decline is particularly acute in Chile (~38% of world s copper) MOD targeting first production at time of expected global supply deficit High-grade/quality concentrates should attract market premium * Royal Society of Chemistry, London. 30

31 Vanishing Copper Peers * Company Ticker MktCap (A$m) OZ Minerals OZL 3124 Australia/Brazil Producer Sandfire SFR 1316 Australia Producer Metals X MLX 447 Australia Producer Avanco AVB 432 Brazil Producer Acquired by OZ Minerals Aeon Metals AML 217 Australia Developer Finders FND 177 Indonesia Producer Acquired by Eastern Field MOD Resources MOD 109 Botswana Developer Tiger TGS 103 DRC Producer Suspended in Feb 2017 Celcius Resources CLA 93 Namibia Developer Cudeco CDU 93 Australia Producer Suspended in March 2018 KGL Resources KGL 81 Australia Developer Altona AOH 62 Australia Developer Acquired by Copper Mountain Hillgrove Resources HGO 52 Australia Developer Havilah HAV 50 Australia Developer * Source: Blue Ocean Equities (Aug 2018)

32 Contact First Floor, 1304 Hay Street WEST PERTH WA 6005 AUSTRALIA Perth office Julian Hanna