Takeaways from 121 Conference — High Potential Exploration Underway on T3 Dome, with More at the T20 Dome to Commence in August
We caught up with Metal Tiger PLC (LON:MTR) management and its JV partner MOD Resources (MOD : AU) at the 121 Conference last week. Metal Tiger owns 30% of the Kalahari Copper JV in Botswana (MOD Resources holds the remaining 70%). The timetable for the completion of the DFS on the main T3 Copper Project remains on track for the end of this year, as does the completion of a scoping study into the development of an underground operation at the main T3 deposit. However, more interesting to us was the fact that exploration is now underway on the JV’s highly-prospective regional exploration portfolio.
Infill and extensional drilling has been ongoing at the main T3 deposit to support an update of the resource ahead of the planned completion of the open pit and underground studies at the end of the year. The first drilling outside T3 began in January 2018 at T-Rex, a large EM anomaly that lies below the main T3 deposit. This programme is set to continue until August.
In mid-May the company announced that drilling had also commenced to test other EM anomalies on the T3 Dome Complex; an initial 60-hole programme is planned to be completed by four rigs. In mid-April the company submitted the Environmental Management Plan for approval by the authorities for drilling of the T20 Dome, which covers an area of almost 700km2 to the south-west of the T3 Dome Complex. The company hopes to receive approvals in July this year, with drilling to be ongoing from then.
COMMENT: Drilling of T-Rex and the regional T3 Dome targets is underway, with more planned to commence at T20 in the near term. We view these programmes as having the potential to add significantly to the project’s value and await the results with interest.
A large number of copper occurrences have been discovered in the Kalahari Copper Belt near the geological contact between a package of shales/siltstones and the underlying sandstones. Although we anticipate the discovery of additional, possibly widespread, copper mineralisation in this environment, we believe the real prize would be the discovery of deposits that have been the beneficiary of the structural preparation that resulted in the development of wider-than-usual, high-grade mineralisation at deposits such as the JV’s T3 deposit and Cupric Canyon’s Zone 5 deposits. With a large number of well-defined targets to be tested this year, we are optimistic about the programme’s potential to deliver another discovery.
We reiterate our Buy rating and target price (TP) of 3.6p. The company’s current market cap is equivalent to approximately US$39m and our TP is based on a risked SotP value of US$49m. This comprises US$13m of cash and investments, an adjustment of US$15m for corporate overheads, US$10m for the company’s other interests and a risked value of US$41m for its 30% interest in the Kalahari Copper JV.
