Metal Tiger plc (LON:MTR), the London Stock Exchange AIM listed investor in strategic natural resource opportunities, has given DirectorsTalk an update regarding the Company’s Joint Venture project with partner MOD Resources Limited (ASX:MOD) in the Kalahari Copper Belt in Botswana (70% MOD Resources/30% Metal Tiger).
Highlights:
-- Pre-Feasibility Study ("PFS") completed for the T3 Open-Pit Project in
Botswana. PFS prepared to overall level of accuracy of ±25%.
-- PFS considers two cases; Base Case with production from Proven and
Probable Ore Reserve; and Expansion Case with additional production
from Measured, Indicated and Inferred Mineral Resources from Year 4.
-- PFS Base Case with plant throughput of 2.5Mtpa indicates circa US$730m
EBITDA over 9 years.
-- Where Expansion Case proceeds, PFS indicates potential for circa US$1.1
billion EBITDA over 12 years.
-- PFS concludes that T3 offers a low-risk, low capital pathway to copper
production supported by improving confidence in the long-term
consensus copper price.
-- JV partners have agreed to proceed with a Feasibility Study (FS)
commencing Q1 2018.
-- PFS Base Case Model assumes open pit mining and conventional
flotation ore processing with a plant throughput of 2.5Mtpa and ore
supply from Measured and Indicated category resources only i.e. the
Proved and Probable Ore Reserve.
-- NPV(8%) US$281m (pre-tax), using long term US$3.00/lb Cu, IRR 39%
-- Net cashflow US$530m (pre-tax), inclusive of development capital
-- Annual free cash flow US$77m (pre-tax), from production start
-- Payback 2.7 years from production start
-- Operating Costs
Estimated average C1 costs of US$1.22/lb Cu including silver
credits
All in sustaining unit costs (AISC) of US$1.36/lb Cu including
silver credits
LOM cash break-even copper price of US$1.78/lb Cu on an
undiscounted basis
-- Capital Costs and Infrastructure
Pre-production capital expenditure of US$155m including US$17m
contingency
LOM sustaining capital expenditure of US$31m
Assumes grid power expected January 2022 adding US$10m EBITDA pa
-- Project Parameters
Maiden Ore Reserve containing 218kt Cu and 7.1Moz Ag
Base Case 8.8-year mine life from production start
Average production of 23kt pa Cu and 690koz pa Ag in concentrate
Waste to Ore ratio 4.76
PFS Expansion Case Model assumes open pit mining and
conventional flotation processing with a plant throughput of
2.5Mtpa for the first three years from production start. Assuming
the Expansion Case proceeds, the plant will be upgraded to enable
it to treat 4Mtpa from the start of Year 4.
NPV (8%) US$402m (pre-tax), using long term US3.00/lb Cu, IRR
37%
Net cashflow US$840m (pre-tax), inclusive of development capital
Annual free cash flow of US$85m (pre-tax), from production start
Payback of 3.3 years from production start
-- Operating Costs
Estimated average C1 costs of US$1.30/lb Cu including silver
credits
All in sustaining unit costs (AISC) of US$1.46/lb Cu including
silver credits
LOM cash break-even copper price of US$1.77/lb Cu on an
undiscounted basis
-- Capital Costs and Infrastructure
Low expansion capital of US$37m for plant upgrade from 2.5Mtpa to
4.0Mtpa
LOM sustaining capital expenditure of US$54m
-- Project Parameters
LOM Production Target containing 353kt Cu and 12.3Moz Ag
Expansion Case 11.7-year mine life from production start
Average LOM production of 28kt pa Cu and 903koz pa Ag
Waste to Ore ratio 4.28
Michael McNeilly Chief Executive Officer of Metal Tiger
commented:
“The Board of Metal Tiger are delighted with the outcome of the
Pre-Feasibility Study and commend our joint venture partners MOD
Resources, our external consultants, governmental stakeholders and
all of the Tshukudu team for their tireless work and support in
getting the project to this point.The fact that the JV has taken from discovery to a very robust
PFS in little more than twenty-two months is tantamount to the level
of work and commitment all the stakeholders have put in to the
project.We would also like to thank our shareholders for backing us and
helping us to achieve this milestone.It Is exciting to report that with the robust PFS results to hand
both Metal Tiger and MOD are unified in our commitment to progress
the project to the next level, and will be commissioning further
studies to upgrade understanding to a Feasibility Study level, with
work due to commence this quarter.”
