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ADu ReVIeW

End of the Mod trend?

n what could be the company’s last ever rica Down Under gave further compelling
Iappearance at Africa Down Under, Mod evidence as to why a combined group could
Resources Ltd managing director Julian have further success in Botswana.
Hanna gave delegates a reminder just why Mod had fielded sizeable interest from Julian Hanna
Sandfire Resources NL was prepared to pay several financing options for T3’s $181 mil- T20 exploration package. Hanna said the
$168 million for the copper developer. lion development but Hanna admitted noth- T20 project contained a 750sq km area with
Mod has been a constant at the forum ing could compare to the opportunities the numerous copper-zinc soil anomalies with
over the last three years, showcasing the Sandfire deal offered in terms of financial the first drilling at T4 and T23 intersecting
rapid progress it has made at its T3 copper backing and technical know-how. wide zones of disseminated and localised
project in Botswana since the maiden hole “Sandfire is a very profitable miner, has vein-hosted copper including a best hit of 2m
was drilled in March 2016. very strong cash flow and a solid balance @ 6.1% copper and 111 g/t silver from T4.
In the intervening period, Mod has built T3 sheet,” Hanna said. “It [the takeover] allows “T3 is just the start and there is regional
into a rare commodity in the copper space, T3 to be developed with a strong team be- scale exploration potential here,” Hanna
a genuine greenfields development pro- hind it.” said.
ject. The company has defined a 60.2mt Adding further ballast to Sandfire’s argu- Mod has defined three broad styles of
@ 0.98% copper and 13.9 g/t silver (with ment is its exploration capabilities. While mineralisation on the Kalahari Copper Belt;
36.6mt @ 1.14% copper and 15.8 g/t silver Mod’s junior credentials would have meant high-grade veining, disseminated high-tenor
indicated) resource at T3 and in March is- parking exploration during T3’s construction chalco and the NPF contact which Hanna
sued a DFS pointing to a project with a NPV and ramp-up, Sandfire’s multi-disciplinary said shared similarities to the DRC copper
of $US368 million, IRR of 33% and life-of- experience means it can continue to explore deposits.
mine EBITDA of $US1.1 billion. while the mine is built. Hanna said discoveries of such styles of
The quality of both deposit and work was This should be seen as a blessing to Mod mineralisation were rare in a copper sector
such that Sandfire made its move in June, shareholders given their company boasts a which had seen the majority of exploration
offering 0.0664 shares or 45c for every Mod tenement package of more than 12,000sq expenditure focused on low-grade, large
share, a 45% premium on Mod’s 20-day km and has several enticing targets in Bot- tonnage porphyry deposits.
VWAP. It represented a 108% premium on swana. “These deposits have much lower capital
Mod’s share price on the day of the offer. “We have so many exploration targets,” intensity and energy exposure than the por-
Mod shareholders were set to vote on Hanna said. phyry deposits we are competing with,” he
the scheme of arrangement proposal on Among the regional targets are the T4 and said.
October 1 but Hanna’s presentation at Af- T23 prospects within the plus-3,000sq km
– Dominic Piper
Powering up in Botswana

Discovery became the first copper miner in the north-west grid, so now anybody who
in the district when it completed construc- wants to open a mine in that area has got
tion of the 36,000 tpa copper and 1 mozpa enough power,” Tshetlhane said.
silver Boseto operation in the second half In Africa, Botswana ranked first in the
of 2012. Fraser Institute’s Policy Perception Index
That was the last time things ran smooth- and Investment Attractiveness Index in
ly, however, and after battling poor recov- 2018, while it was ranked sixth in Africa in
Moses Tshetlhane
eries and struggling to contain cash costs, the Best Practices Mineral Potential Index
ome good has come of Discovery Met- Discovery was voluntarily wound up in last year.
Sals ill-fated Boseto copper project in Bot- 2015. The comfort of doing business in Bot-
swana’s north-west. The troubled venture did not serve com- swana is perhaps reflected in the 210 com-
In 2012, then ASX-listed Discovery ap- pany or country well but Botswana Ministry panies holding a total of 656 licences in the
peared to have cracked the code in a part of Mineral Resources, Green Technology country, with the metals, diamonds and in-
of the highly prospective Kalahari Copper and Energy Security deputy director Moses dustrial minerals sectors attracting the most
Belt with the Boseto copper discovery. Tshetlhane said the north-west of Botswa- attention.
The region around Boseto had previously na was now better equipped to host mining “Our policy framework is very much com-
been shunned by mining companies due projects. petitive in terms of investor confidence and
to poor copper prices and the lack of ad- “Infrastructure-wise, we try to make sure ensuring that you know you can develop
equate infrastructure needed to run a viable that there is power for different mining pro- your mining assets once you find depos-
mining operation. jects. Energy inputs, if the costs are very its in the ground. All in all, Botswana as an
However, upon its arrival in Botswana in high sometimes that kills mining projects, investment destination is a popular choice
2005, Discovery was hell-bent on proving as we discovered with Discovery Metals. for various sectors, but specifically mining
the naysayers wrong. Though majors such They encountered very high costs because which is a mainstay of the country’s econo-
as Anglo American plc and GENCOR had they used diesel generation. But, we have my,” Tshetlhane said.
explored the belt in the 1980s and 1990s, since taken power to that part of the country – Mark Andrews

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