Copper Investor Hub: MOD has just intersected a substantial, new 72m copper zone directly beneath the existing T3 resource, which is part of a large joint venture with AIM-listed Metal Tiger Plc (30%). What does this new discovery mean for T3’s planned development?

Julian Hanna: Last time we spoke to the Mining Journal, MOD had just established the T3 maiden resource.  Literally in the last few days, we drilled a hole underneath T3 and intersected a wider zone, 72.6m of mineralisation grading 1.5% copper and almost an ounce of silver. That’s generated a huge amount of interest because this is right under the planned T3 openpit that we plan to develop in 18 months’ time, so a big rethink is afoot.

In addition to drilling out the new deeper zone, we’re trying to stick to the current development timetable that aims to see us in production around mid-2019. MOD has a fine team working on the PFS now so we’ll just have to work them harder! There are early indications this particular intercept may have a true width as much as 50m right under the centre of the planned pit. Subject to further drilling, this could potentially have a significant impact on how we go about developing T3.

In light of this new zone, we may have to consider possibly upscaling the proposed processing plant and production rate, which are conversations that are starting already.

Copper Investor Hub: T3’s maiden resource was established within six months of discovery, containing 350,000t of copper and 14Moz of silver and the already robust scoping study estimates a 10-year minelife for an openpit operation with a cash cost of US$1.29/lb. How is the pre-feasibility study progressing and are there any areas of particular focus?

Julian Hanna: The scoping study in December indicated a very robust project based on the resource we had at that time.  The discovery and drill-out cost was a modest A$0.0022 a pound of copper, which I think may be one of the best in class.

The scoping study was based on a 2Mtpa production rate and early stage feasibility studies are progressing on a number of fronts.  However the scope of the current PFS may change depending on the ongoing deeper drilling program.

MOD has commenced the permitting process with flora and fauna studies underway and borefield testing for a potential source of processing water on site planned to start soon.  If this is successful and water is sourced at T3, this should be a huge benefit to the project.

Existing infrastructure in the region is very good, with a sealed two lane highway only 12km from site and the substantial town of Ghanzi approximately 80km away from T3. Botswana Power Corporation has advised that they plan to have grid power down the highway by 2020 running past T3, but in case that doesn’t meet the deadline we’ve allowed for a diesel generator power station on site.

Copper Investor Hub: The copper price has risen about 25% in the past six months – where do you see demand for copper headed as T3 goes further down the path towards development?

Julian Hanna: The storm clouds are gathering over copper supply in my book – declining global grades, declining quality, increasing energy costs, and political issues seem likely to impact near term supply.

What we have in Botswana is different, it’s not a low grade porphyry hosted deposit with high capital required, it’s not a flashy VMS-type deposit with a limited mine-life; instead T3 is a sediment-hosted sulphide deposit which occurs at shallow depth within a large virtually unexplored area.  T3 has lifted the lid on the potential of MOD’s extensive holdings. There’s also a strong mining culture in Botswana, we have a committed, experienced and wonderful team on site and we couldn’t ask for a better jurisdiction to be operating in.

Copper Investor Hub: Some 20km to the north of T3 lies the T1 (Mahumo) project, which contains a stage one resource of 2.7Mt grading 2% copper and 50g/t silver. How is the evaluation of the potential underground mine at T1 advancing and has it slipped in terms of priorities?

Julian Hanna: No, we have a study underway re-evaluating the underground potential at T1, and we’re planning on expanding the drilling to increase the current resource.  Although T1 doesn’t have the width of T3, it has high copper grades with good silver credits. The target is to get the resource to 10Mt which we consider may be sufficient for a potential underground mine that could be a satellite to supply the planned T3 plant.

Copper Investor Hub: Of the many exploration targets in the surrounding joint venture area, which do you believe warrant the most attention?

Julian Hanna: MOD employs many geologists and we all have our favourites!  Apart from T3, I like T5, it’s a deep but very large target, T7 where we are currently drilling and T20 just west of our operations base in Ghanzi. They all have the right magnetic characteristics and we’re about to put them to the test.

The guys on site are rapidly gaining an understanding of the geology of T3 and starting to look elsewhere along the main structural corridor for the next T3.

The T3 project area alone is 1000sqkm of very prospective ground, the first stage of a high-tech 3D IP survey has been completed and this has generated some very interesting drilling targets.  We look forward to getting that exploration underway soon.

Copper Investor Hub: Contango Funds Management has just upped its stake in the company to more than 7% and MOD’s shares hit a six-month high in early March – what is helping garner interest?

Julian Hanna: Institutional investment interest in MOD has grown rapidly both in Australia and offshore which is encouraging. MOD’s market cap is now north of A$100 million (US$75 million) which we hope will attract more interest in the company.

It’s difficult to speculate on recent comparisons to other ASX-listed copper producers but I think the assets we have in the Kalahari Copper Belt are quite significant, and not just at T3.

Copper Investor Hub: Finally, MOD has flagged selling its some or all of its 80% interest in the 1 million ounce Sams Creek gold deposit in New Zealand although you’ve just extended your licence there, does this project fit in the company’s future?

Julian Hanna: We’ve made it clear MOD is looking to divest its interest in Sams Creek. There are a number of interested parties looking at it now and although it’s a very interesting project, there are clearly no synergies between Sams Creek and what we’re doing in Botswana.  So it’s a distraction from the main game and what we see as a huge opportunity for MOD in Botswana.