LONDON (Alliance News) - MOD Resources Ltd on Thursday said it has completed the T3 copper project feasibility study with "highly encouraging" results.
Shares in MOD were up 4.3% at 18.52 pence on Thursday afternoon.
The estimated life-of-mine revenue for the T3 mine, located in Botswana, is USD2.3 billion and its earnings before interest, taxation, depreciation, and amortization is thought to be USD1.1 billion.
In addition, the pretax net present value of T3 is USD368 million and its has an initial run rate of 33% with a long-term USD3.08 per pound of copper real discount rate.
The pretax free cashflows will be USD777 million including development capital and payback is expected to occur 3.7 years after the start of production.
The life of mine all-in sustaining costs for T3 are expected to total USD1.56 per pound of copper and development capital for T3, including miner development, process plant, and infrastructure, is USD182 million.
MOD Managing Director Julian Hanna said: "There are a number of outstanding operational and financial outcomes of the feasibility study, however several stand out when compared to other emerging global copper developers and producers.
"Firstly, the T3 project represents a relatively straightforward open pit mine and processing plant, requiring moderate capital expenditure to bring into production."
"Then, due to the very favourable geometry, grade and metallurgical characteristics of the orebody, the feasibility study has demonstrated that even at copper prices much lower than today's spot price, the T3 copper project is expected to generate excellent returns," he continued.
"T3 also provides the possibility for future production expansion from other potential deposits in the surrounding area, where MOD has already demonstrated early drilling success. Drilling is expected to focus on this satellite potential during 2019 to take advantage of the capital invested into T3."
The project is wholly owned by MOD Resources. However, fellow miner Metal Tiger PLC has a 10% interest in MOD and also commented on the results.
Metal Tiger Chief Executive Michael McNeilly said: "The study demonstrates the strong project economics and a clear case towards project development with a relatively straightforward open pit mine and processing plant design."
He added: "The feasibility study findings continue to support the exploration of the surrounding joint venture holdings with the mine and plant design having built in optionality for bringing in new satellite deposits."
Shares in Metal Tiger were down 3.2% at 1.28p on Thursday.