MOD.L Regulatory News (MOD)

20 December 2018

MOD Resources Limited

A4 Assays Confirm Expansion Potential for T3 Copper Project

Positive results from initial phase of drilling at A4 Dome support the Company's strategy to define additional sources of ore within the T3 Expansion Project which could increase production through the planned T3 processing plant. This is supported by an independent conceptual underground mining study at A4 Dome.

· 18 of 20 holes completed to date at >5km long A4 Dome all intersected copper

· Good widths and grades in both vein-hosted and NPF contact type mineralisation

· Potential at A4 Dome extends far outside the target area drilled to date

· Positive outcomes from preliminary conceptual underground mining study at A4 Dome

MOD Resources Limited ('MOD' or the 'Company') (ASX/LSE: MOD), the copper exploration and development company focused on the central Kalahari Copper Belt in Botswana, is pleased to report additional promising intersections from its initial drilling phase at the large A4 Dome. The >5km long A4 Dome forms part of the T3 Expansion Project held 70% by MOD and 30% by Joint Venture (JV) partner, Metal Tiger Plc (AIM: MTR), and lies only 8km from the 100% owned 60Mt T3 Copper Project (Figure 1).

Due to the large size of the A4 Dome, widely spaced drilling to date has tested less than one third of the prospective area (Figure 2). A combination of vein-hosted and NPF contact copper mineralisation was intersected in most holes with potential extending well beyond the initial 1,600m long target area.

In addition to substantial widths of disseminated and NPF contact mineralisation, forming a blanket below the A4 Dome, there are wide zones of vein-hosted mineralization at shallower depths in the dome (eg 52m @ 1.5% Cu & 14g/t Ag from 232.2m in MO-A4-003D announced 6 August 2018 and 42.9m @ 1% Cu & 19g/t Ag from 257.5m in MO-A4-008D announced 4 October 2018 and 15m @ 1.1% Cu & 16g/t Ag from 39m and 21m @ 1.1% Cu & 8g/t Ag from 59m in MO-A4-019D). Refer Figures 2 and 3 and Table 2 for significant intersections.

MOD's Managing Director, Julian Hanna, said:

"Recent drilling results from the A4 Dome, combined with the preliminary conceptual underground mining study, provide strong support to expand drilling along the dome and start developing it into a resource. If results continue to be positive, the A4 Dome has potential to provide substantial additional ore sources, which may lead to an increase in production levels through the proposed T3 process plant, only 8km from the A4 Dome."

"While the feasibility study for the T3 Copper Project is nearing completion, and represents a robust, long-life, stand-alone mining opportunity for the Company, the nearby A4 Dome keeps delivering good results. The large scale of the A4 Dome, and the potential to utilise capital and infrastructure planned at T3, has allowed us to consider modern, highly efficient underground mining techniques as a realistic option for A4 Dome."

Vein-hosted intersections extending 600m along the A4 Dome (west to east), include:

MO-A4-010D: 27m @ 1.1% Cu & 20g/t Ag from 394m downhole, including:

9m @ 2.1% Cu & 39g/t Ag from 412m downhole

MO-A4-008D: 42.9m @ 1% Cu & 19g/t Ag from 257.5m downhole, including:

3.4m @ 2.4% Cu & 41g/t Ag from 297m downhole (announced previously)

MO-A4-019D: 15m @ 1.1% Cu & 16g/t Ag from 39m downhole, and:

21m @ 1.1% Cu & 8g/t Ag from 59m downhole

MO-A4-003D: 52m @ 1.5% Cu & 14g/t Ag from 232.2m downhole, including:

15.5m @ 2.9% Cu & 42g/t Ag from 268.8m downhole (announced previously)

NPF contact intersections extending 1.4km along the A4 Dome (west to east), include:

MO-A4-020D: 31.5m @ 1% Cu & 10g/t Ag from 538m downhole, including

2.8m @ 4.9% Cu & 54g/t Ag from 566.7m downhole

MO-A4-003D: 31.2m @ 1.1% Cu & 11g/t Ag from 560m downhole, including:

5m @ 2.2% Cu & 22g/t Ag from 586.2m downhole (announced previously)

MO-A4-014D: 50.3m @ 0.9% Cu & 9g/t Ag from 451m downhole, including:

5.3m @ 1.9% Cu & 21g/t Ag from 496m downhole

MO-A4-012D: 26.6m @ 1.1% Cu & 11g/t Ag from 520m downhole, including:

6.6m @ 2.1% Cu & 25g/t Ag from 540m downhole

The initial phase of widely spaced drilling at A4 Dome was completed for a low all-in cost of ~A$2.5m.

A4 Dome Mineralisation

Two distinct types of mineralisation at A4 Dome are vein-hosted mineralisation associated with structures in the upper part of the dome and NPF contact hosted mineralisation, which appears to form a reasonably continuous blanket below the dome.

Vein-hosted mineralisation includes a recent intersection of 15m @ 1.1% Cu & 16g/t Ag from 39m and 21m @ 1.1% Cu & 8g/t Ag from 59m in MO-A4-019D. Given the very shallow depth of this mineralisation further drilling is planned to define this potential.

NPF contact mineralisation in A4 Dome occurs as a relatively shallow dipping, 3-6m wide layer of locally high-grade chalcocite mineralisation (generally between ~1.5% and ~2.4% Cu) overlain by a 15-50m wide zone of disseminated mineralisation (generally between ~0.9% and ~1.1% Cu). The NPF contact has similarities to other sediment hosted copper deposits (eg: Zambian/DRC Copper Belt) where the increasing concentration of high grade chalcocite towards the basal contact is referred to as 'bottom-loading.'

The NPF contact is the basal part of the Kalahari Copper Belt host sequence (D'Kar Formation), which overlies a distinctive red sandstone sequence (Ngwako Pan Formation).

The NPF contact is an important regional target in the Kalahari Copper Belt as it hosts substantial deposits including the 100Mt @ 2% Cu 'Zone 5' resources held by Cupric Canyon Capital, ~125km east of A4 Dome.

Conceptual Underground Study 

A preliminary, conceptual underground mining study of the A4 Dome has been undertaken by independent international underground mining consultants Entech, with inputs from one of Australia's leading underground mining service providers Barminco, a subsidiary of global mining house Ausdrill Limited.

The study evaluated a model based on developing decline access to the NPF contact, using room-and-pillar ore extraction of higher-grade contact mineralisation and long hole open stoping of the overlying, disseminated mineralisation. Room-and-pillar mining is a relatively low cost mining technique commonly used in continuous, shallow dipping orebodies.

While the underground mining study is conceptual at this stage, the Company is very encouraged by the preliminary findings and will assess the next steps to advance the A4 Dome early in 2019.

A version of the announcement containing images is available on our website at www.modresources.com.au.

-ENDS-

For and on behalf of the Board.

Julian Hanna Mark Clements

Managing Director Executive Chairman and Company Secretary

Jane Stacey Jos Simson / Emily Fenton (UK PR & IR)

AMN Corporate Tavistock

+61 412 159 433 +44 207 920 3150

jane@amncorporate.com MOD@tavistock.co.uk

Subscribe at: www.modresources.com.au

Figure 1: T3 Expansion Project area showing location of A4 Dome and its proximity

to the T3 Copper Project

Please see images in the full version of the announcement at www.modresources.com.au

Figure 2: Interpreted plan of A4 Dome showing current Target Area (1600m by 800m)

and main structures targeted by drilling

Please see images in the full version of the announcement at www.modresources.com.au

Figure 3: Detailed plan of current A4 Dome Target Area showing significant intersections

in initial drilling on 200m spaced sections

Please see images in the full version of the announcement at www.modresources.com.au

Appendix 1

Table 1: Drill hole parameters for A4 Dome drill holes discussed or included in figures in this release

Table 2: A4 Dome - Significant intersections for holes described in this announcement

(shaded intersections not previously announced)

NOTES:

MO-A4-001D and MO-A4-002D: Both holes lifted and missed target

MO-A4-016D: Lifted and terminated before target

MO-A4-017D: Incomplete - shallow hole to be deepened to test target

MO-A4-018D: Low grade intersection on edge of target area

MO-A4-019D: Hole intersected shallow veins and stopped above NPF contact

About MOD Resources

MOD Resources Ltd (ASX/LSE: MOD) is a dual listed Australian copper company with a goal of becoming a substantial copper producer. After discovering copper in the first drill hole in March 2016, MOD is now under four months away from completion of a Feasibility Study for its 100% owned 60Mt T3 Copper Project in the central Kalahari Copper Belt, Botswana. The in-country operating company for the T3 Copper Project is Tshukudu Metals Botswana (Pty) Ltd (MOD 100%).

Total cost of discovery of T3 and delineation of the maiden resource was an exceptionally low US$1.7 million, equivalent to only US$0.22 cents/lb copper contained within the resource. After a number of resource upgrades, the total resource now comprises 60Mt @ 0.98% Cu and 13.9 g/t Ag containing ~590.3 Kt copper and 26.9 Moz silver. Results of the Pre-feasibility Study, announced on 31 January 2018 suggest a robust, long life, open pit mining and processing operation at T3 with 9 year Base Case for 2.5Mtpa production, pre-tax NPV A$370m, IRR of 39% and payback within 2.7 years. Since the announcement of the PFS, there has been a 20% increase to the Base Case process plant throughput to 3Mtpa, with allowance for staged future expansion.

In parallel with the development of the T3 Copper Project, a major exploration program is underway across a combination of 100% owned and JV licenses covering more than 11,700km2 in this under-explored region, to explore for additional resources that could be processed through the planned T3 process plant and potentially add significant value to the expanded project. JV Exploration Assets are operated by Tshukudu Exploration (Pty) Ltd, which is a wholly owned subsidiary of UK incorporated joint venture company, Metal Capital Exploration Limited, owned 70% by MOD and 30% by AIM-listed Metal Tiger Plc (AIM: MTR).

MOD's state of the art exploration techniques have developed the Company's understanding of the unique 'dome' style geology in the region. Drilling at multiple high priority exploration targets, supported by airborne electromagnetics has already proved successful in discovering encouraging copper mineralisation within the 5km long A4 Dome and the ~12km long A1 Dome which lie only 8kms and 20kms from the T3 Copper Project respectively.

There are two styles of mineralisation being tested by drilling in the domes around the T3 Copper Project; shallower high-grade vein hosted mineralisation and deeper sediment contact hosted mineralisation known as the NPF contact. NPF contact mineralisation is an important target as this contact hosts most of the substantial copper deposits located east of MOD's licences, including the ~100Mt @ 2% Cu 'Zone 5' resource planned to be mined underground by Cupric Canyon Capital.

MOD has an option to acquire MTR's interests in any new JV resource which progresses to a scoping study within three years from 15 November 2018, as well as an option to acquire all the remaining JV assets at the end of the three year period.

Competent Person's Statement

The information in this announcement that relates to Geological Data and the T3 Mineral Resource described in this release is reviewed and approved by Mr Bradley Ackroyd, BSc (Hons), Manager Mine Geology for MOD Resources Ltd. Mr Ackroyd is a registered member of the Australian Institute of Geoscientists and has reviewed the technical information in this report. Mr Ackroyd has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and the activity, which it is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Ackroyd consents to the inclusion in this announcement of the matters based on information in the form and context in which it appears.

No New Information

To the extent that this announcement contains references to prior exploration results and Mineral Resource estimates, which have been cross referenced to previous market announcements made by the Company, unless explicitly stated, no new information is contained. The Company confirms that it is not aware of any new information or data that materially affects the information included in the relevant market announcements and, in the case of estimates of Mineral Resources that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed.

Exploration Targets and Results

This announcement refers to Exploration Targets as defined under Sections 18 and 19 of the 2012 JORC Code. The Exploration Targets quantity and quality referred to in this announcement are conceptual in nature. There has been insufficient exploration at Exploration Targets, which include the NPF contact, A4 Dome and the T3 Expansion Project, mentioned in this announcement to define a Mineral Resource and it is uncertain if further exploration will result in the Exploration Targets being delineated as a Mineral Resource.

Forward Looking Statements and Disclaimers

This announcement includes forward-looking statements that are only predictions and are subject to risks, uncertainties and assumptions, which are outside the control of MOD Resources Limited.

Examples of forward looking statements included in this announcement are: 'Recent drilling results from the A4 Dome, combined with the preliminary conceptual underground mining study, provide strong support to expand drilling along the dome and start developing it into a resource. If results continue to be positive, the A4 Dome has potential to provide substantial additional ore sources, which may lead to an increase in production levels through the proposed T3 process plant, only 8km from the A4 Dome.' and 'While the feasibility study for the T3 Copper Project is nearing completion, and represents a robust, long-life, stand-alone mining opportunity for the Company, the nearby A4 Dome keeps delivering good results. The large scale of the A4 Dome, and the potential to utilise capital and infrastructure planned at T3, has allowed us to consider modern, highly efficient underground mining techniques as a realistic option for A4 Dome.' and 'Two distinct types of mineralisation at A4 Dome are vein-hosted mineralisation associated with structures in the upper part of the dome and NPF contact hosted mineralisation, which appears to form a reasonably continuous blanket below the dome.' and 'Vein-hosted mineralisation includes a recent intersection of 15m @ 1.1% Cu & 16g/t Ag from 39m and 21m @ 1.1% Cu & 8g/t Ag from 59m in MO-A4-019D. Given the very shallow depth of this mineralisation further drilling is planned to define this potential.' and 'While the underground mining study is conceptual the Company is very encouraged by the preliminary findings and will assess the next steps to advance the A4 Dome early in 2019.'

Actual values, results, interpretations or events may be materially different to those expressed or implied in this announcement. Given these uncertainties, recipients are cautioned not to place reliance on forward-looking statements in the announcement as they speak only at the date of issue of this announcement. Subject to any continuing obligations under applicable law and ASX Listing Rules, MOD Resources Limited does not undertake any obligation to update or revise any information or any of the forward-looking statements in this announcement or any changes in events, conditions or circumstances on which any such forward-looking statement is based.

This announcement has been prepared by MOD Resources Limited. The document contains background information about MOD Resources Limited current at the date of this announcement. The announcement is in summary form and does not purport to be all-inclusive or complete. Recipients should conduct their own investigations and perform their own analysis in order to satisfy themselves as to the accuracy and completeness of the information, statements and opinions contained in this announcement.

The announcement is for information purposes only. Neither this announcement nor information contained in it constitutes an offer, invitation, solicitation or recommendation in relation to the purchase or sale of shares in any jurisdiction.

The announcement may not be distributed in any jurisdiction except in accordance with legal requirements applicable in such jurisdiction. Recipients should inform themselves of the restrictions that apply to their own jurisdiction as a failure to do so may result in a violation of securities laws in such jurisdiction.

This announcement does not constitute investment advice and has been prepared without taking into account the recipient's investment objectives, financial circumstances or particular needs and the opinions and recommendations in this announcement are not intended to represent recommendations of particular investments to particular persons.

Recipients should seek professional advice when deciding if an investment is appropriate. All securities transactions involve risks, which include (among others) the risk of adverse or unanticipated market, financial or political developments.

To the fullest extent of the law, MOD Resources Limited, its officers, employees, agents and advisers do not make any representation or warranty, express or implied, as to the currency, accuracy, reliability or completeness of any information, statements, opinion, estimates, forecasts or other representations contained in this announcement. No responsibility for any errors or omissions from the announcement arising out of negligence or otherwise is accepted.

JORC Code, 2012 Edition

Table 1 Reporting Exploration Results from Botswana Copper/Silver Project

Section 1 Sampling Techniques and Data

(Criteria in this section apply to all succeeding sections)

Section 2 Reporting of Exploration Results

(Criteria listed in the preceding section also apply to this section.)