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In the news: Metal Tiger

Published: 11:54 01 Sep 2017 BST

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COMPANIES

Metal Tiger*†

LON:MTR | 2.2p | US$22m

Exploration Budget of A$10m for 30%-owned Botswana Copper/Silver Project JV

Metal Tiger has announced that the exploration budget for its 30%-owned Botswana Copper/Silver JV has been set at A$10m for the year to October 2018, the company’s share of which is A$3.0m/£1.85m.

COMMENT: This represents nearly double last year’s exploration budget for the JV and should provide a significant acceleration in the pace of exploration at the project. Work at the JV is currently focused on completing a pre-feasibility study on the T3 deposit by the end of this year, with a feasibility study currently planned to be completed by mid-2018.

The new budget will enable the company to test targets already established and to undertake geochemical and geophysical surveys over the JV licence area, at which soil and electro-magnetic anomalies cover a combined strike length of 150km.

T3 is an attractive project. The scoping study of December 2016 indicated the potential for the project to produce 22,000tpa of copper, with associated silver, at a C1 cash cost of US$1.29/lb and capex of US$135m, equivalent to a very competitive capital intensity rate of US$6,200/t. As pointed out in the latest announcement, the current copper price of US$3.08/lb represents an increase of 50% over the past year, further focusing attention on copper development opportunities.

A$10m exploration budget for Botswana Copper JV, which covers 8,000km2 area of the Kalahari Copper Belt — Expenditures include the funding of a 70-hole drill programme at the T3 deposit (announced in August) and a further 160 diamond drill holes and 40 RC holes on the 50km-long T3 Dome, with additional exploration at the 60km-long T20 Dome to the south-west. Exploration over the coming year is planned to include the following.

T3 Dome

• Funding the current T3 drilling programme, including up to 70 diamond drill holes:

o Drilling at the project re-commenced on 9 August following the approval of the Environmental Management Plan (EMP), which is valid until December 2018.

o To test for extensions at T3 to the east and west of the planned pit.

o To test the extent of Zone 3 mineralised contact 300m below the current T3 resource.

o To test for high-grade, vein-hosted copper mineralisation that could potentially support underground mining beneath the planned open pit.

o To undertake hydrological and sterilisation holes required for project studies.

o To test geophysical anomalies to the north and north-east of the T3 resource.

o Currently seeking approvals for the drilling of 14 electro-magnetic (EM) and copper soil anomalies along the dome.

o The majority of this programme is planned to be completed by the end of the year.

T20 Dome

• Airborne EM geophysical survey over a large area of the T20 Dome.

Metal Tiger owns a 30% interest in the Botswana Copper/Silver Project JV — Metal Tiger holds 30% and MOD Resources (MOD: ASX) 70% in the JV that owns exploration rights over an area of over 8,000km2, covering 150km of the western end of the Kalahari Cooper Belt in western Botswana. Metal Tiger also owns 95.5m MOD shares (5.0%) and 1.5m MOD warrants at a price of A$0.060/share (the current share price is A$0.068). Metal Tiger also has a portfolio of other minerals interests, including exploration and development assets in Thailand and exploration licences in Spain, as well as a portfolio of mining equity investments.

Robust scoping study into 22,000tpa copper operation at T3 completed in December 2016 — The pace of progress at the T3 Project has been impressive: after discovery in March 2016, a maiden resource statement was published in September 2016 and a scoping study completed in December 2016. The positive scoping study was based on the maiden resource of 350,000t copper and 14Moz of silver. It considered the development of an open-pit copper mine producing 22,000tpa of copper and 665,000oz of silver in concentrate over a mine life of over nine years. Average life-of-mine C1 cash costs were estimated to be US$1.29/lb after silver credits. Capital costs were estimated at US$135m, equivalent to US$6,200/tpa of annual capacity. At a copper price of US$3.00/lb (compared with the current price of US$3.07/lb), the pre-tax NPV10 was US$297m and the IRR 42%.

Resources increased by 17% to 409,000t of copper in August 2017 — A resource update was announced in late August 2017. Updated total resources comprised 36Mt, grading 1.1% Cu and 13 g/t Ag, increasing copper content by 17% to 409,000t and silver to 14.8Moz. Some 28% of the copper was contained within Measured resources, and a further 33% in Indicated resources.

Pre-feasibility study planned to be completed by the end of the year — The company plans to complete a pre-feasibility study by the end of the year and a feasibility study in 3Q18.

The company is well funded — Cash at the end of 2016 was £1.4m and the company raised a further £4.85m in April 2017 at 3p/share.

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