MOD Resources Limited MOD Progresses Growth Strategy (1873Y)

TIDMMOD

RNS Number : 1873Y

MOD Resources Limited

07 May 2019

MOD Progresses Growth Strategy

MOD Resources Limited ("MOD" or "the Company") (ASX/LSE: MOD) is pleased to announce that the Company is progressing with its growth strategy as the T3 open pit ("T3") continues towards a decision to mine and the Company and its advisers advance a range of funding options with interested parties following the successful completion of the T3 Copper Project Feasibility Study.

The objectives of the growth strategy are to continue to build mineral resources, confirm the potential for increased production through the planned T3 process plant and demonstrate the unique copper-belt scale opportunity of MOD's Joint Venture and 100% licence holdings, through new discoveries.

Planned targets include:

   --      T23 drilling will test the potential for near surface mineralisation over a wide area 
   --      Success at T23 will provide further encouragement of the copper-belt scale opportunity 
   --      T3 Underground Project represents a medium-term production growth potential for T3 
   --      A4 Dome represents a significant opportunity for expanded production and mine life at T3 

While the Feasibility Study has confirmed the outstanding economics of the T3 open pit, MOD is now looking to define additional high-grade resources in the surrounding T3 Expansion Project area which could leverage off the proposed T3 infrastructure and potentially result in increased production through the process plant.

In addition, exploration drilling will focus on several targets in the T20 Exploration Project, including the T23 Dome and T4 West Prospect. The objective is to scope out the potential for new resources in this highly prospective area and confirm the wider potential of MOD's dominant licence holdings in the copper belt.

As announced on 26 April 2019 and in-line with forecast exploration expenditure, drilling over the next few months initially comprises three high priority resource targets (Table 1):

Table 1: Planned Upcoming Staged Drilling Activity

 
 Drill Target    Planned Drill Program               Targets               Timing 
   T23             Stage 1: 9 RC and        Follow-up drilling along      May 2019 
                          4 DD                   4km of T23 Dome 
   T3 U/G            Stage 1: 16 DD       Resource definition drilling    June 2019 
                   Stage 1: 6 RC and      Preliminary resource scoping 
   A4 Dome                1 DD                       drilling              2H 2019 
                -----------------------  ------------------------------  ---------- 
 

MOD's Managing Director, Julian Hanna, said:

"Over the past three years, the MOD/Tshukudu team has demonstrated the ability to make new discoveries in this under-explored copper belt, systematically increase mineral resources, and move our first mine towards early production. The growth strategy will aim to continue the momentum at T3 and leverage infrastructure to be developed at T3 to add further value to the project and open up the wider potential of this copper belt."

He added "The exploration drilling which forms a key part of the growth strategy will initially focus on near surface targets in the T20 Exploration Project area and targets where there have already been numerous ore grade intersections reported, in close proximity to the planned T3 open pit mine."

T23 Dome Drilling Program

Commencing in May 2019, the Company plans to follow-up on very encouraging shallow disseminated copper and silver mineralisation reported in the first three holes at the T23 Dome, in December 2018.

The T23 Dome appears to be a part of a structural zone, interpreted to link T4, T4 West and T23 prospects extending over >15km (Figures 1 and 3). A preliminary interpretation of EM data along this structural zone indicates a number of potential domes and anticlinal folds occurring at a shallow depth (Figure 3).

Figure 3 shows three interpreted EM cross sections along a 15km strike length of the structural zone. The sections show existing drilling intersections at T4 including 2m @ 6.1% Cu and 111g/t Ag (announced 1 April 2016), and hole MO-T23-003D which intersected significant disseminated and vein hosted copper and silver at a shallow depth (announced 10 December 2018) at the T23 Dome, 15km west of the T4 intersection.

While the EM data suggests the same structures may continue between T23 Dome and T4, drilling is required to test this potential given there has been no previous drilling within this area. The first stage of nine widely spaced RC and four diamond drill holes is planned to follow-up the initial shallow intersections at T23 and test a 4km strike length of this structure.

If the T23 drilling program is successful, drilling is planned to extend to the T4 West target, approximately 7km east of T23. T4 West also shows similar structural features to the T4 prospect, where MOD has previously announced significant copper intersections.

T3 Underground Project (100% MOD)

Following completion of the T3 resource infill drilling program expected in late May 2019, MOD expects to commence resource infill drilling of high-grade, vein-hosted mineralisation which is known to extend immediately below and down dip of the planned T3 open pit.

Drilling is expected to occur in two stages, with the first stage comprising a planned 16-hole diamond drill program, designed to delineate further high-grade copper and silver mineralisation within the T3 Underground Target Area (Figures 4 and 5). The second stage of drilling will include infill holes to assist with defining a resource, expected during the second half of 2019.

The T3 Underground drilling will follow up high-grade intersections as announced 7 December 2017, including:

   --     MO-G-93D - 6.5m at 2% Cu and 49g/t Ag from 190m downhole 
   --     MO-G-93D - 2m at 2.1% Cu and 46g/t Ag from 227m downhole 
   --     MO-G-96D - 18m @ 1.9% Cu & 14g/t Ag from 120m downhole 

including 6.2m at 3% Cu and 24g/t Ag from 128.8m downhole

   --     MO-G-132D - 11.5m at 1.8% Cu and 36g/t Ag from 243m downhole 
   --     MO-G-145D - 6.2m at 1.9% Cu and 40g/t Ag from 268m downhole 
   --     MO-G-162D - 1.5m at 6.3% Cu and 106g/t Ag from 155.5m downhole 

The Company expects this drilling may confirm the presence of continuous, potentially economically viable widths and grades of mineralisation, that could provide the opportunity to contribute additional higher-grade throughput to the T3 process plant, potentially supporting increased production in the medium-term.

During 2018, MOD's mining consultants undertook conceptual underground mining studies for T3 Underground and the A4 Dome projects with encouraging preliminary results. Further studies will run concurrent with drilling.

A4 Dome

The A4 Dome is approximately 8km to the west of the proposed T3 open pit and process plant and as announced on 4 October 2018, represents potential to support the T3 expansion strategy. The A4 Dome drilling program commenced in mid-2018, with immediate success in MO-A4-003D, intersecting 52m @ 1.5% Cu and 14 g/t Ag from 232.2m downhole, including 15.5m @ 2.9% Cu and 42g/t Ag (announced 6 August 2018).

At the end of 2018, the Company had drilled 20 holes along the large A4 Dome with 18 of the 20 completed holes (Figures 6 and 7) intersecting good widths and grades of both vein hosted and NPF contact copper mineralisation.

The area targeted to date, represents only a small part of the prospective A4 Dome area (Figures 6 and 7).

The proposed A4 Dome drilling program will be staged to follow up on three different targets. Drilling planned to commence in the second half of 2019 will include:

1. Six shallow RC drill holes to follow-up the shallow vein-hosted mineralisation intersected in hole MO-A4-019D (announced 20 December 2018)

2. One deep diamond drill hole to follow up the high-grade vein hosted mineralisation in hole MO-A4-003D and MO-A4-008D (announced 20 December 2018)

   3.   All drill holes will test for the widespread NPF contact mineralisation below the A4 Dome 

The Company expects that drilling of the A4 Dome, if successful, would allow further drilling programs designed to delineate and define a resource. Again, if successful, once delineated any A4 resource is expected to provide the opportunity to contribute additional throughput to the T3 process plant, to potentially support increased production in the medium-term.

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

-S-

For and on behalf of the Board.

   Julian Hanna                         Mark Clements 
   Managing Director                   Executive Chairman and Company Secretary 
   Jeff Sansom                          Jos Simson / Emily Fenton (UK PR & IR) 
   Investor Relations                   Tavistock 
   [phone]                        [phone] 
   [e-mail]    [e-mail] 
   Subscribe at: www.modresources.com.au                                    Follow us on: 

About MOD Resources

MOD Resources Ltd (ASX/LSE: MOD) is a dual listed copper exploration and development company with a dominant land position within the Kalahari Copper Belt in Botswana. The Company is focussed on the 100% MOD owned T3 Copper Project, expected to be a high-margin, low-cost copper mine. In parallel with the development of the T3 Copper Project, MOD continues its exploration program across several priority drill targets and within untested areas of interesting and potentially significant Cu-Zn soil anomalies.

A substantial in-fill drilling program is in progress with the objective to upgrade a portion of T3 Indicated Mineral Resources to the higher confidence Measured Resource category subsequent to this FS announcement.

The Company is continuing to advance discussions with interested parties in relation to T3 funding opportunities and is targeting to commence development of the T3 Copper Project in the second half of 2019, with a vision of first copper concentrate production in the first half of 2021. In the mid-term MOD will focus on generating value for shareholders.

MOD has a social licence to operate within Botswana as well as within the host community of Ghanzi. MOD will continue to work collaboratively with regulators and members of the Ghanzi District to ensure that any social investments and developments are targeted to create a positive and lasting legacy.

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 material 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 including the T3 Underground, A4 Dome and T3 Expansion Project referred to in this announcement are conceptual in nature. There has been insufficient exploration at Exploration Targets 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. This announcement includes several drill hole intersections, which have been announced by MOD Resources Limited previously.

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.

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. 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 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.

The document contains background information about MOD 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, 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.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [e-mail] or visit www.rns.com.

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May 07, 2019 02:04 ET (06:04 GMT)