1 December 2020
Metal Tiger Plc
("Metal Tiger" or the "Company")
Sandfire Resources Update - Material Progress Achieved in Botswana (ASX:SFR)
Metal Tiger plc (AIM:MTR), the London Stock Exchange AIM listed investor in natural resource opportunities, is pleased to note that Sandfire Resources Limited (“Sandfire”) has today released several important updates including the announcement of the Sandfire Board’s approval of the commercial development of the T3 Motheo Copper-Silver Project (the “T3 Motheo Project”), a maiden mineral resource for the A4 Copper-Silver deposit, high-grade copper-silver intersections in the latest drilling at A4, an investor update and outlook presentation as well as the award of the EP contract for the T3 Motheo Project.
Highlights from Sandfire’s announcement regarding the commercial development of the T3 Motheo Project:
- Positive Final Investment Decision by Sandfire to progress the US$259 million development of the T3 Motheo Project following completion of positive Definitive Feasibility Study on a base case 3.2Mtpa operation with clear visibility to expand rapidly to 5.2Mtpa.
- At 3.2Mtpa: estimated life-of-mine revenue of US$2.45 billion (A$3.5 billion) and EBITDA of US$987 million (A$1,410 million) using a forecast long-term copper price of US$3.16/lb (current spot copper is circa 3.49/lb).
- Post-tax NPV7% of US$206 million (A$294 million) and IRR of 21% including post-tax free cash-flow of US$440 million (A$628 million), inclusive of development capital.
- Payback of 3.8 years from production start.
- All-in sustaining costs of US$1.76/lb for the first 10 years of operations.
- Probable Ore Reserve of 39.9Mt at 0.9% Cu and 12.2g/t Ag for 360,000t of contained copper metal and 15.6Moz of contained silver.
- Initial 12.5-year mine life, targeting first production in Q3 FY2023 (Q1 CY2023)
Note: Metal Tiger holds a US$2m capped 2% net smelter royalty over the T3 Motheo Project.
Significant upside potential including clear pathway to 5.2Mtpa:
- Maiden Inferred Mineral Resource of 6.5Mt at 1.5% Cu and 24/gt Ag (100,000t of contained copper) completed for the A4 deposit, 8km west of T3, demonstrating the significant exploration upside and growth potential of the Motheo Production Hub within the Kalahari Copper Belt.
- Sandfire envisages that A4 has the potential to underpin its near-term expansion opportunity to 5.2Mtpa, with further upside from other near-mine exploration targets.
- An additional US$20 million (A$28 million) for capital works has also been approved to support rapid future expansion of the T3 Motheo Project plant to 5.2Mtpa.
- In-fill drilling currently underway to upgrade the A4 Mineral Resource to Indicated status and underpin Pre-Feasibility and engineering studies.
- Multiple exploration targets identified within Sandfire’s 100%-owned licence holdings in the Kalahari Copper Belt, covering a combined total area of 26,645km2 in Botswana and Namibia.
Note: Metal Tiger holds a 2% uncapped net smelter royalty over circa 8,000km2 of Sandfire’s licence holdings in the Kalahari Copper Belt including PL190/2008 (excluding the T3 Motheo Project area), which hosts the A4 resource area.
Highlights from Sandfire’s announcement regarding outstanding high-grade Copper-Silver intersections in latest drilling at A4:
- Subsequent to the completion of the maiden A4 Inferred (the new intersections are not included in the A4 Mineral Resource, a closely spaced in-fill drilling is in progress to determine the geometry and potential significance of these vein-hosted intersections, the extent of which, is not currently known), very high-grade copper and silver mineralisation has been intersected in three drill holes at the eastern end of the A4 deposit.
Hole MO-A4-122D intersected two zones of strong vein-hosted bornite and chalcocite mineralisation as follows:
- Upper Zone: 33.0m @ 4.6% Cu and 74.3 g/t Ag from 109m down-hole;
Including: 22.0m @ 6.0% Cu and 98.2 g/t Ag from 120m down-hole;
Including: 9.5m @ 11.7% Cu and 188g/t Ag, from 130.5m down-hole.
- Lower Zone: 13.5m @ 10.2% Cu and 142.6g/t Ag, from 169.0m down-hole.
Including: 7.15m @ 16.0% Cu, 222g/t Ag and 2.9% Mo from 175.0m down-hole
Hole MO-A4-138D (located 50m east along strike from MO-A4-122D) also intersected strong bornite and chalcocite mineralisation. Assays received to date include the following intercepts:
- 35.70m @ 7.1% Cu and 116g/t Ag from 128.5m down-hole
- Including: 12.40m @13.3% Cu and 232.8g/t Ag from 131.6m down-hole
Hole MO-A4-122D (located 100m east along strike from MO-A4-122D) also intersected strong bornite and chalcocite mineralisation, as follows:
- 6.48m @ 5.8% Cu and 80.9g/t Ag from 135.52m down-hole
- The latest A4 results include the highest-grade copper and silver assays reported for the project to date, and provide strong encouragement for the potential to discover further high-grade mineralisation within the A4 Dome and at other targets within the T3 Expansion Area.
- Six diamond core rigs are currently conducting in-fill and extensional drilling at the A4 deposit on a 25m x 25m drilling pattern in order to elevate the maiden Inferred Mineral Resource to Indicated status and test for potential extensions to the deposit.
- Substantial increase in exploration drilling is also planned within the 1,000km2 T3 Expansion Area targeting additional ore sources for the planned Motheo Production Hub. Drilling priorities include the A1, T2E, A27 and A13 prospects and the deeper NPF Contact.
- Airborne electromagnetics (AEM) led to the discovery of A4 and has proved very effective in defining new drilling targets within the T3 Expansion Area.
- A major regional AEM survey covering circa 13,450km2 of Sandfire’s 19,967km2 Botswana licence holdings has commenced and will continue into early CY2021.
Highlights from Sandfire’s announcement regarding a Maiden Mineral Resource for the A4 Copper-Silver Deposit:
Maiden JORC 2012 compliant Inferred Mineral Resource estimate completed for the A4 Copper-Silver deposit, located 8km west of the T3 Motheo Project in Botswana:
- 6.5Mt at 1.5% Cu and 24g/t Ag, for 100,000t of contained copper and 4.9Moz of contained silver (using a 0.5% Cu cut-off).
- Maiden Mineral Resource highlights the potential for the A4 deposit to be rapidly advanced as a source of satellite ore feed as part of an expanded Motheo Production Hub. A4 is 8km away from the planned processing plant and infrastructure at the T3 Motheo Project. It has the potential to support the expansion from the base case of 3.2Mtpa to 5.2Mtpa.
- The second phase of resource drilling at A4 is well advanced with six diamond core rigs conducting in-fill and extensional drilling on a 25m x 25m drilling pattern. The objective of the second phase of drilling is to elevate the Maiden Mineral Resource to an Indicated Mineral Resource category and test for potential extensions to the deposit.
- Early work programs underway at the A4 Project include metallurgical test work, drilling for geotechnical and hydrogeological purposes, mining studies, environmental studies, regulatory approvals and infrastructure studies aimed at fast-tracking the evaluation of the A4 Project and potentially integrating it with the development plans at T3.
Michael McNeilly, Chief Executive Officer of Metal Tiger, commented:
“This is an important moment for Metal Tiger, which highlights not only the current value of our interests in the Kalahari Copper Belt, but also the potential for significant future value creation. I anticipate that A4 should provide significant upside potential to the already impressive T3 economics. With the decision to mine, the clear upside potential to the A4 resource from infill and extensional drilling as highlighted by the exciting intercepts, our strong belief is that both the market and the industry will re-focus on what we believe to be the significant potential of the Kalahari Copperbelt.
“We are encouraged that Sandfire is already in the process of effecting numerous studies and it is clear by their pre-approval of expenditure related to the expansion of the T3 plant from 3.2Mtpa to 5.2Mtpa, along with their aggressive program to delineate an indicated resource, that they are moving quickly to be able to incorporate A4 into their mine plans. This will likely have a significant impact on when we can first anticipate receiving revenue from our uncapped 2% net smelter royalty. Furthermore, the exceptional >10% Cu grades over substantial down-hole widths along with the presence in one hole of 2.9% Mo, are expected to pique the interest of geologists globally.
“In particular, we are excited by how the development of T3 will impact our royalty interest over much of the adjacent Sandfire exploration acreage, as well as our interest in Kalahari Metals, and, assuming the recently announced deal completes, our investment in Cobre Limited.
“We are delighted by today’s announcements which comes during a strong period for copper prices and we look forward to Sandfire achieving further progress in Botswana.”
Metal Tiger is currently interested in 6,296,990 Sandfire shares representing approximately 3.5% of Sandfire’s issued share capital. As announced on 31 July 2020, 2,609,887 of the Sandfire shares held by the Company are subject to an equity derivative financing arrangement with a global investment bank.
Links to the Sandfire announcements released today are set out below:
Sandfire Approves Development of New Long-Life Copper Mine in Botswana:
Maiden Mineral Resource for A4 Copper-Silver Deposit:
High-Grade Copper-Silver Intersections in Latest Drilling at A4:
Investor Update and Outlook Presentation – A New Era:
Award of EP Contract for Sandfire’s Motheo Contract:
For further information on the Company, visit: www.metaltigerplc.com:
(Chief Executive Officer)
(Chief Investment Officer)
Tel: +44 (0)20 7099 0738
Strand Hanson Limited (Nominated Adviser)
Tel +44 (0)20 7409 3494
Arden Partners plc (Broker)
Tel: +44 (0)20 7614 5900
Camarco (Financial PR)
Tel: +44 (0)20 3757 4980
Notes to Editors:
Metal Tiger PLC is admitted to the AIM market of the London Stock Exchange AIM Market ("AIM") with the trading code MTR and invests in high potential mineral projects with a base, precious and strategic metals focus.
The Company's target is to deliver a high return for shareholders by investing in significantly undervalued and/or high potential opportunities in the mineral exploration and development sector. Metal Tiger has two investment divisions: Equity Investments and Project Investments.
Equity Investments invests in undervalued natural resource companies. The majority of its investments are listed on AIM, the TSX and the ASX, which includes its interest in Sandfire Resources Limited (ASX: SFR). The Company also considers selective opportunities to invest in private natural resource companies, typically where there is an identifiable path to IPO. Through the trading of equities and warrants, Metal Tiger seeks to generate cash for investment for the Project Investments division.
Project Investments is focused on the development of its key project interests in Botswana, where Metal Tiger has a growing interest in the large and highly prospective Kalahari copper/silver belt through its interest in Kalahari Metals Limited.
The Company actively assesses new investment opportunities on an on-going basis and has access to a diverse pipeline of new opportunities in the natural resources and mining sectors. For pipeline opportunities deemed sufficiently attractive, Metal Tiger may invest in the project or entity by buying publicly listed shares, by financing privately and/or by entering into a joint venture.