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Ann: Drilling Update at T3 and T1 Projects, page-26

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sharman

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28/05/18

18:33

Post #: 33341369
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Originally posted by Dr Jonathan West ↑

JID (John) ... thanks for you post. That was a good synopsis for shareholders, so well done.

From my perspective, MOD is sitting in a continuation of the Zambian copper belt which extends into what is now referred to as the Kalahari copper belt. Cupric (and previously Discovery Metals who first found the Cupric ore bodies before the banks foreclosed on DML and Cupric bought it for a fraction of its value) are sitting on plus 400 million tonnes of plus 1% copper and useful silver credits so we now know that the copper belt extends into Botswana - big-time!! and that the MOD ground is a logical extension of this belt to the west.

I first bought into DML in 2007, when they first started drilling what is now the Cupric ground and I have always thought that this area was a major copper district. Was more than a little miffed when DML went into receivership (despite having a massive resource and new plant) and the assets were sold to Cupric for a song by the bankers. I have always thought that the copper belt continued to the west of Cupric's ground and that MOD has similar potential and the number of targets, anomalies and similar structures and geology support that view. That is why I have invested in MOD. It will take some time for the overall picture to emerge but I am very confident that they will have similar sized resources and that they will end up with long life profitable operations.

For me there are two issues that they will need to manage, aside for getting exploration success (which I think will happen and probably pretty quickly given the drilling program that they now have).

The first is not making the same mistake as DML did when it commenced mining. DML went straight to open pit in loose unconsolidated ground which resulted in large strip ratios and the initial ore zone was also depleted. This cruelled their start up performance and not only caused serious cash burn beyond that projected but exposed them to the banks/lenders to the extent that their ability to repay the loans was seriously affected (the capital for mine/plant construction was $160 million). So I want to see a careful assessment of the least risk approach to mine start up.

The other potential concern will come with exploration success and that is the likelihood of a takeover. High quality resources are in demand and if MOD has anything approaching what Cupric have we are likely to be taken out by a major. Now generally I have no problem with a takeover, as long as the price offered is fair and reasonable and reflects the true value of the asset. If MOD gets a lot of exploration success, I would expect any takeover offer to happen sooner rather than later, as any potential bidder would want to get control of the asset before the real value of it was understood by the market and shareholders. So, with respect to that issue shareholders will need to stay alert and be prepared to respond to this scenario.

In the meantime, I am looking forward to ongoing exploration results as I have high expectations that there will be multiple discoveries on the MOD tenements.

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Apparently the oxidised ore was a major problem at Boseto. It looks like DML didn't perform enough testing in regards to metallurgy and really struggled to process the oxidised ore. I'm told the oxidised ore was one of the the greatest contributors in bringing them down. Luckily so far oxidised ore is not a problem for MOD at T3 as the calcrete layer has prevented oxidisation. Metallurgical studies at T3 have been out standing so far.

http://www.mmegi.bw/index.php?aid=52508&dir=2015/july/10

Last edited by sharman: 28/05/18

MOD Price at posting: 4.5¢ Sentiment: None Disclosure: Held
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