Mod in $27m copper deal

MOD Resources has moved to full ownership of its T3 copper project in Botswana, after acquiring UK-based Metal Tiger’s stake of the project in a scrip deal worth $26.6 million.

Under the agreement, Mod will purchase Metal Tiger’s 30 per cent interest in the project for a consideration of 17.2 million shares and 40.5 million options.

The shares have a 12-month escrow period and the deal leaves Metal Tiger with a 12.5 per cent stake in Mod.

Metal Tiger will still hold a 30 per cent interest in Mod’s joint venture exploration assets following the transaction.

Managing director Julian Hanna said the agreement provided a number of benefits to Mod.

“Firstly, it will consolidate ownership of the very substantial T3 copper project which, assuming a decision to mine is made in early 2019, should underpin the future of this company for many years,” he said.

“Secondly, it provides a very flexible structure for Mod, with options to acquire MTR’s interests in any new discoveries that reach the scoping study level within three years, and an option to consolidate the remaining exploration assets three years after completion.

“This transaction also lays the foundation for the financing and development of the T3 project and positions Mod as a dominant player in the Botswana copper belt.”

Sternship Advisers acted as Mod’s financial adviser and DLA Piper was its legal adviser.

In January, Mod released a pre-feasibility study for T3, which estimated a capital cost of $190 million.

Earlier this month, the company upgraded the mineral resource at the project by 44 per cent.

Shares in Mod finished down 2.08 per cent at 47 cents each today.