#MTR Botswana prospect, risks & copper prices.

Information about the MOD/MTR copper prospect in Botswana and copper demand.

1. Top 10 copper mines in the world have average cu grade ranging between 0.25 – 1.52% Cu whilst T3 majority of mineralization intersections range between 0.8-3.2% Cu.

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The Botswana T3 prospect therefore has the appropriate copper grades.

2. Information about the Kalahari Copper Belt can be found here.

3. Information about the MOD / MTR joint venture can be found here.

4. The copper supply gap due to falling copper grades and upturn in copper demand from developing countries is predicted to create a copper shortage in the coming years. New mines need to come on stream to meet demand.

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5. MOD geologist (Rensburg) said he had never seen anything like the borehole arisings  in his career drilling 900 boreholes in Botswana.

6.Interest shown by other companies in the results coming from the Botswana JV.

7. The team on the ground in Botswana believe other areas in the licence area will turn out to be bigger than T3.

8. Dowgate brokers note has an NPV of $472m for Botswana.

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Potentially the Botswana prospect is huge, on a scale not seen in the area before.

 

Are more copper discoveries going to be announced?

The JV have so far concentrated on an area of less than 1% of T3 and have now commenced a wider drilling programme.

 

This means earlier rather than later it will be known if the areas highlighted as being of more interest than T3 are as good as predicted.

News due from Botswana.

  • More drill hole results
  • Open pit evaluation study due December 2016.

 

The Risks

  • Copper demand doesn’t increase inline with the expectations. Some major players are convinced demand will increase and this is demonstrated by these actions:

1. Codelco who are the major owners of 3 of the top 10 mines are spending $25 billion to maintain output.

2. The  Escondida mine owned by BHP Billiton and Rio Tinto have completed a $4.2 billion expansion and are spending another $3.4 billion on water facilities. This will still result in a sharp fall in output due to a decline in ore grades.

Companies spending billions in the belief copper demand is going to increase in the       longterm.

  • T3 open pit mine study indicates not viable. Would MOD commission a report if believed open pit not viable?
  • Copper price short to medium term drops impacting investor confidence.
    • It shouldn’t as any bid for T3 will be based on the longterm copper price.
    • Why are China stockpiling copper if price is going to fall? You wouldn’t buy today if going to be cheaper tomorrow.
  • Wider drill programme indicates T3 a one off. T3 on its own will be a business changer for MOD/MTR.

Conclusion.

Before the end of 2016 events are going to take place that should provide shareholders with a higher degree of certainty regarding the potential for the Botswana copper prospect.

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