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MODERN MINING
July 2015
feature
COUNTRY FOCUS –
BOTSWANA
I
n terms of the MoU, Sedgman, which
is listed on the ASX, will inject up to
US$1,5 million into feasibility studies
relating to Mahumo, including engineer-
ing and management services, and – in
return – will earn up to a 10 % interest in the
project via a joint venture arrangement (the
Mahumo JV). Sedgman is a provider of servic-
es to the global mining industry and has ex-
perience of working in Botswana, having been
the designer and contractor for the processing
plant at the Boseto mine.
In its statement announcing the MoU, MOD
says the agreement defines key terms for three
additional documents which will require fur-
ther negotiation and agreement by MOD and
Sedgman. These documents are the Mahumo JV
agreement, the Mineral Processing Plant (MPP)
contract and the operations contract. Subject to
agreement of operational and commercial terms
and finalisation of these contracts, MOD will
appoint Sedgman as the exclusive designer,
constructor and operator of the MPP at the
Mahumo project.
Independent Metallurgical Operations
(IMO), reputedly Australia’s largest metallur-
gical consulting group, will be appointed as
an independent reviewer to confirm to MOD’s
satisfaction that the design and pricing of the
MPP and the structure, pricing and KPIs for the
operations contract are commercially competi-
tive and appropriate for comparable operations
in Southern Africa. Terms of the contract will
be reviewed after an initial two-year period,
then at three-year intervals.
The Mahumo JV will also include a mecha-
nism for Sedgman to invest in MOD equity up
to a defined limit at a defined discount to the
share price at the time.
Commenting on the agreement, MOD’s
Managing Director, Julian Hanna, said the
board considered the MoU with Sedgman an
excellent outcome for the Mahumo project.
“Sedgman has the capacity to bring substantial
resources, expertise and in-country experience
to assist the potential development of the proj-
ect from feasibility, through to possible plant
construction and operation. The US$1,5 mil-
lion of services to be provided by Sedgman will
also significantly reduce the amount of funding
required by MOD to complete the proposed fea-
sibility studies,” he said.
“The structure of the proposed Mahumo
Joint Venture will result in minimum dilution
of MOD’s equity in the project. It should also
allow the company to focus on its core strengths
of expanding high grade resources at Mahumo
Sedgman
to earn into the
Mahumo
There are only two really significant players in Botswana’s
Kalahari Copperbelt. One, of course, is US-based Cupric
Canyon Capital, which is developing the Khoemacau
underground copper mine (and which has reportedly
also acquired the adjacent Boseto copper mine from the
liquidators of Discovery Metals), and the other is ASX-listed
MOD Resources (MOD), based in Perth, Western Australia.
MOD owns the very promising Mahumo copper/silver
project. In a significant step forward for Mahumo, MOD
has announced that it has signed a binding Memorandum
of Understanding (MoU) with Sedgman, which will see the
latter company participating in the project.