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ReGIonAL RoUnD-UP

Sandfire enters Spanish

copper bullring

pain will provide Sandfire Resources
SNL a bridge between Western Australia
and Botswana after the ASX-listed copper
miner announced the $US1.86 billion ac-
quisition of the Minas De Aguas Teñidas
(MATSA) copper complex in Huelva prov-
ince.
Sandfire has been busy reorganising its
portfolio in recent years as it faced the end
of reserves at its prolific DeGrussa copper
mine in Western Australia. It had already
acquired the Black Butte copper project in
Montana, US and is currently building the
T3 copper project in Botswana.
However, with DeGrussa operations set
to end next year and T3 still 18 months
away from production, Sandfire was facing
a sizeable gap in its production forecasts.
The acquisition of MATSA from Trafigura
and Mubadala Investment Company is de-
signed to instantaneously fill that gap but
given the size of both the asset and transac-
tion, it could be seen as a company-maker.
The mine has been operating since 2009,
consistently producing more than 100,000
tpa copper equivalent through a 4.7 mtpa The MATSA copper complex near Seville, Spain will become Sandfire’s cornerstone asset
central processing facility. Reserves stand on completion of the transaction
at 36.1mt @ 3.1% copper equivalent for six Sandfire was in a position to act when the ing a very good price. It suits the sellers and
years of mine life with resources at 122mt current owners did place MATSA on the it suits the buyer.”
@ 3.3% copper equivalent potentially push- market. Having been held privately for so long,
ing life out to 12 years. “It was a competitive process, but impor- MATSA is perhaps not well known in public
The addition of MATSA’s 100-120,000t tantly we were agile, proactive and could markets, according to Simich.
copper equivalent at C1 cash costs guided meet an extraordinarily short timetable,” “The market is not that aware of the as-
for FY2022 will immediately vault Sandfire Simich said. set but the mining industry is well aware,”
into the upper echelons of Australian cop- “I believe there was a very strong first he said. “The focus will be different and the
per producers. round of bidding from multiple people. The asset will probably be valued slightly differ-
“Base metal assets which offer this com- vendors were quick to move to the second ently. By just aligning specialist mining peo-
bination of scale, grade, mine life and ex- stage and we accommodated that. We did ple, you are giving it an opportunity to open
ploration upside are extremely rare global- a lot of work in a short period of time. it up on so many fronts.”
ly,” Sandfire managing director Karl Simich Given international trading house Trafig- After an extensive due diligence pro-
said. “The MATSA acquisition transforms ura is more focused on the end-product cess, Sandfire chief operating officer Jason
Sandfire into a first quartile copper produc- than the operation, the Sandfire team is al- Grace sounded excited to get the MATSA
er of global scale and allows us to leverage ready eyeing opportunities to improve per- keys in his hand.
our skill set to deliver on our growth ambi- formance at a mine where C1 cash costs “We’ve been very impressed with the
tions to create one of the highest quality are guided at US40-50c for FY2022. quality of the asset, it is a well-capitalised
and most compelling copper exposures on “Trafigura’s objective every day was to site, but we see a number of opportunities,”
the ASX.” get as much concentrate as they could but Grace said. “With a concerted and very
Sandfire has made no secret of its de- they didn’t need to expand the resource/re- proactive exploration push into the region,
sire to deploy its growing balance sheet serves out any further than satisfying those we believe there is significant upside in fu-
strength on new acquisitions and Simich requirements for concentrate,” Simich said. ture discoveries, using the latest technolo-
said the deal with Trafigura/Mubadala had “With $US7-8 billion profit in the last 12 gies.
delivered a prize target. months with only a third from mining and “There is opportunity to convert resourc-
“We’ve been trying to buy half of this metals. I’m sure Trafigura looked at the es to reserves and bring them into the mine
asset one way or another for about four commodity market and thought it was an in- plan which will likely increase value and
years,” he admitted. teresting opportunity to receive that invest- overall metal production.
Debt-free and with the high-grade De- ment up front. “And, we want to utilise the strong invest-
Grussa mine delivering wide margins, “From a market perspective we are pay- ment the previous owners made by bring-

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