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coPPeR sPotLIGHt

DeGrussa’s age

won’t stop Sandfire

copper surge Karl Simich

t may be nearing the end of its life but Sand- Ltd. Grace said a geological and geophysi- km land package, Sandfire hopes to repeat
Ifire Resources Ltd’s DeGrussa copper-gold cal review of existing data had already start- T3/A4, both in terms of discovery and strat-
mine is showing no signs of slowing down ed with a moving loop EM survey launched egy.
yet. during the March quarter. “We are looking at securing the most
DeGrussa has been a prolific high-grade In addition, Sandfire is drilling a deep hole strategic parts of Botswana with more than
copper producer since mining began in 2011 to get a handle on underlying structures at one provincial hub, each with primary and
but with reserves set to run out next year, its Red Bore. satellite deposits, mirroring what we see at
lifespan is short. However, with copper at “This is not conventional drilling,” Grace T3 and A4,” Simich said. “It is the tip of the
multidecade price highs, the mine is going said. “We will hit below the target and use iceberg, but we need to move forward.”
out with a bang. down-hole EM to detect massive sulphides With the mining licence application now
“DeGrussa is the engine room of the com- over a much larger area,” Grace said of the lodged, Sandfire is hopeful of being in full
pany and is generating excellent cash flow,” 2,500m deep hole. development by the turn of the year with pro-
Sandfire managing director Karl Simich said While Sandfire’s WA plans would suggest duction to start in late 2023.
during a March quarterly webcast. “There is a softening of its penchant for copper, its in- While COVID cases are still on the rise in
upward pressure on revenues and margins, ternational strategy is reinforcing its belief in Botswana, Grace said the pandemic wasn’t
and we have reduced C1 cash cost guid- the red metal. restricting Sandfire’s ability to develop.
ance for the financial year.” The March quarter saw the company sub- “There are strong pools of skills in-country,
DeGrussa produced 16,803t of contained mit the mining licence application for its T3 particularly in civils and earthworks, which
copper and 9,100oz of contained gold for the copper-silver deposit in Botswana after com- will allow us to move ahead quickly,” he said.
quarter at $US0.87/lb, keeping it on track to pleting a positive DFS in late 2020. “The electricals and engineering will come
hit the upper end of its 67-70,000t copper Simich said T3 and the wider Botswana mainly out of South Africa but there are no
and 36-40,000oz gold guidance for FY2021. portfolio represented the future of Sandfire. border restrictions like there is in Australia.
Chief operating officer Jason Grace said “We have momentum in Botswana, un- “In filling the senior roles, COVID is actu-
the company was confident such rates derpinned by the DFS on T3 and our con- ally helping us because there are good peo-
would be maintained through to the antici- tinued work on the A4 deposit where we will ple used to travelling around the world open
pated closure in early 2023. bring an expanded resource and maiden to setting up in Botswana for an extended
“We will maintain the production rates at reserve,” he said. period.”
the same level next year as this year and to Despite long-lead items having been or- Given copper’s recent surge and the com-
September 2023, which is the end of pro- dered, the T3 DFS will only be a stepping- pany’s strong balance sheet – $483 million
duction, with operations winding up in early stone to greater things if Simich receives his in cash and no debt – financing T3 should
2023,” Grace said. wish. be relatively straightforward, with chief finan-
Following that, Sandfire has plans to “The expanded resource and maiden cial officer Matthew Fitzgerald saying nine
transform the DeGrussa plant into a gold cir- reserve will be blended into a combination banks had submitted term sheets.
cuit, capable of treating the nearby Old High- study for expanding the plant from 3.1 mtpa Adding to the financing strength within the
way deposit. A maiden resource is expected to a 5.2 mtpa operation,” he said. group is Ben Crowley, the new head of in-
in the June quarter after the company drilled Since the DFS, Sandfire has completed vestor relations who recently left Macquarie
more than 2,600m of diamond holes and engineering design work towards the ex- Equities.
40,000m of RC holes. pansion with $US20 million added to the Before T3 was brought into the fold, Sand-
“The Old Highway feasibility study will be forecast capex of $US259 million to enable fire was pinning its growth hopes to the
completed by the end of the calendar year. expansion of the plant to include material Black Butte copper project in Montana how-
That will give us enough time for the plant from A4. ever, community opposition and regulatory
modifications and open pit development to The deposit is already showing signs of problems have slowed progress in the US.
coincide with the end of DeGrussa.” being as important as T3. The maiden re- The company has gone back to the draw-
Exploration will continue throughout Sand- source of 6.5mt @ 1.5% copper and 24 g/t ing board at Black Butte with further studies
fire’s 7,000sq km of ground in the Doolgunna silver is already higher-grade than T3 and and exploration programmes launched to
district in Western Australia’s Mid West with that is before the latest phase of drilling – define a clearer future for the asset.
the intent of unearthing more DeGrussa’s, 74 diamond holes – intercepted high-grade “We expect a strong improvement from
Monty’s (the second, high-grade mine be- vein mineralisation, including an interval of that work,” Simich said. Grace added that
ing treated at the DeGrussa plant) and Old 0.9m @ 61.16% copper. even without an optimisation plan, new fi-
Highway’s. “This is a type of mineralisation not pre- nancial assumptions would make the project
A major target is the recently acquired viously identified in the region and demon- “significantly better”.
Red Bore tenement 1km east of DeGrussa, strates the potential,” Grace said.
acquired via a JV agreement with Ora Gold With numerous targets on the 30,000sq – Dominic Piper

Page 28 JUNe 2021 aUSTRaLIa’S PaYDIRT