PERTH (miningweekly.com) – Copper miner Sandfire Resources has struck an agreement with joint venture (JV) partner Talisman Mining to acquire its 30% interest in the Springfield JV.

Under the terms of the agreement, Talisman will receive A$72.3-million in cash in return for its subsidiary Talisman A, which holds the interest in the Springfield JV.

In addition, Talisman will also receive an ongoing 1% net smelter return royalty on any future discoveries at the Springfield JV, which includes the Monty copper/gold deposit, which is currently being developed as a new satellite underground mine to feed the nearby DeGrussa operation, as well as the surrounding exploration tenements.

The Springfield JV also includes Talisman’s interest in the Halloween West project.

“Since our original farm-in deal in December 2013, we have had a long and positive collaboration with Talisman, which paved the way for the discovery of the high-grade Monty deposit in 2015, and ultimately the development of the first satellite mining operation outside our existing DeGrussa operations,” said Sandfire MD and CEO Karl Simich.

“This transaction allows Talisman and its shareholders to crystallise significant upfront value for their share of the Springfield project on attractive terms, allowing them to focus on their other projects in New South Wales and Western Australia, while retaining exposure to any future exploration success via an ongoing royalty over any future discoveries made at the Springfield JV.”

Simich said that, for Sandfire, the transaction would simplify and streamline the development of Monty and any future exploration going forward.

“As the owner of the only operating base metals processing plant in the region, our strategic focus is on consolidating growth opportunities in the district which allows us to leverage this infrastructure and further strengthen our dominant footprint across the Bryah basin, which now totals over 6 200 km².”

The Monty feasibility study details forecast total production of 74 400 t of contained copper, 38 400 oz of contained gold and 413 400 oz of contained silver, over an initial ore production life of 30 months.

The transaction is subject to a number of conditions, including the execution of a share sale agreement and royalty agreement by the end of June, as well as Talisman shareholder approval and the approval of Taurus Mining Fund.

Sandfire will fund the acquisition from its existing cash reserves, which total some A$188-million.