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PERTH (miningweekly.com) – A feasibility study (FS) into the Monty copper-gold joint venture (JV) between ASX-listed Sandfire Resources and Talisman Mining has confirmed that the project can be developed into a satellite ore source for the DeGrussa operation, in Western Australia.
The FS found that Monty could deliver some 70 000 t of copper and 21 000 oz of gold, as well as 288 000 oz of silver over a three-year period, following one year of access development.
The project will require a capital investment of A$90-million, which will fund surface infrastructure, access roads, mine development, underground mine infrastructure and mine service and administration costs.
Sandfire and Talisman will jointly fund the development of the project, based on their shareholding, with Sandfire telling shareholders on Thursday that the company will fund its portion of the capital expenditure from existing cash reserves and further cash flow from its DeGrussa mining operation.
Further, Sandfire has agreed to buy Talisman’s 30% share of the Monty ore under an ore sale and purchase agreement, with all of the ore from the Monty project to be blended into the DeGrussa processing plant.
The existing 1.6-million-tonne-a-year mining rate at DeGrussa will progressively reduce from mid-2019, to allow capacity for ore from Monty to be blended, and resulting in an alignment of the production profiles of the two mines through to 2021.
Sandfire MD Karl Simich said on Thursday that the completion of the FS on Monty marked another significant milestone for the company towards its objective of unlocking the full potential of the Doolgunna region.
“Monty will be the first new copper mine at Doolgunna outside of DeGrussa, and we believe the discovery and rapid development of this high-quality deposit represents the start of an exciting new chapter for this emerging volcanic massive sulphide province,” he said.
“The FS has delivered impressive results, confirming the technical and financial robustness of the Monty project as a satellite source of ore feed for DeGrussa. This confirms that Monty will make a significant contribution to the production profile and overall economics of the DeGrussa mining operation.”
Talisman MD Dan Madden has, meanwhile, said the execution of an ore sale and purchase agreement allowed Talisman to proceed with a low-risk and low capital intensity development route.
“Talisman will sell its share of the Monty ore to Sandfire and thus be effectively leveraging off the existing DeGrussa processing plant and infrastructure only 10 km from Monty. This is a highly logical outcome that provides significant economic benefits directly to Talisman while minimising our exposure to processing and product risk.”
In addition to the ore sales and purchase agreement, the two companies have also signed a more detailed exploration JV agreement over the Springfield project, as well as a mining JV agreement over Monty and its immediate surrounding area.
Meanwhile, a mining lease covering the Monty JV has been granted, and Sandfire expects all remaining approvals to be in place by the end of this year.