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PERTH (miningweekly.com) – Copper/gold miner Sandfire Resources has acquired a 36% stake in TSX-listed copper developer Tintina Resources by investing some C$16-million.
Sandfire on Thursday told shareholders that it had subscribed for 80-million shares in the Canadian company, at a placement price of C$0.20 each, to gain exposure to Tintina’s Black Butte copper project, in the US.
MD Karl Simich said the acquisition of a major interest in Tintina represented one of the company’s most significant business development initiatives to date.
“This gives Sandfire a cornerstone position in a premier high-grade, high-margin copper asset with a pathway to production, outstanding growth upside and the potential to generate significant value for shareholders and other stakeholders.”
The Black Butte project contains a measured and indicated resource of some 15.75-million tonnes, grading 3.4% copper, for 533 000 t of contained copper, and an inferred resource of 2.3-million tonnes, grading 2.8% copper, for 63 500 t of contained copper.
A preliminary economic assessment has demonstrated that the project could be developed as an underground mine producing some 30 000 t/y of copper, at a cash cost of $1.80/lb over a mine life of 11 years. It was estimated that the project would require a capital investment of around $218-million.
“It represents an excellent strategic fit with our existing project portfolio and with our core strengths and capabilities as an organisation. It also supports our vision to grow Sandfire beyond DeGrussa. Projects like this don’t come along every day and we are delighted to have secured this compelling growth opportunity for our shareholders,” Simich added.
He pointed out that Black Butte’s exploration potential was also considered excellent, as the known mineralisation formed part of a large alteration system, similar in size to some of the world’s largest copper deposits.
“Exploration outside of the main deposit has been limited, with drilling confined to defining the known resource since the early days of the discovery.”
Simich added that the investment into Tintina gave Sandfire a base in North America from which to assess future acquisition opportunities, as well as the opportunity to work alongside the Canadian company’s other strategic shareholders.
Sandfire’s C$16-million investment into Tintina would be used to fund a feasibility study into the Black Butte project and to pursue project permitting, as well as to fund other exploration in the area.