PERTH (miningweekly.com) – A feasibilitiy study into the Johnny Lee deposit, at the Black Butte copper project, in Montana, has found that the deposit would underpin a mine life of eight years, at a production rate of 1.2-million tonnes of ore a year.

The North American subsidiary of ASX-listed Sandfire Resources, Sandfire Resources America, has reported a maiden mineral reserve of 8.8-million tonnes, grading 2.6% copper for 226 100 t of contained copper at Johnny Lee.

The project is forecast to produce a total of 805 000 t of copper concentrate containing 189 500 t of copper metal over its mine life, generating gross sales of $1.3-billion and pre-tax net cashflows of $518-million.

Sandfire Resources America has estimated that the project would cost $274.7-million to develop, and would have a pre-tax net present value of $124.9-million and a post-tax net present value of $77.6-million.

“The positive outcomes of the feasibility study show that we can deliver a robust underground mining project at Black Butte that meets the world’s highest environmental standards while at the same time creating jobs, opportunities and significant direct and indirect benefits for the state of Montana,” Sandfire America CEO and project director Rob Scargill stated.

“This is one of the highest-grade copper deposits in the world and one of the very few fully-permitted and development-ready copper assets globally. The feasibility study delineates a clear pathway to unlocking its value for our shareholders in a manner that is consistent with world-best practice in environmental, social and corporate governance and community engagement.

“The project will employ 240 full-time, highly paid employees along with 20 to 30 full-time contractors as well as providing significant economic benefits for all stakeholders in the local community and Montana at large. We have already commenced pre-construction earthworks on the site employing over 30 Montanans through local contractors, in addition to our own dedicated team.

“We are excited about the opportunity to move this high-quality project forward and position it to meet what is increasingly emerging as a new era of demand for copper driven by its growing use as a key input to renewable and clean energy applications, including the electrification of transportation globally,” said Scargill.

Sandfire MD and CEO Karl Simich said that the completion of the Black Butte feasibility study for the Johnny Lee deposit marked an important milestone towards the development of the underground mining project.

‘Having completed the extensive permitting process for Black Butte, which is the first major mining project in Montana to be permitted in over two decades, we are well placed to continue to advance this high quality, high grade copper development asset in a measured and sensible manner, and also to respond to and deal with the legal challenges that have been filed in recent months.”

Simich said that Sandfire is also completing the feasibility study on its T3 copper project, in Botswana, which is due for completion in the December quarter of this year.

Meanwhile, Sandfire on Wednesday reported that full year production from its DeGrussa mine, in Western Australia, would be at the top end of the guidance, with copper production expected at between 67 000 t and 70 000 t, while gold production is targeted at between 36 000 oz and 40 000 z.

The miner has reported an increase in both copper and gold production for the quarter ended June, with copper production up from 17 936 t in the previous quarter, to 19 313 t, while gold production was up from 9 352 t to 13 541 t in the same period.