PERTH (miningweekly.com) – Copper miner Sandfire Resources on Wednesday announced that it would advance plans to increase the size of its Motheo copper project, in Botswana, from 3.2-million tonnes a year to 5.2-million tonnes a year, after declaring a maiden ore reserve for the satellite A4 deposit, along with a prefeasibility study (PFS) for the expansion case.
The miner earlier flagged the likelihood of starting the Motheo operation at an expanded capacity, with the project expected to produce between 55 000 t/y and 60 000 t/y of copper.
An internal PFS into the expanded mining operation has estimated a 47% increase in the estimated life-of-mine revenue, which is now estimated at $3.6-billion, and a 116% increase in the pre-tax net present value to $682-million and an internal rate of return of 36%.
Sandfire told shareholders that an additional $71-million of pre-production capital would be required for the process plant expansion to 5.2-million tonnes a year, and the development of the A4 openpit mine, in addition to the $259-million required for the base-case development scenario.
The mine life of the expanded project has been estimated at 10.5 years, with peak production expected to reach 60 000 t/y of copper in concentrate, while the life-of-mine C1 costs have decreased by 20%, compared with the smaller operation, to $1.32/lb and all-in sustaining costs have decreased by 15%, to $1.56/lb.
The expanded production case was based on a maiden probable ore reserve of 9.7-million tonnes for the A4 deposit, which is located some 8 km west of the Motheo copper project.
Some 85% of the contained copper in the updated mineral resource is now classified as ore reserves, Sandfire told shareholders.
Sandfire MD and CEO Karl Simich said the maiden A4 ore reserve and positive expansion case PFS marked another pivotal milestone in the company’s plans to establish a major new long-term mining hub at Motheo.
“The completion of this maiden ore reserve at A4 provides the incremental increase in ore feed required to lift our planned production rate at Motheo to 5.2-million tonnes a year, with the PFS showing that an expanded project will deliver a very positive uplift in the project’s overall economic credentials, including an 88% increase in pre-tax net cash-flow to $1.24-billion.
"Encouragingly, 85% of the current A4 mineral resource has been converted to ore reserves, a very pleasing result which bodes well for our ongoing exploration across the Kalahari Copper Belt.
“Given the high conversion rate for this maiden ore reserve, and the very positive outcomes from the fast-tracked PFS that supported the reserve estimation, we believe it makes good commercial sense to proceed immediately to a definitive feasibility study (DFS) for the 5.2-million-tonne-a-year expansion case, with the intention of blending high-grade ore from the A4 openpit with baseload feed from the T3 openpit,” said Simich.
“The work to support this study is already well underway, and we expect to announce the details of the DFS in the first quarter of next calendar year.
“We have already identified several opportunities to enhance the economic outcomes of the PFS, particularly in the area of mine scheduling. At the moment, the mine schedules for both T3 and A4 openpits have been optimised separately, however, we believe we can deliver enhanced outcomes in the DFS by combining and optimising the two pits with an integrated mine sequence.
“In parallel with these development studies, we are also continuing a major drilling campaign both in the near-mine area as well as across our extensive landholding in the Kalahari Copper Belt.”