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New production targets for Sandfire as Simich steps down

30th September 2022

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

     

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PERTH (miningweekly.com) – Copper/gold miner Sandfire Resources has lifted its production guidance for 2023, announced the departure of its MD and CEO, Karl Simich, and completed a key financing milestone for its Motheo project, in Botswana.

Sandfire on Friday announced that group production for the 2023 financial year is now targeted at between 83 000 t to 91 000 t of copper, up from the previous estimate of between 81 000 t and 89 000 t of copper.

Gold production expectations have also increased from the previous 10 000 oz to 12 000 oz, to between 12 000 oz and 14 000 oz.

Meanwhile, zinc production expectations have remained unchanged at between 78 000 t and 83 000 t, while lead production targets have remained between 6 000 t 10 000 t, and silver production between 2.2-million and 3.2-million ounces.

The increased production was driven by a solid start to the 2023 financial year, and more production being wrung from the DeGrussa asset, in Western Australia.

The company told shareholders that there has been a strong production start to the 2023 financial year, with the September quarter contained copper production expected to be on guidance at some 28 000 t and zinc production above guidance at 18 000 t from the MATSA and DeGrussa operations, in Spain and Western Australia.

Sandfire on Friday announced that following the completion of a feasibility study at the DeGrussa project, the company will start a processing extension project, based on processing heavily transitional stockpiles and mineralised waste stockpiles remaining on site at the end of the current operations.

Underground mining operations are completing at the DeGrussa with the final stopes to be extracted and hauled to surface by early October 2022. Processing of run-of-mine stockpiles will continue until around the end of October 2022, after which the 1.6-million tonne a year DeGrussa Concentrator will transition to low grade copper stockpiles.

Sandfire said that the processing extension project is based on using the existing DeGrussa flotation plant with minimal circuit changes, adopting a simplistic approach to treat whole stockpiles with oxide reagents.

The processing plant is expected to continue operating until January 2023, treating approximately 310 000 t of ore at an average grade of around 1% copper. Due to the transitional mineralogy and grade of this ore, recovery is targeted to be around 70% for copper and 40% for gold. This is expected to deliver about 2 000 t of copper and 2 000 oz of gold contained within around 10 000 t of concentrate at a grade of around 22% copper and 5g/t gold.

Plan scale trials on processing of oxide copper stockpiles have also commenced and are scheduled to be completed in October 2022, and the results of these trials may support further extension of processing at DeGrussa beyond January 2023, Sandfire told shareholders.

Meanwhile, Sandfire on Friday also announced that it had completed the final documentation for the $140-million project finance facility with Nedbank and Société Générale to underpin the construction of its new 5.2-million tonne a year Motheo copper mine in Botswana, with peak production of 55 000 t/y contained copper in concentrate with silver credits.

The Motheo project finance facility has a seven year tenure with scheduled repayments commencing in December 2023.

Construction of the Motheo copper mine is being funded through a combination of cash and the proceeds of the Motheo project finance facility, underpinning the current development ahead of expansion of the operations to 5.2-million tonne a year driven by the inclusion of the A4 open pit.

First production from Motheo is on track for the June quarter of 2023, and as of the end of September, some $185-million of the $325.5-million development capital has been spent.

Total development capital for the Motheo copper project expansion case is estimated at $397.4-million, incorporating development costs for the A4 open pit and 5.2-million tonne a year plant expansion of $47.9-million.

The company has also completed its first scheduled $118-million repayment against the $650-million MATSA finance facility, following completion of the MATSA acquisition in February this year.

This payment has reduced the outstanding balance on the facility to $532-million. The next payment of $80-million is due in January next year.

Additionally, Sandfire has announced the resignation of founder Karl Simich from the role of MD and CEO, after 15 years at the helm.

Sandfire told shareholders that now was the logical time for a leadership transition as Sandfire continues the next phase of its growth path as an international copper miner.

Sandfire COO Jason Grace has been appointed as acting CEO while an ongoing global executive search process for Simich’s successor is concluded. Grace will be supported by CFO and company secretary, Matthew Fitzgerald.

“After what has been an incredible journey over the past 15 years, I believe now is the right time to hand over the reins to a new CEO to take this company forward into the next decade. I am immensely proud of everything the Sandfire team has achieved during my tenure – which has seen the company evolve from junior explorer to successful mid-tier miner and now an emerging and globally significant copper mining company with a very exciting future across some of the world’s best copper belts,” Simich said on Friday.

“We have built up an incredible team of people, a strong culture, world-class systems and a business underpinned by quality assets. With the MATSA acquisition complete, Sandfire has a strong foundation for the next decade and with the Motheo development on track - is about to spread its wings as a growing copper producer in the Kalahari Copper Belt. As the company’s largest individual shareholder, I look forward to sharing in our continued success into the future.”

Edited by Creamer Media Reporter

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