PERTH (miningweekly.com) – Copper miner Sandfire Resources has reported a strong December quarter, with the miner maintaining its full year production guidance.
Copper production in the December quarter reached 18 675 t, up from the 15 946 t produced in the September quarter, bringing half-year production to 34 621 t.
Gold production in the quarter increased to 8 739 oz, up from the 7 515 oz produced in the previous quarter, with gold production in the December half-year reaching 16 254 oz.
Sandfire on Thursday told shareholders that copper production for the full 2022 financial year was expected to reach between 64 000 t and 68 000 t, with gold production targeted at between 30 000 oz and 34 000 oz.
“Sandfire has hit the ground running in 2022 following an excellent December quarter for the Group. Our $1.8-billion acquisition of MATSA has progressed rapidly towards completion, the ramp-up of construction activities gathered momentum at our new Motheo copper mine in Botswana, pre-development and optimisation activities advanced at Black Butte in the US, and our global exploration effort continued in multiple locations around the globe,” said MD and CEO Karl Simich.
“All of this was underpinned by another outstanding operational, cost and financial performance by our DeGrussa operations in Western Australia, notwithstanding the impact of increasing diesel and power costs and the general environment of cost inflation being experienced in the resource sector.
“The imminent completion of the MATSA acquisition will mark a momentous occasion for Sandfire and all of our stakeholders. We received the final regulatory approvals from the relevant Spanish authorities in late December 2021, which means that all conditions precedent for this landmark acquisition have now been satisfied. The transaction is now unconditional and will proceed toward completion on or around January 31.
“Since first announcing the acquisition in September, the Sandfire and MATSA teams have been working tirelessly to ensure an orderly and efficient integration of the MATSA operations into our business, and I am really looking forward to seeing this process step up a gear as we take ownership of MATSA in the coming days.
“With the acquisition of MATSA, Sandfire immediately becomes one of the largest copper-focused base metal producers on the ASX, with high-quality operations in Spain and Australia and an impressive growth pipeline and exploration portfolio that will drive our growth for decades to come.”
The MATSA operation is a large, high-quality, long-life underground copper operation in Spain, which comprises three mining operations feeding a 4.7-million-tonne-a-year central processing facility, producing between 100 000 t/y and 120 000 t/y of copper equivalent.
As part of the transaction, Sandfire will retain a life-of-mine concentrate offtake agreement with commodity trader Trafigura for all of the production from the Spanish mine.
Meanwhile, Simich noted that the DeGrussa mine, in Western Australia, enjoyed a strong December quarter with copper and gold production in line with guidance, noting that the company remained on track to achieve its 2022 production guidance.
“We have increased our C1 cost guidance, principally due to high diesel prices and increased shipping costs, which have been prevalent around the world in recent months. We are also working extremely hard to prepare the business for the scheduled re-opening of the Western Australian borders on February 5, ensuring we have updated protocols in place to maintain business and operational continuity,” said Simich.
“The December quarter also saw positive progress on other fronts, with the delivery of a maiden mineral resource estimate for the Old Highway gold deposit, 20 km from the DeGrussa mine. This will underpin ongoing studies for the potential development of a future gold operation leveraging DeGrussa’s existing processing infrastructure.
“At the new Motheo copper mine in Botswana, our construction teams are rapidly gearing up and we now have 750 people on site. Key recent milestones included the award of a number of major contracts and the mobilisation of AMS to site. Our in-country Botswana team continues to do a wonderful job managing the ramp-up of construction while keeping our workforce and contractors safe, with strong protocols in place to manage the transmission of Covid-19 following the recent emergence of the Omicron variant.
“At Black Butte, we continue to work on optimisation and pre-development programmes while managing the ongoing legal challenges,” Simich added.
“With the MATSA transaction about to complete and our Australian operations continuing to perform strongly, Sandfire is in an exceptional position to capitalise on the strong outlook for copper over the next few years. Copper, with its unique characteristics, is a vital ingredient in the global energy transition and demand from the renewable energy industry is widely expected to become the key driver of growth of the copper market over the next four to five years.”