Sandfire updates feasibility study on Black Butte incorporating another deposit
Vancouver-based Sandfire Resources America finds in an updated prefeasibility study (PFS) on the Black Butte copper project, in Montana, the potential to generate $3.3-billion in gross revenue and $1.3-billion in pre-tax net cashflow during mine operations, based on a copper price of $4.70/lb.
The updated study incorporates the nearby Lowry copper deposit in the mine plan, which significantly enhances the project's long-term value.
The project now has a pre-tax net present value (NPV) of $213-million and an internal rate of return (IRR) of 15.6%. On an after-tax basis, the NPV is $126-million and IRR 13.3%, using conservative copper pricing.
Using spot copper prices of $6/lb, the pre-tax NPV increases to $707-million and the IRR to 30.4%, and the after-tax NPV increases to $516-million and IRR to 26.3%.
The addition of the high-grade Lowry deposit to the existing Johnny Lee deposit is expected to lower unit operating costs by $2.28/t, while extending the mine life by four years through the use of a more cost-effective, mechanised long hole stoping mining method in the Lowry deposit, and by realising operational efficiencies through concurrent mining practices.
The updated study contemplates an improved 12-year mine life, compared with eight years in the initial PFS published in January.
Black Butte is poised to produce 31 000 t/y of contained copper metal at a direct operating cash cost of $2.68/lb.
The capital cost estimate of the project remains unchanged at $474-million.
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