ASX-listed Sandfire Resources America has announced a maiden mineral reserve of 8.8-million tonnes at 2.6% copper for 226 100 t of contained copper for the Johnny Lee deposit at the company’s Black Butte copper project. 

The company also published a feasibility study on the deposit, which is the cornerstone deposit of the Black Butte copper project, in White Sulphur Springs, Montana.

The Johnny Lee deposit underpins an eight-year mine life and is designed to be mined to 1.2-million tonnes of ore a year.

The feasibility study envisions the deposit producing 805 000 dry tonnes of copper concentrate, containing 189 500 t of copper metal, over the life of the deposit.

With average production of about 23 000 t/y of copper metal, the project is forecast to generate post-tax cash flows of $77.8-million a year, based on a copper price of $3.20/lb and a cash cost for the company of $1.51/lb.

The project has an estimated post-tax net present value of $77.6-million and will require a construction capital cost of $275-million.

Meanwhile, Sandfire also published an updated mineral resource of 8.3-million tonnes at 2.4% copper for 199 500 t of contained copper for the Lowry copper deposit, which is located 3 km southeast of Johnny Lee.

However, the Lowry deposit is not covered by the current environmental permits and will need to undergo a further permitting and approvals process before further development takes place.

The deposit is a high priority for the company’s next round of exploration.

Sandfire CEO Rob Scargill says the positive outcomes of the Johnny Lee feasibility study show that the company can deliver a robust underground mining project at Black Butte that meets the world’s highest environmental standards, while creating jobs, opportunities and significant direct and indirect benefits for the State of Montana.

“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 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 governance aspects 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 started pre-construction earthworks on the site, which is employing more than 30 Montanans through local contractors, in addition to our own dedicated team,” Scargill adds.

He concludes that the company is 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 in renewable and clean energy applications, including the electrification of transportation globally.