Photo by: Bloomberg
Copper miner Sandfire Resources is likely to start its Motheo operation, in Botswana, at an expanded capacity, CEO and MD Karl Simich told delegates at Paydirt’s Africa Downunder conference.
At the end of last year, Sandfire took a final investment decision on the Motheo project, based on a 3.2-million-tonne-a-year operation, delivering 30 000 t/y of contained copper and 1.2-million ounces of contained silver over an initial 12.5-year mine life.
The base case operation will require a capital investment of $259-million.
However, Simich said that the company would likely start an expanded operation at Motheo.
“It is 99.99% likely that we will go straight to an expanded facility of 5.2-million tonnes a year, producing between 55 000 t/y and 60 000 t/y of copper, essentially ramping up over a very short period of time.
“All things being equal, we will be in production around April of 2023, and I think we will be there for many, many decades to come.”
Meanwhile, Sandfire reported record sales revenues of A$813-million for the 2021 financial year, compared with the A$656.8-million reported for the 2020 financial year, with payable metal sales decreasing from 69 593 t to 65 689 t of copper, and from 40 004 oz to 37 394 oz of gold.
Cash flow from operating activities increased from the A$273.6-million reported in the last financial year to A$471.1-million, while net profit after tax increased from A$74.1-million to A$171.6-million.
“Another disciplined and focused performance at our high-margin DeGrussa operations, in Western Australia, allowed us to reap the full benefits of a rising copper price, which hit decade-long highs during the year and was reflected in record sales revenue of A$813.0-million, which in turn flowed through to surging cash flow from operations and a remarkable earnings before interest, tax, depreciation and amortisation contribution from the DeGrussa operations segment of A$549.8-million,” said Simich.
“The incredible performance of our Western Australian operations allowed us to post a record net profit after tax of A$170.1-million and reward our shareholders by declaring a record final dividend of 26c a share, taking the full-year payout to 34c a share, an increase of nearly 80% on 2020’s dividend.”
Simich said production was set to continue at full pace at DeGrussa until the September 2022 quarter, with production targeted at between 64 000 t and 68 000 t of copper and between 30 000 oz and 34 000 oz of gold at a C1 cost of $1.00/lb to $1.10/lb.
“This will ensure we can continue to take full advantage of the strong copper price environment, with no significant tailing off or ramp-down, as is typically seen at the end of the life of many mines.
“A major focus for us will be the continued development of the new Motheo copper mine in Botswana, where construction is rapidly ramping up following the grant of the mining licence in July.”