Sandfire's swing from WA to Kalahari copper

Now that Sandfire has received the mining licence for its US$279 million (A$364 million) Motheo copper project in Botswana, the market’s focus shifts to a soon-to-released updated mineral resource for the project’s satellite A4 deposit (writes Barry Fitz)
16th July 2021
Resources Rising Stars

Now that Sandfire has received the mining licence for its US$279 million (A$364 million) Motheo copper project in Botswana, the market’s focus shifts to a soon-to-released updated mineral resource for the project’s satellite A4 deposit (writes Barry FitzGerald on MiningNews).

Located 8km west of the mainstay T3 deposit, the higher-grade A4 discovery is being banked on to upscale Motheo from a 30,000tpa copper producer to 55,000tpa within 12-18 months of first T3 production in early 2023.

A4 currently stands as a 100,000t copper resource at an average grade of 1.5% with 24gpt silver.

There has been plenty of impressive copper drill results reported since from within and outside of the resource footprint, including some particularly high-grade localised zones associated with extensional veins situated below A4's shear-hosted mineralisation.

That all points to an upgrade in the global resource. But more important than that at this stage of Motheo's development is the extent to which the resource classification is upgraded to indicated status.

Assuming a high conversion rate, Sandfire's strategy of expanding processing rates at the Motheo processing "hub" from 3.2Mtpa to 5.2Mtpa to achieve the higher annual copper output of 55,000tpa becomes a live option.

It kind of matters to Sandfire's rating, as one of the go-to copper stocks on the ASX, that the higher annual production rate becomes a reality as soon as possible.

That's because its DeGrussa/Monty copper-gold mine in WA's Bryah Basin is due to be mined out in the third quarter of CY2022.

Assuming no new nearby or regional discoveries in the interim changes things, the 1.6Mtpa DeGrussa mill is to be recast as a gold operation, based initially on the Old Highway project, 23km to the south-east.

DeGrussa/Monty has been a fabulous operation for Sandfire and it is set to throw off a lot of cash before it is all said and done. But the company's long-term future as a copper producer is now based on the Kalahari copper belt, which spans both Botswana and Namibia.

The cash to generated from DeGrussa/Month before it comes to an end, along with Sandfire's $574 million cash position at the end of the June quarter, means the production void between the end to copper production in WA, and first production from Motheo, can be comfortably managed.

Read more at https://www.miningnews.net/barry-fitzgerald/opinion/1413775/sandfire%E2%80%99s-swing-from-wa-to-kalahari-copper

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