Sandfire looking at starting enlarged Motheo

Sandfire at the end of last year 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 mine life of 12.5 years.

The base case operation would require a capital investment of $259-million.

However, Simich on Wednesday 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 at around April of 2023, and I think we will be there for many, many decades to come.”

Sandfire this week reported record sales revenues of A$813-million in the 2021 financial year, compared with the A$656.8-million reported in the 2020 financial year, with payable metal sales decreasing from 69 593 t of copper to 65 689 t of copper, and from 40 004 oz of gold to 37 394 oz of gold.

Cash flows from operating activities increased from the A$273.6-million reported in the last financial year, to A$471.1-million, while net profits 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 that looking to the year ahead, production is 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.”