SELF DIS­COV­ERY

As de­vel­op­ment of the Monty de­posit con­tin­ues to sched­ule, Sand­fire Re­sources is mak­ing moves to un­lock the full po­ten­tial of the Greater Dool­gunna ore­body.

The Australian Mining Review - - SANDFIRE RESOURCES - CAMERON DRUM­MOND

‘EX­PLO­RATION and ex­pan­sion’ has been Sand­fire Re­sources’ mantra in 2017 against the backdrop of a very healthy cop­per mar­ket.

As the Monty de­vel­op­ment (Spring­field JV) pro­gresses, a key fo­cus for Sand­fire has been in­tense, multi-pronged drilling pro­grams around its Greater Dool­gunna pro­ject and the Spring­field JV which cov­ers 5846 square km.

A farm-in agree­ment be­tween Sand­fire and En­ter­prise Met­als was also signed in Oc­to­ber for En­ter­prise’s en­tire Dool­gunna pro­ject area.

After spend­ing $1.5 mil­lion drilling in the area, Sand­fire can sole fund ex­plo­ration and earn a 75 per cent in­ter­est in the pro­ject by dis­cov­er­ing and defin­ing min­eral re­sources of at least 50,000 tonnes (t) cop­per metal or equiv­a­lent.

Sand­fire wasted no time, com­plet­ing 1481 drill holes for 125,672m in En­ter­prise ten­e­ments by the start of Novem­ber.

The miner said it would con­tinue its ma­jor 600-hole AC drilling pro­gram at the farm-in pro­ject to test 50 strike kilo­me­tres of the in­ter­preted favourable vol­cano-sed­i­men­tary se­quence which hosts the DeGrussa and Monty cop­per-gold de­posits.

“We are very pleased that Sand­fire is con­tin­u­ing to un­der­take a thor­ough and sys­tem­atic ex­plo­ration pro­gram in En­ter­prise’s Dool­gunna Pro­ject area,” En­ter­prise managing director Der­mot Ryan said.

“We are look­ing for­ward to the re­sults of Sand­fire’s ex­ten­sive geo­phys­i­cal sur­veys and drilling pro­grams.”

Sand­fire said it would also con­tinue with in­ten­sive drilling pro­grams at its own Dool­gunna ten­e­ments, with ex­plo­ration fo­cused along the highly prospec­tive VMS cor­ri­dor that hosts both the DeGrussa and Monty de­posits.

Monty de­vel­op­ment

Dis­cov­ered in 2016, the Monty cop­per-gold de­posit is the cen­tral fo­cus of Sand­fire’s 70 per cent owned Spring­field joint ven­ture (JV) with Tal­is­man Min­ing (30 per cent).

A fea­si­bil­ity study con­ducted in early 2017 out­lined a 70,000t of cop­per, 21,000 ounces (oz) of gold and 288,000oz of sil­ver op­er­a­tion with a three-year pro­duc­tion life. An in­vest­ment de­ci­sion was quickly made to go ahead at a cap­i­tal cost of $90m.

Dur­ing the year the pro­ject has pro­gressed on sched­ule, with the com­ple­tion of haul and ac­cess roads, ex­ca­va­tion of the box cut for un­der­ground ac­cess, and the com­mence­ment of the de­cline, stock­pile and lay­down area pads and in­fra­struc­ture works.

Cut­ting of the de­cline por­tal for the new un­der­ground mine was ex­pected to com­mence this month, and un­der­ground de­vel­op­ment was ex­pected to take about one year, with first ore sched­uled for Q2 FY19.

Sand­fire’s ex­plo­ration and dis­cov­ery strat­egy also in­cluded the test­ing var­i­ous new ge­o­log­i­cal in­ter­pre­ta­tions at Monty NE, Monty East and Homer South, along with geo­chem­i­cal anom­alies iden­ti­fied within the South­ern Vol­canics.

In fact, its De­cem­ber quar­ter ex­plo­ration bud­get would fo­cus pre­dom­i­nantly on Spring­field.

The planned work con­tin­ues from the pre­vi­ous quar­ter, which was pri­mar­ily fo­cused on de­tailed ge­o­log­i­cal re­views, and the in­ter­pre­ta­tion and as­sess­ment of In­duced Po­lar­i­sa­tion (IP) geo­phys­i­cal data col­lected over the Monty and Monty NE ar­eas.

“Joint ven­ture ex­plo­ration ef­forts con­tinue to re-eval­u­ate and rein­ter­pret ge­o­log­i­cal, geo­chem­i­cal and geo­phys­i­cal data on an on­go­ing and it­er­a­tive ba­sis to max­imise dis­cov­ery op­por­tu­ni­ties within the Spring­field area,” Mr Simich said.

Pro­duc­tion

After prov­ing up re­sources dur­ing the year, Sand­fire re­leased its min­eral resource and re­serve es­ti­mate for its as­sets.

Re­sources across the DeGrussa, Monty, Black Butte, Thaduna, Green Dragon and Temora projects were es­ti­mated to con­tain a to­tal of 1.9mt of cop­per, 2.7moz of gold and 15.8moz of sil­ver.

DeGrussa and Monty ac­counted for group re­serves of 9.5mt at for 372,000t of cop­per, 439,000oz of gold and 5,941,000oz of sil­ver.

Pro­duc­tion FY17 was at the up­per end of guid­ance at 67,088t of cop­per and 38,623oz of gold, slightly down on FY16 fig­ures of 68,202t of cop­per and 37,612oz of gold.

Dur­ing the Septem­ber quar­ter, pro­duc­tion was sourced from all lenses at DeGrussa, amount­ing to 437,136 tonnes grad­ing at 3.79 per cent cop­per.

Cop­per pro­duc­tion was 15,258t ( June Quar­ter: 17,092t), and C1 cash op­er­at­ing costs for the quar­ter were $US0.95/lb, in line with pre­vi­ous quar­ter lev­els.

Tar­geted cop­per pro­duc­tion for FY18 re­mained un­changed, with pro­duc­tion ex­pected to be in the range of be­tween 63,000t and 66,000t of con­tained cop­per metal, and be­tween 35,000oz and 38,000oz of gold.

C1 cash op­er­at­ing costs were ex­pected to be within the range of $US1.00-1.05/lb; at the lower end of the nor­mal op­er­at­ing range due to high gold pro­duc­tion and in­creas­ing gold price as­sisted by-prod­uct credits, offset in part by a strength­en­ing Australian dol­lar.

Mr Simich said Sand­fire would con­tinue its ex­plo­ration and ex­pan­sion strate­gies into 2018.

“With many an­a­lysts pre­dict­ing strong long-term fun­da­men­tals for the cop­per mar­ket over the com­ing years, Sand­fire is ex­cep­tion­ally well placed to de­liver growth, lever­ag­ing from the com­pany’s high grade, high qual­ity min­ing op­er­a­tion at DeGrussa; a new ul­tra-high grade mine com­ing on stream at Monty; out­stand­ing ex­plo­ration up­side in the world-class Dool­gunna VMS dis­trict; and a growth pipe­line in­clud­ing the Black Butte de­posit and other emerg­ing op­por­tu­ni­ties on the East Coast of Aus­tralia,” he said.

“With many an­a­lysts pre­dict­ing strong long-term fun­da­men­tals for the cop­per mar­ket over the com­ing years, Sand­fire is ex­cep­tion­ally well placed to de­liver growth.”

Im­ages: Sand­fire Re­sources.

Ex­plo­ration drilling at Greater Dool­gunna.

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