Company describes Kgalagadi as “a new global copper province”
Sandfire Resources has decided to go ahead with commercial development of the T3 Motheo Copper-Silver project in the Kahalari Copper Belt of Botswana after approving a $US259 million investment, a statement released by the company recently says.
According to the Australian mining and exploration company, their final investment decision (FID) is based on the positive results of a definitive feasibility study (DFS) on an initial Base Case 3.2Mtpa processing capacity and open pit development of the T3 deposit.
“The DFS outlines a robust initial 12.5-year operation, underpinned by an updated ore reserve of 39.9Mt at 0.9% Cu and 12.2g/t Ag for 360,000t of contained copper and 15.6Moz of contained silver, producing on average ~30kt of contained copper and 1.2Moz of contained silver per annum over the first 10 years of operations, with relatively low capital intensity and robust operating margins,” the company stated.
The company added that based on a forecast copper price of US$3.16/lb (reflecting current long-term consensus pricing) the Base Case 3.2Mtpa project is forecast to generate US$664 million ($A948 million) in pre-tax free cash-flow and US$987 million (A$1,410 million) in EBITDA (Earnings Before Interest, Tax, Depreciation and Amortization), at a forecast all-in sustaining cost of US$1.76/lb over its first 10 years of operations.
“The capital expenditure estimate of US$259 million (A$371 million) includes mining pre-strip, process plant construction, site infrastructure development, tailings storage, owner’s costs and contingency,” the company said.
Sandfire also highlighted that in reflecting its confidence in the future long-term growth of the Motheo Project, Sandfire’s Board has also approved an additional upfront investment of US$20 million (A$28 million) to be made as part of the 3.2Mtpa Base Case development.
Sandfire Managing Director (MD), who is also the Chief Executive Officer (CEO), Karl Simich, said the decision to proceed with the million dollar investment in a new, long-life copper production hub in Botswana marked a pivotal moment in the company’s transformation into a global, diversified and sustainable mining company.
“This is an exciting step for our shareholders, employees and contractors, strategic partners and other key stakeholders and, of course, for the communities in the Ghanzi region where we operate and the nation of Botswana,” he said.
Simich said the company’s investment is the dawn of a new global copper province – “as evidenced by the scale of the new underground mining operation currently being constructed immediately to the north-east of our project by Cupric Canyon Capital at their Khoemacau Project”.