Exploration drilling at Greater Doolgunna. All images: Sandfire Resources.
BY CAMERON DRUMMOND
AS development of the Monty deposit continues to schedule, Sandfire Resources is making moves to unlock the full potential of the Greater Doolgunna orebody.
‘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 $1.5m 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.
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 $90 million.
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.
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.