Backed by a strong operational base and a clear strategy to grow into an international diversified and sustainable mining company, Australian mining and exploration group Sandfire Resources has grown from strength to strength.
Sandfire’s business is underpinned by a demonstrated commitment to the highest standards of safety, responsibility and sustainability, which has been recognised through receipt of numerous local, national and international Awards, including Prospectors of the Year; Best Australian Explorer; Developer of the Year; Hard Rock Mine of the Year; and in 2019, the Golden Gecko Award for Environmental Excellence.
Sandfire operates the high-margin DeGrussa Copper-Gold Mine, located 900km north of Perth in WA, which produces high-quality copper-in-concentrate with significant gold credits.
In addition to delivering strong financial returns to shareholders, the cash flows generated from the DeGrussa Operations have been the backbone of a successful exploration and business development program, delivering a global project development pipeline that spans the world’s major continental zones: Asia-Pacific (APAC), Europe, Middle-East and Africa (EMEA), and the Americas (AMER).
Sandfire’s investment criteria is to seek assets that are:
- Value-accretive
- Capable of delivering production of +30ktpa copper equivalent within five years
- Mine life of more than five years
- Direct cost of production in the bottom half of the global cost curve (C1)
- Have exploration potential
- Within the company’s funding capability
DeGrussa Operations
The DeGrussa Operation includes both the DeGrussa and Monty Copper-Gold Mines, two of the Asia-Pacific region’s premier, high-grade copper mines.
Starting with an initial two-year open pit mining operation which was completed in April 2013, the DeGrussa Operation is based on long-term underground mining delivering sulphide ore to an on-site 1.5mtpa concentrator.
Construction and development of the project was completed on time and on budget during 2012 at a total cost of about $400m. DeGrussa’s remarkable progress from discovery in April 2009 through resource drill-out, feasibility, financing and construction and development – just over three years from discovery drill-hole to first production – set new benchmarks for the efficient development of resources in WA.
The DeGrussa underground mine plan comprises nearly 40km of lateral development, allowing for the simultaneous extraction of ore from multiple faces, on multiple lenses.
Having four deposits gives Sandfire a strategic advantage from an underground mining perspective – providing production flexibility and enabling it to maintain consistent ore production of 1.5mtpa through the decline.
In addition to the 1.5mtpa concentrator, other infrastructure and services on site include a Tailings Storage Facility (TSF), power station, paste plant for the underground mine, a sealed airstrip capable of accommodating small jets, a state-of-the-art 400-room mine village, a mobile phone service and fibre optic communications, office buildings, assay laboratory and sealed access roads.
Production from the ultra-high-grade Monty satellite underground mine (discovered in 2015) commenced in 2019, with ore trucked 14km by road to the concentrator for processing.
Ore is then trucked to both Port Hedland and Geraldton for shipping to our global network of customers.
Today, the DeGrussa and Monty mining operations provide employment for a total workforce of about 450 staff and contractors.
- Production achieved for FY2020
The DeGrussa Operations achieved total production of 72,238t of contained copper and 42,263oz of contained gold at a cash cost of US$0.72/lb Cu.
The C1 cost represents the direct cost of production, at site level, per unit of output.
Production Updates
The company produced 16,803t of copper for the March quarter, an increase of 413t on last quarter, while gold production fell 560oz to 9100.
Copper guidance remains at 67,000-70,000t and gold production is expected to meet the guidance range of 36,000-40,000oz.
Sandfire managing director and chief executive Karl Simich said it was an exciting time to be part of the strong copper resurgence.
“The March Quarter has delivered exciting progress for Sandfire on a number of fronts, against the backdrop of continued strength in the copper price and a robust outlook for copper,” Mr Simich said.
“In Australia, our DeGrussa Operations delivered another quarter of strong copper and gold production, putting us on track for the upper end of our 2021 financial year guidance band.
“We were able to take full advantage of the healthy copper price environment, with copper hitting a 10-year high of $US9,550 ($12,294) per tonne in late February.”
Along with the strong production rates, Sandfire was able to achieve a copper recovery rate of 93.3% at its DeGrussa mill.
Sustainability Snapshot
The DeGrussa Solar Farm is the largest integrated off-grid solar and battery storage facility in Australia and reportedly the world.
Built in 2016, the facility comprises 34,080 solar photo-voltaic panels and generates about 21GWh per annum for use by the DeGrussa and Monty Copper-Gold Mines (17-20% of total power requirement).
Since commencement, the solar farm has reduced Sandfire’s carbon emissions by 30,789t and offset 11m litres of diesel. This represents a significant environmental saving.
In addition to the environmental benefits, the DeGrussa Solar Farm has provided a blueprint for the adoption of renewable energy at mine sites and remote communities around the world.
The project has been visited by mining companies and government representatives as well as universities and schools, and has been widely showcased as a case study on how to integrate renewable energy at a mine site.
In 2019, Sandfire was awarded the coveted Golden Gecko by the WA Department of Mines, Industry Regulation and Safety for Environmental Excellence in recognition of the Solar Farm.
The Golden Gecko recognises leading practice and innovation in environmental management and the Awards provide an opportunity to share experiences between industry, government and the community.
Mr Simich said the company had maintained its focus on ESG performance during the year.
“A key achievement was refining our sustainability strategy, a move that will further ensure ESG is embedded across all facets of the
Organisation,” he said.
“Our new sustainability strategy, based on the business plan, incorporates the collective input from our senior leaders and our external stakeholders.
“It reflects a comprehensive, long-term plan that will facilitate our move to an international, multi-asset base and precious metals producer.
“Our sustainability targets have been publically reported since 2016. This demonstrates our commitment to transparency, improves our ability to manage risk, and ensures we continue to improve our ESG performance.
“In 2019, we performed well against our targets to invest in long-term community partnerships, improve female representation and facilitate regional economic development. We will continue to strive in our endeavours to achieve our goals.”
Doolgunna Exploration
Sandfire also holds a dominant ground position in the emerging Doolgunna Volcanogenic Massive Sulphide (VMS) province in the Bryah Basin region of Western Australia (WA), which now stands at 7,189km2 and includes the company’s DeGrussa and Monty copper-gold mining operations.
This landholding includes both 100%-owned tenements, as well as land held under farm-in and Joint Venture agreements.
Since discovering DeGrussa, Sandfire has remained steadfast in its conviction that the Doolgunna region has the potential to yield multiple further high-grade ore discoveries and has invested substantially to build its extensive tenement holding.
The company’s geological team, assisted by some of the world’s leading independent geological consultants, has confirmed that DeGrussa is a VMS deposit.
It is well-established that this style of mineralisation generally forms in clusters and that VMS fields typically contain many clusters of deposits – often with resources totalling 40-50mt across the field or, in some cases, super-giant fields containing 100-200mt and more.
Much of this stratigraphy is obscured beneath transported alluvium and requires systematic aircore (AC) drilling to test the bedrock geochemistry and identify prospective areas.
Sandfire owns the only operating base metals processing plant in the region (the DeGrussa concentrator), putting the company in an outstanding position to capitalise on new discoveries.
The exploration strategy for the Doolgunna-Bryah Basin region has been developed and enhanced over a number of years as Sandfire progressively refines its understanding of the intricacies of exploration in the district, underpinned by a $20-$25m annual exploration budget.
