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Sandfire announces Motheo Copper Project expansion DFS

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Global Mining Review,


Sandfire Resources Ltd has confirmed the planned expansion of its Motheo Copper Mine in Botswana from 3.2 million tpy to 5.2 million tpy following the completion of a positive definitive feasibility study (DFS), including the A4 Deposit and an expanded processing plant.

The total combined T3 and A4 JORC 2012 probable ore reserve estimate comprises 49.6 million t at 1% copper (Cu) and 14 g/t silver (Ag) for 474 000 t of contained copper metal and 21.3 million oz of contained silver.

Motheo Copper Project 5.2 million tpy expansion case DFS

Sandfire has completed a DFS for the Motheo expansion, including development of the A4 Deposit and an expansion of the Motheo processing plant. The DFS has confirmed the strong business case for development of the A4 Deposit, the first satellite deposit to the Motheo Copper Mine, as part of an expanded 5.2 million tpy Motheo Production Hub strategy.

In completing the DFS, Sandfire has been able to leverage off the work currently underway for the development and construction of the 3.2 million tpy Motheo Copper Mine and the prior work completed on the 3.2 million tpy DFS.

The expansion case DFS incorporates A4 and expanding plant production from 3.2 million tpy to 5.2 million tpy.

Mine facilities include surface mining operations at the A4 Deposit, expansion of the processing plant and supporting infrastructure. The recently completed Motheo mining accommodation facility at 752 rooms requires no expansion to accommodate additional manning numbers associated with mining at A4. New infrastructure for A4 includes a light vehicle access road from the already constructed access road, a dual lane HV haul road to be constructed from A4 to the Motheo processing plant, workshops, fuel, crib and office facilities, electrical and water supplies. Planning is well advanced for a 22 MW photovoltaic (PV) and battery energy storage system (BESS). The PV plant would be located next to the process plant, with the potential to supply up to 34% of the project’s future energy needs and will reduce its carbon dioxide (CO2) emissions by 475 000 t over the life of mine (LOM). The capital for the PV plant is currently not included in the LOM capital as firm pricing submissions are being sought.

Subject to the timing of the award of contracts, site construction activities for the process plant expansion are scheduled to commence in the March quarter of FY23. Design work for the plant expansion has commenced and the delivery to site of the 4.5 MW ball mill has also commenced. No other long-lead delivery equipment is required for the plant expansion. Following process plant expansion construction and commissioning works, increased plant throughput at 5.2 million tpy is expected to commence in the March quarter of FY24.

Ore feed for the expanded plant will be from additional T3 Deposit stockpiles until first ore deliveries from A4 commence in the December quarter of FY25.

Mining pre-strip at A4 is anticipated to commence in the December/March quarter of FY24, subject to the approval of the environmental-social impact assessment (ESIA) and granting of the mining licence for A4. Formal submission of the ESIA to the Department of Environmental Affairs (DEA) is planned for the December quarter of FY23, with approvals anticipated in the June quarter of FY23.

The project’s economics are robust and have withstood the significant increases currently seen in input pricing for mining costs, diesel supply, reagents, grinding media and labour.

The estimated operating cost for the combined 5.2 million tpy T3 and A4 operation varies throughout the LOM as changes occur in the cost to mine and process the deposits. The average operating cash cost (C1) over the life-of-mine, on a payable copper basis, is estimated to be approximately US$1.47/lb Cu. C1 consists of US$0.84/lb mining costs, US$0.56/lb processing cost inclusive of power, site administration and offsite logistics costs of US$0.23/lb, US$0.19/lb treatment and refining charges, and a silver by-product credit of US$0.35/lb Cu. The estimated all-in sustaining cost (AISC), which includes C1 plus sustaining capital, is US$1.79/lb.

Total development capital estimated at US$397.4 million incorporates future development costs for the A4 Opencast and 5.2 million tpy plant expansion of US$47.9 million and the US$29.5 million increase in capital cost forecast for the 3.2 million tpy project disclosed in the company’s June 2022 quarterly report. LOM capital is estimated at US$499 million. As at 31 July 2022, the company had invested US$185.4 million (47%) of the US$397.4 million development capital.

Sandfire intends to fund the development of the 5.2 million tpy expansion through a combination of cash and project debt. The company has obtained credit approval for a US$140 million project debt facility from a syndicate of banks.

The Government of Botswana has a right to acquire up to a 15% fully contributing interest in the A4 Deposit executed at the granting of the mining licence. The Government of Botswana did not take up the interest in the initial 3.2 million tpy T3 development.

Planning for the work programmes to support the 5.2 million tpy Motheo expansion implementation phase are well underway, with significant work already progressed on areas such as environmental approvals, process plant design, dewatering bore drilling and 4.5 MW ball mill manufacture and delivery.

Key critical path items for the 5.2 million tpy expansion have been identified as the ESIA and Mining Licence approvals, with both of these items being actively progressed. The DEA has recently approved the Environmental scoping document and the terms of reference allowing the full ESIA to be submitted in the coming weeks.

Motheo Copper Mine development update

Site activities are progressing well with the 752-person permanent village complete, 9200 m3 (95%) of process plant structural concrete poured, 950 t (72%) of structural steel erected and the 132 kV transmission line nearing completion. Earthworks and lining of the tailing storage facility (TSF) is progressing and all site construction contracts for the 3.2 million tpy development have been awarded.

Sandfire’s Managing Director and CEO, Karl Simich, said the decision to commit to an expansion of the Motheo Copper Mine following completion of the 5.2 million tpy expansion case DFS marked another important milestone in the company’s plans to establish a major new long-term copper mining hub in the Kalahari Copper Belt.

“The DFS has confirmed the robust economics of the expanded project and provides a clear pathway for us to move ahead with an immediate expansion of the 3.2 million tpy project.

“With construction activity well advanced, the 3.2 million tpy project is on schedule for completion in the March quarter of FY23, with first concentrate expected in the June quarter of FY23, allowing the expansion project to ramp up immediately following receipt of environmental and mining approvals.

“The international team that is delivering the 3.2 million tpy project will seamlessly transition across to the 5.2 million tpy development project, including A4 mining development and process plant expansion.

“In parallel with this development, we are also continuing a major exploration campaign both in the near-mine area as well as across our extensive landholding in the Kalahari Copper Belt aimed at defining additional ore sources that can feed into our expanded processing hub at Motheo or support the development of new production centres across the region.”

Read the article online at: https://www.globalminingreview.com/exploration-development/31082022/sandfire-announces-motheo-copper-project-expansion-dfs/

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African mining news Copper mining news