Sandfire secures mining licence for Motheo Copper Mine

Initial site works at Motheo commenced earlier this year, with sterilisation drilling, a 15 km access road and construction of a 200-person camp already well advanced. Following the award of the mining licence, Sandfire will now mobilise additional personnel to site to commence construction of the process plant and other infrastructure. Orders have already been placed for all key process equipment and long-lead items.

Sandfire recently announced the award of the mining contract for the T3 pit to African Mining Services (AMS), the surface mining business of diversified global mining services group Perenti Global Ltd, with the award of the mining licence satisfying one of the two key conditions required to finalise the contract.

The T3-Motheo definitive feasibility study, completed in December 2020, confirmed strong economic and technical outcomes from an initial Base Case 3.2 million tpy processing capacity and opencast development of the T3 Deposit.

The DFS outlined a robust initial 12.5-year operation, producing on average 30 000 t of contained copper and 1.2 million oz/y of contained silver over the first 10 years of operations, with relatively low capital intensity and robust operating margins.

The T3-Motheo DFS was based on a forecast copper price of US$3.16/lb reflecting long-term consensus pricing at the time the feasibility study was completed. The Base Case 3.2 million tpy project development was projected to generate US$664 million (AUS$867 million) in pre-tax free cashflow and US$987 million (AUS$1 289 million) in EBITDA, at a forecast all-in sustaining cost of US$1.76/lb over its first 10 years of operations. Since the completion of the study, the average long-term broker price for copper is around US$4.30/lb.

As part of the mining licence approval process, the government of Botswana has a right to acquire up to a 15% fully contributing interest in the T3-Motheo Project. The government of Botswana has not yet notified Sandfire of its intention regarding the acquisition of an ownership stake.

The Motheo Copper Mine will be developed over a 2-year period, with mining to commence in early 2022 and commissioning and ramp-up scheduled for early 2023.

Sandfire is also working towards completion of an updated mineral resource for the A4 deposit, which is expected to be completed in the coming weeks. This will underpin a feasibility study on the development of this satellite deposit, which forms a key part of the company’s strategy to rapidly expand production at the Motheo Production Hub from the Base Case 3.2 million tpy to 5.2 million tpy.

Sandfire’s Managing Director and CEO, Karl Simich, said the award of the Mining Licence represented a major milestone that would see a significant increase in construction and development activities on site.

“We are absolutely delighted to now be in a position to move to full-scale construction at Motheo, with our construction crews expected to mobilise to site over the next few days.

“I would like to thank the Government of Botswana for their support throughout the approvals process, which will see Motheo come on-stream in 2023 as one of very few new copper mines commencing production globally.

“Motheo is expected to generate approximately 1000 jobs during construction and 600 full-time jobs during operations, and represents the foundation for Sandfire’s long-term growth plans in Botswana. Our vision is that Motheo will form the centre of a new, long-life copper production hub in in the central portion of the world-class Kalahari Copper Belt, where we hold an extensive ground-holding spanning Botswana and Namibia.

“Sandfire is looking forward to becoming a major long-term player in the Kalahari Copper Belt, which represents one of the last under-explored large-scale copper provinces anywhere in the world,” he said.

Read the article online at: https://www.globalminingreview.com/finance-business/08072021/sandfire-secures-mining-licence-for-motheo-copper-mine/