Mining lease approval for DeGrussa

Sandfire Resources hopes to start mining at its DeGrussa copper-gold project near Meekatharra next year after the Department of Mines and Petroleum approved a mining lease for the project.

The lease covers all four high-grade VMS copper deposits, and a 1.5 million tonne per annum treatment facility, accommodation village and other supporting infrastructure.

In a statement to the Australian Security Exchange, Sandfire said the mining lease approval was a major milestone for the company as it moved towards production.

Sandfire said it was on track to complete a Definitive Feasibility Study, start underground mining and start a pre-strip of the DeGrussa open cut in the second quarter of 2011.

Sandfire also hopes to commence construction of the processing plant and associated infrastructure in the same period.

The West Perth-based company expects to commence production of first Direct Shipping Material from the open pit in the fourth quarter of 2011.

"This is a fantastic early Christmas present for our team which brings the year to a suitably upbeat and forward-looking conclusion," said Sandfire managing director Karl Simich.

"During 2010, we have delivered four successive JORC resource statements at DeGrussa, increasing our resource inventory to 644,000 tonnes of copper and 724,000 ounces of gold, commenced a Definitive Feasibility Study and pre-development activities, secured two key Land Access Agreements with native title groups and now secured the Mining Lease to enable project development to proceed," he said.

"We have also raised over $170 million in equity capital and increased our market capitalisation beyond $1 billion, putting us in a very strong position to become Australia's next copper-gold producer.

"I would like to take this opportunity to congratulate our team for this extraordinary effort as we gear up for a significant year of delivery in 2011."