Sandfire outlines Motheo expansion

WA’s Sandfire Resources has detailed plans to expand its Motheo project in Botswana via a 114,000-tonne satellite deposit.

Sandfire says the results of a pre-feasibility study for its A4 deposit have outlined the potential for an expanded mining operation at Motheo, with a plant production rate of 5.2 million tonnes per annum.

That compares to the 3.2mtpa base case announced to the ASX in December.

The PFS revealed a 41 per cent ncrease in pre-production capital to $504 million to include development costs associated with the A4 open pit, as well as an updated cost forecast for the Motheo plant to account for “increased steel costs, foreign exchange movements and COVID-related disruptions”.

Meanwhile, Motheo’s pre-tax net present value increased from $457 million to $937 million and all-in sustaining costs improved to $US1.56 per pound.

The PFS also revealed an 88 per cent increase in pre-tax net cashflow to $1.7 billion.

Motheo is now expected to produce as much as 60,000tpa over a 10.5-year period compared with a base case operation of 30,000tpa over 12.5 years.

Sandfire managing director Karl Simich said the company was planning to blend ore from the A4 open pit with feed from Motheo’s T3 deposit.

He said Sandfire would now move to complete a definitive feasibility study for the expanded project, expected within the first three months of 2022.

“We have already identified several opportunities to enhance the economic outcomes of the PFS, particularly in the area of mine scheduling,” Mr Simich said.

“At the moment, the new mine schedules for both T3 and A4 open pits have been optimised separately, however we believe we can deliver enhanced outcomes in the DFS by combining and optimising the two pits with an integrated mine sequence.”

He said the company continued to drill nearby targets within its Kalahari Copper Belt landholding.

Its T3 and A4 deposits are also estimated to hold 15.6moz and 6.6moz of contained silver.

Sandfire, which runs the DeGrussa operations in WA, gained the Motheo project through its acquisition of MOD Resources in 2019.

The company's shares closed up 2.6 per cent on the ASX to trade at $6.22.