Sandfire Resources has announced another resource upgrade for its DeGrussa Copper-Gold project near Meekatharra.
Sandfire Resources has announced another resource upgrade for its DeGrussa Copper-Gold project near Meekatharra.
Sandfire said the inclusion of the Conductor 5 resource deposit for the first time increased the copper-gold resource to 10.7mt, grading copper at 5.6 per cent, gold at 1.9 grams per tonne and silver at 15 grams per tonne.
This represents a 13 per cent increase compared with the July 2010 Phase II resource of 9.62 million tonnes grading 5.5 per cent copper, 1.8gpt gold and 14gpt silver.
Sandfire said its resource at the project had jumped to 600,000 tonnes of copper and 600,000 ounces of gold.
See company statement below:
Sandfire Resources NL (ASX: SFR; "Sandfire") is pleased to report a further increase in the JORC compliant Mineral Resource inventory for its 100%-owned DeGrussa Copper-Gold Project in Western Australia to 10.67 million tonnes grading 5.6% copper, 1.9g/t gold and 15g/t silver following completion of the maiden JORC resource estimate for the Conductor 5 deposit.
The initial Conductor 5 resource, which was prepared by Perth-based independent consultants McDonald Speijers, comprises an Inferred Resource of 1.05 million tonnes grading 6.4% copper, 3.0g/t gold and 21g/t silver, which is estimated to contain 67,000 tonnes of copper metal, 101,000 ounces of gold and 0.7Moz of silver.
Conductor 5, which is located 900m north-east of DeGrussa, was discovered in June 2010. The maiden Conductor 5 resource adds to the Phase II resource estimated by Coffey Mining Pty Ltd announced on 19 July 2010. As a result, Sandfire has prepared a Phase III JORC compliant Mineral Resource inventory for the DeGrussa Project comprising Indicated and Inferred Resources (see Appendix 1).
The Phase III resource is estimated to contain a total of 600,000 tonnes of copper metal, 660,000 ounces of gold and 5.1 million ounces of silver.
This represents a 13% increase compared with the July 2010 Phase II resource of 9.62 million tonnes grading 5.5% copper, 1.8g/t gold and 14g/t silver. It is the third successive JORC resource statement for the DeGrussa Project since its discovery in April 2009, highlighting the substantial exploration upside within the DeGrussa mineral system.
The overall estimate of contained copper metal at DeGrussa has grown by 61% since the February 2010 JORC Mineral Resource (7.13Mt containing 372,000t of copper) while the overall resource tonnage has increased by 50%. The overall copper grade of the resource inventory has also continued to increase steadily, with the Phase III resource reflecting the inclusion of a maiden resource for the exceptionally high-grade Conductor 5 deposit.
Direct Shipping Material
Within the previously announced Indicated Resource of 250,000 tonnes grading 17.6% Cu, 2.6g/t Au and 21g/t Ag for the DeGrussa Supergene Chalcocite zone, which lies directly above the main DeGrussa deposit, preliminary open pit optimisations and design scheduling has indicated a component of direct shipping material comprising:
DeGrussa Direct Shipping Material: 151,000 tonnes @ 25.6% Cu, 2.6g/t Au, 21g/t Ag
This material comprises predominantly chalcocite (with minor chalcopyrite) copper sulphide mineralisation suitable for early extraction by open pit before mining of the primary sulphide deposits commences, with the potential to yield early cash flow from the Project from 39,000 tonnes of contained copper. The open pit is planned to extend to a depth of approximately 140m below surface and, in addition to the direct shipping material, provide approximately 500,000 tonnes of massive sulphide copper mineralisation for early mill feed.
This material, which comprises both primary chalcopyrite and lower grade chalcocitic mineralisation, will be stockpiled as future feed for the commencement of processing. This will facilitate a rapid ramp-up of the mill to full design capacity as underground production is developed.
It is envisaged that the direct shipping material will be extracted in the early stages of development of the DeGrussa Project and has the potential to realise valuable early cash flow while the primary deposits are developed and surface infrastructure and processing facilities are constructed.
Other products from the open pit will include oxide gold and silver mineralisation in a generally siliceous cap-rock and oxide copper mineralisation. The oxide (carbonate) copper mineralisation was reported as part of the Phase II JORC compliant resource estimate (see ASX Announcement - 19 July 2010), comprising an Inferred Resource of 100,000 tonnes grading 8.8% Cu, 2.2g/t Au and 11g/t Ag.
Since the Phase II announcement, Sandfire has completed a Reverse Circulation drilling program to quantify the oxide copper mineralisation including a "dispersion" plume away from the top of the primary mineralisation. Full assay results for the copper mineralised intersections are awaited and Sandfire expects to increase this oxide copper resource. The erratic distribution of the oxide gold cap precludes the calculation of a JORC compliant resource at this time.
Development Update
Scoping Studies and preliminary work leading to a Definitive Feasibility Study for the DeGrussa Project is continuing with key activities currently underway including:
Metallurgical test work - proceeding successfully, aimed at optimising recoveries and concentrate grades;
Environmental studies and consultation with Government - indicates that there are no barriers to development with formal submissions for environmental approval to be prepared in the current Quarter;
Underground mine designs - currently being updated to incorporate the Phase II resource increase announced in July and Conductor 5;
Geotechnical investigations - indicate the in-situ stress regime to be benign and rock strength to be generally good;
Open pit mine design - to be undertaken in the next few weeks to take account of extraction of the direct shipping material and stockpiling material as future concentrator feed;
Native title negotiations - have proceeded cordially with final form agreements expected to be finalised in the near term; and
Planning for early infrastructure works - proceeding well and, subject to statutory approvals, will allow mining and construction to proceed unimpeded.
Exploration Update & Outlook
Three diamond drilling rigs and one Reverse Circulation (RC) drill rig are currently operating at the DeGrussa Project. Diamond drilling has recently commenced at two priority EM targets to the south-west of DeGrussa which were identified from the airborne VTEM survey and verified by subsequent ground EM surveys.
A high-powered 200amp deep-penetrating ground EM survey is currently underway within the 6km priority mine corridor to the north-east and south-west of the DeGrussa Project. High-powered down-hole EM surveys (DHEM) will also be undertaken on a fence of deep diamond drilling holes completed within this corridor.
The Company has an outstanding pipeline of upcoming exploration targets within this corridor, including four new IP targets and several new EM conductors generated from recent work. Drilling of these priority targets is anticipated to commence in the near future.
