West Perth-based Sandfire Resources says it is on track to commence construction and development of the DeGrussa Copper-Gold Project near Meekatharra after announcing a significant resource upgrade.
West Perth-based Sandfire Resources says it is on track to commence construction and development of the DeGrussa Copper-Gold Project near Meekatharra after announcing a significant resource upgrade.
In a statement to the Australian Securities Exchange, Sandfire said the metal inventory at the DeGrussa deposit had increased from 644,000 tonnes of copper and 724,000 ounces of gold.
The updated oxide copper resources, now comprises a measured and indicated resource of 3.6 million tonnes grading 1.2 per cent copper and 0.5 grams per tonne gold which is estimated to contain 44,000 tonnes of copper metal and 57,000 ounces of gold.
"These significant developments position the Company to advance rapidly and seamlessly towards development and mining at DeGrussa next year," the statement said.
Sandfire expects to complete its Definitive Feasibility Study for the project in the first quarter of 2011.
See company statement below:
Sandfire Resources NL (ASX: SFR; "Sandfire") is pleased to report that it is on track to commence construction and development of its 100%-owned DeGrussa Copper-Gold Project in WA in the first half of next year after reporting a substantial increase in the near-surface oxide copper resource, receiving a Notice of Intention to Grant the Mining Lease for the Project and awarding a key development contract.
These significant developments position the Company to advance rapidly and seamlessly towardsdevelopment and mining at DeGrussa next year.
Increase in Oxide Copper Resource
Since the announcement of the Phase III resource (10.67Mt grading 5.6% Cu, 1.9g/t Au and 15g/t Ag) in September, Sandfire has completed an in-fill Reverse Circulation drilling program on a 20m by 20m spacing to more accurately quantify the oxide copper mineralisation within the proposed open pit, including a "dispersion" plume away from the top of the primary sulphide lodes.
The updated oxide copper resource, which was prepared by Perth-based independent consultants McDonald Speijers based on a 0.25% Cu cut-off grade, now comprises a Measured and Indicated Resource of 3.6 million tonnes grading 1.2% copper and 0.5g/t gold which is estimated to contain 44,000t of copper metal and 57,000oz of gold.
This represents a substantial increase compared with the DeGrussa oxide copper resource reported as part of the Phase III resource announcement of 100,000 tonnes grading 8.8g/t copper, 2.2g/t gold and 11g/t silver containing an estimated 8,000 tonnes of contained copper, 7,000 ounces of gold and 33,000 ounces of silver (see ASX Announcement of 3 September 2010 - "DeGrussa Resource Jumps to 600,000t of Copper").
Metallurgical test work including bottle roll tests is already well advanced to investigate potential treatment options for this oxide material, which is likely to be processed using heap leach or vat leach methods. Further information will be provided once results are received from this testwork.
The initial open pit (see Figure 2) is planned to extend to a depth of approximately 140m below surface and will extract the oxide copper material, the previously quantified direct shipping chalcocite material (151,000 tonnes @ 25.6% Cu, 2.6g/t Au and 21g/t) as well as approximately 500,000 tonnes of massive sulphide copper mineralisation to be stockpiled as early mill feed for the concentrator.
In addition, McDonald Speijers has estimated a Measured Resource of 140,000 tonnes grading 1.5g/t gold containing 7,000 ounces of gold in a zone of near-surface auriferous laterite located above the oxide copper and primary sulphide resources (shown in yellow on Figure 2 attached).
With the exception of these two components, a review of the overall DeGrussa JORC Mineral Resource undertaken by McDonald Speijers has not resulted in any other material changes from the previously reported Phase III Measured, Indicated and Inferred Resource as reported on 3 September 2010 of 10.67Mt grading 5.6% copper, 1.9g/t gold and 15g/t silver for 600,000 tonnes of contained copper, 660,000 ounces of gold and 5.06 million ounces of silver.
However, the increase in the oxide copper resource has resulted in a net increase in the overall metal inventory at DeGrussa to 644,000 tonnes of copper and 724,000 ounces of gold. The oxide copper material and lateritic gold will be recovered in the first two years of the operation and represents a net addition to the DeGrussa mining inventory.
Notice of Intention to Grant Mining Lease
Sandfire has received a Notice of Intention to grant the DeGrussa Mining Lease M52/1046 from the Western Australian Department of Minerals and Petroleum. The Mining Lease covers all four VMS copper deposits discovered to date as well as the proposed 1.5Mtpa treatment facility, accommodation village and other supporting infrastructure.
The grant of the Mining Lease is expected to be effected shortly by the Western Australian Minister for Mines and Petroleum, marking a significant step towards development and production at DeGrussa. The imminent granting of the Mining Lease follows extensive discussions and negotiations and the recent signing of a Land Access Agreement with the Yugunga Nya Native Title claimant group.
The grant of the Mining Lease will allow the Company to proceed with its various environmental approval applications which have been in preparation for several months. Consultation with officers of the Department of Minerals and Petroleum and other departments has not indicated any barriers to those approvals being granted in due course and on schedule.
In the immediate term, the Department will be asked to rapidly assess a submission for the Company's construction and permanent accommodation facility on site so that this important work can proceed early in 2011. Sandfire has recently awarded a Project Management and Design of Early Works Contract for the DeGrussa Project to Mintrex, a Western Australian-based engineering company.
These early works include:
- Infrastructure for construction
- Access roads
- Plant site bulk earthworks
- Concrete supply
- Preparation of tenders for construction of the plant and airstrip
- Submission of tenders for long-lead equipment items to key suppliers
These activities will ensure that, at the conclusion of the Definitive Feasibility Study (DFS) for the DeGrussa Project in the first Quarter (Q1) of 2011, the project development will be in a position to proceed to full construction, subject to finance, without delay. Sandfire's development timetable envisages completion of DFS in Q1 of 2011, commencement of the open pit pre-strip, plant construction and underground development in Q2 and commencement of Direct Shipping Material ("DSO") production in Q4 of 2011.
Sandfire's Managing Director, Mr Karl Simich, said the expected grant of the Mining Lease represented a major milestone for the Company, coming just 18 months after the discovery of the high-grade DeGrussa Project.
"This is a fantastic outcome which reflects the focus, determination and resolve with which we are approaching the development of the DeGrussa Project," Mr Simich said. "We have taken the Project rapidly to a stage where development is poised to commence early next year, and we are now in a very strong position to proceed with that development as we complete the recently announced $102 million capital raising.
"The substantial increase in the oxide copper resource is also a great result and will be mined during the first year of mining at DeGrussa. The benefits of this resource will become clear as we complete metallurgical test work to determine the optimum recovery method as part of the Definitive Feasibility Study. The open pit material can be accessed quickly and will generate important early cash flow at a very early stage in the operation," Mr Simich added.
