Shares in Sandfire Resources have jumped 22 cents after the company announced plans to increase the targeted design throughput rate for its proposed DeGrussa copper-gold processing facility from 1.0 million tonnes per annum to 1.5 Mtpa.
Shares in Sandfire Resources have jumped 22 cents after the company announced plans to increase the targeted design throughput rate for its proposed DeGrussa copper-gold processing facility from 1.0 million tonnes per annum to 1.5 Mtpa.
The decision follows the company's recent resource upgrade to 10.67 million tonnes at 5.6 per cent of copper, 1.9 grams per tonne of gold and 15 grams per tonne of silver.
At 11.15am Sandfire shares were trading at $8.02, up 2.82 per cent.
In a statement to the Australian Securities Exchange, Sandfire said that it is in the final stages of a Pre-Feasibility Study.
Sandfire's managing director, Karl Simich said that the company was aiming to move seamlessly into production next year to take full advantage of record copper prices and the robust outlook for the copper market.
He said the increased throughput is encouraging news for the company.
"This will have a number of very positive implications for the Project, including increased efficiency in utilisation of capital, lower unit operating costs and therefore increased operating margins and cash flow," he said.
See company statement below:
Sandfire Resources NL (ASX: SFR; "Sandfire") is pleased to provide an update on development activities at its 100%-owned DeGrussa Copper-Gold Project in Western Australia, including plans to increase the targeted design throughput rate for the processing facility from 1.0Mtpa to 1.5Mtpa.
This follows the recently announced Phase III resource upgrade to 10.67Mt @ 5.6% copper, 1.9g/t gold, 15g/t silver (containing 600,000t copper, 660,000oz gold, 5.1Moz silver) (see ASX Announcement - 3 September 2010) and other positive interim findings from the Pre-Feasibility Study.
The Company is currently in the final stages of a Pre-Feasibility Study which will transition seamlessly into a Definitive Feasibility Study (DFS) before the end of this year. Key recent highlights of the current development studies for the Project include:
An increase in the targeted throughput rate of the processing plant from 1.0Mtpa to 1.5Mtpa following the increased Phase III resource announced in early September and indications that a high resource/reserve conversion will be achieved. The upgraded throughput rate is expected to allow increased annual copper and gold production, further enhance the return on capital, reduce unit operating costs and increase operating margins and profitability;
Estimating Ore Reserves, which will be reported once final costings and data have been compiled for the underground mine designs;
Confirmation that the DeGrussa Project will have separate open pit and underground operations, with the initial open pit developed to extract the high-grade near surface chalcocite and oxide copper ore and the underground mine developed to extract the massive sulphide orebodies, DeGrussa, Conductor 1, Conductor 4 and Conductor 5;
Completion of open pit mine designs encompassing extraction of the direct shipping chalcocite material and stockpiling ROM (run-of-mine) grade material as future concentrator feed, with waste material to be incorporated into the tailings storage facility and ROM pad;
Completion of underground mine designs and scheduling covering the DeGrussa, Conductor 1, Conductor 4 and Conductor 5 deposits, including all decline, level and vertical development excavations. An underground portal location has been selected and final costings are now underway;
Favourable geotechnical and hydrological results which have been modelled from work carried out indicating that rock conditions underground will be favourable for underground mining. In situ stress measurements have confirmed a low stress environment;
Excellent results from ongoing metallurgical testwork, which has demonstrated good recoveries and the ability to produce concentrate grades of up to 27% Cu. The testwork has also confirmed low levels of arsenic and magnesium in concentrate, which should make DeGrussa concentrates highly marketable in the international concentrate market. The proposed plant layout is currently being finalised with design and flowsheets proceeding;
The recruitment of experienced personnel to fill a number of senior positions ahead of the completion of a Definitive Feasibility Study. These include the position of General Manager - DeGrussa, with several other key positions currently being advertised.
Other ongoing pre-development activities include:
Environmental studies and consultation with Government - which indicates that there are no barriers to development with formal submissions for environmental approval to be prepared in the current Quarter and a Mining Lease Application in progress;
Native title negotiations - which have proceeded cordially with final form agreements expected to be finalised in the near term;
Planning for early infrastructure works - which is proceeding well and, subject to statutory approvals, will allow mining and construction to proceed unimpeded; and
Transport studies - which are currently underway including meetings with the Ports of Geraldton and Port Hedland.
Preliminary capital and operating cost estimates are being prepared based on the process plant and infrastructure designs. A preliminary development schedule has been prepared which indicates that, subject to permitting, processing could commence during the third Quarter of calendar 2012 with first concentrate shipments late in that same Quarter.
The schedule anticipates commencement of pre-strip for the initial open pit to extract the direct shipping material commencing during the second Quarter of 2011, enabling first DSO to be extracted and shipped by late in the fourth Quarter of 2011. Development of the underground mine is targeted to commence in the second Quarter of 2011.
Other recent activities have included the acquisition of a 150-person accommodation village which has since been moved to site and is currently being stored ready for installation to support the commencement of surface infrastructure development early next year.
Sterilisation drilling is also underway to clear areas for other surface infrastructure including the concentrator, waste dump and tailings storage facility.
Sandfire's Managing Director, Mr Karl Simich, said significant progress had already made with pre-development activities at DeGrussa, with the Company aiming to move seamlessly into production next year to take full advantage of record copper prices and the robust outlook for the copper market.
"While we are continuing to focus considerable attention and resources on aggressive exploration within the 6km long near-mine corridor at DeGrussa, our development team has been doing excellent work in preparing the project for production - with open pit mining scheduled to commence as early as the second Quarter of next calendar year," Mr Simich said.
"The other important highlight of our recent work has been an increase in the targeted throughput rate for the proposed on-site concentrator from 1.0Mtpa to 1.5Mtpa. This will have a number of very positive implications for the Project, including increased efficiency in utilisation of capital, lower unit operating costs and therefore increased operating margins and cash flow," he added.
