Sandfire Resources NL (ASX:SFR) (OTCMKTS:SFRRF) has secured a Mining Licence for its Motheo Copper Mine in Botswana.
The licence is the last major permitting milestone is required for full-scale construction of the A$364 million project.
Preliminary site works at Motheo started earlier this year, with sterilisation drilling, a 15-kilometre access road and construction of a 200-person camp already well underway.
Sandfire will now mobilise additional personnel to the site to commence construction of the process plant and other infrastructure, while orders have already been placed for all key process equipment and long-lead items.
“A major milestone”
Sandfire managing director and CEO Karl Simich said: “The award of the Mining Licence represented a major milestone that would see a significant increase in construction and development activities on site.
“We are absolutely delighted to now be in a position to move to full-scale construction at Motheo, with our construction crews expected to mobilise to site over the next few days.
“I would like to thank the Government of Botswana for their support throughout the approvals process, which will see Motheo come on-stream in 2023 as one of very few new copper mines commencing production globally.”
Strong economic and technical outcomes
Sandfire awarded the mining contract for the T3 pit to African Mining Services (AMS), the surface mining subsidiary of diversified global mining services group Perenti Global Ltd (ASX:PRN).
A definitive feasibility study (DFS) for T3-Motheo was completed in December 2020, confirming strong economic and technical outcomes from an initial base case of 3.2 million tonnes per annum processing capacity and open pit development of the T3 Deposit.
The DFS outlined a robust initial 12.5-year operation, producing on average 30,000 tonnes of contained copper and 1.2 million ounces of contained silver per annum over the first 10 years of operations, with relatively low capital intensity and robust operating margins.
The study was based on a forecast copper price of US$3.16 per pound reflecting long-term consensus pricing at the time the feasibility study was completed.
However, since the completion of the study, the average long-term broker price forecast for copper has increased to US$3.43 per pound and the current spot price for copper is around US$4.30 per pound.
Strategy to rapidly expand production
Sandfire aims to begin mining in early 2022 with plant commissioning and ramp-up scheduled for early 2023.
The company is also working towards the completion of an updated mineral resource for the A4 deposit, which is expected to be completed in the coming weeks.
This will underpin a feasibility study on the development of this satellite deposit, which forms a key part of the company’s strategy to rapidly expand production at the Motheo Production Hub from the annual base case of 3.2 million to 5.2 million tonnes.
As part of the Mining Licence approval process, the Government of Botswana has a right to acquire up to a 15% fully contributing interest in the T3-Motheo Project. The Government has not yet notified Sandfire of its intention regarding the acquisition of an ownership stake.
“Sandfire’s long-term growth plans”
Simich adds: “Motheo is expected to generate approximately 1,000 jobs during construction and 600 full-time jobs during operations and represents the foundation for Sandfire’s long-term growth plans in Botswana.
“Our vision is that Motheo will form the centre of a new, long-life copper production hub in the central portion of the world-class Kalahari Copper Belt, where we hold an extensive ground-holding spanning Botswana and Namibia.
“Sandfire is looking forward to becoming a major long-term player in the Kalahari Copper Belt, which represents one of the last under-explored large-scale copper provinces anywhere in the world.”
- Ephrems Joseph