PERTH (miningweekly.com) – Copper/gold miner Sandfire Resources on Thursday told shareholders that the September quarter will go down as a defining period for the company, as it advances its acquisition of the Matsa mining complex, in Spain, and advances its operations in Botswana.

“It is extremely rare to find a base metals asset that offers Matsa’s compelling combination of scale, grade, mine life and exploration upside, and I am delighted that we have been able to move so quickly and decisively to complete the acquisition and lock in the required debt and equity funding,” said Sandfire MD and CEO Karl Simich.

“This has been ranked as the largest all-cash deal ever done by an Australian miner, and it is a real credit to everyone involved, our senior management team, advisers, the investors who underpinned the capital raising and the bankers who are providing the debt, that we have been able to be successful in a highly competitive bidding process.”

Sandfire earlier this year struck a A$2.57-billion deal to purchase the Matsa operation, which is a large, high-quality, long-life underground copper operation in Spain, which comprises three mining operations feeding a 4.7-million-tonne-a-year central processing facility, producing between 100 000 t/y and 120 000 t/y of copper equivalent.

As part of the transaction, Sandfire will retain a life-of-mine concentrate offtake agreement with commodity trader Trafigura for all of the production from Matsa.

With the acquisition, Sandfire’s pro-forma group production for the 2022 financial year is targeted at between 170 000 t and 194 000 t, confirming Sandfire as one of Australia’s largest copper-focused producers.

“The quality and uniqueness of this asset is reflected in the calibre of the investors and banks who are supporting us. We are looking forward to providing the market with further information on the huge potential that we see at Matsa as we move closer to completing the acquisition,” Simich said on Thursday.

He noted that following the Matsa transaction, Sandfire retained a balance sheet to continue to develop the Motheo copper mine in Botswana and progress its global exploration initiatives.

“On that front, the September quarter has seen exciting progress in Botswana, with construction of the Motheo mine ramping up, the delivery of a maiden ore reserve for the satellite A4 deposit and the completion of a positive prefeasibility study (PFS) for the 5.2-million-tonne-a-year ‘expansion case’ at Motheo.

“The PFS indicated that an expanded 5.2-million-tonne-a-year project development would deliver a positive uplift in the project’s overall economic credentials, including an 88% increase in pre-tax net cash flow to $1.24-billion.

“Given these positive results, Sandfire will proceed immediately to a definitive feasibility study (DFS) for the 5.2-million-tonne-a-year expansion case, with the intention of blending high-grade ore from the A4 openpit with baseload feed from the T3 openpit. The DFS work is already well advanced, and we expect to announce the details of the DFS in the first quarter of the 2022 calendar year. We also delivered some exciting exploration news from Botswana during the quarter, with step-out drilling at the A4 deposit highlighting the untapped potential in the broader Kalahari copper belt,” said Simich.

“All of this has been achieved against the backdrop of another period of strong performance from the DeGrussa copper/gold mine, which delivered another solid production and cost performance in line with guidance and continues to deliver outstanding operating margins.”

DeGrussa produced 15 946 t of copper and 7 515 oz of gold during the three months to September, at a C1 cost of $1.13/lb. This was down from the 18 252 t of copper and 9 016 oz of gold produced in the June quarter, as the operation continued to progress towards the end of its mine life.

For the full 2022, Sandfire has set a production target of between 64 000 t and 68 000 t of copper, and betweeen 30 000 oz and 34 000 oz of gold, at a C1 cost of between $1/lb and $1.10/lb.