PERTH (miningweekly.com) – Copper miner Sandfire Resources has reported record sales revenue for the 2022 financial year, while also announcing positive results for a definitive feasibility study (DFS) into expansion plans at its Motheo copper project, in Botswana.

Sandfire on Tuesday reported record sales revenues of A$922.7-million for the full year ended June, up from the A$609-million achieved in the previous corresponding period, with copper sales increasing from 65 689 t to 93 827 t.

Gold sales declined slightly in the same period from 37 394 oz to 28 618 oz, while silver sales rose from 311 000 oz to 952 000 oz. Additionally, 32 328 t of zinc and 3 312 t of lead were also sold in the full year.

Group earnings before interest, taxes, depreciation and amortisation were reported at A$447.3-million, while net profits after tax attributable to shareholders reached A$111.4-million.

Sandfire told shareholders that the combination of an initial five-month contribution from the newly acquired MATSA copper operations, in Spain, and another strong performance by the DeGrussa operation, in Western Australia, had underpinned the 52% increase in sales revenue.

Sandfire CEO and MD Karl Simich said the 2022 financial year marked one of the most successful and important periods in the company’s history, rivalled only by the initial discovery and development of the DeGrussa deposit in Western Australia.

“The momentous achievements of the past 12 months have fundamentally changed the face of Sandfire and set the scene for our next decade of growth. Our vision to create a diversified, international and sustainable mining company rapidly took shape during the year, dominated by the transformational $1.865-billion acquisition of the MATSA copper operations in south-western Spain, announced in September 2021 and completed in February 2022.

“The fact that we were able to transact on a rare base metal asset of this scale and quality, raise A$1.248 billion in equity and $795.5-million in debt to complete the deal, and then seamlessly integrate it into our business, are incredible achievements,” said Simich.

“The MATSA acquisition has transformed our portfolio and, together with the exceptional progress we made during the year in constructing the new Motheo copper mine in Botswana, has provided the elements for what has arguably been our best-ever year as a business.”

Simich noted that the DeGrussa copper operations were now moving into their final months of operations, having delivered another year of strong and safe production in 2022, with copper and gold production in line with guidance.

Processing at DeGrussa is scheduled to complete in October 2022, with a detailed plan for ramp-down and mine closure in place, supported by retention programmes for staff.

Simich noted that in Botswana, Sandfire was making strong progress towards the development of the Motheo copper mine, where construction and development activities were well advanced and the company remained on track to deliver first production from the initial 3.2-million-tonne-a-year project in the June 2023 quarter.

“We are also pleased to have released the DFS for the Motheo expansion project today, which will see the project capacity increased to 5.2-million tonnes a year and peak production of around 55 000 t/y of copper-in-concentrate.”

The DFS has estimated total development capital of $397-million for the expanded case at Motheo, which includes the development cost of the A4 openpit and the 5.2-million-tonne-a-year plant expansion of $47.9-million.

The expanded project, which will see mining at both the T3 and A4 deposits, will have a projected pre-tax net present value of $548-million and an internal rate of return of 29%, using a copper price of $3.57/lb and a silver price of $20/oz.

The DFS estimated a ten-year life-of-mine (LoM), with peak production reaching 55 000 t/y of copper in concentrate, while the LoM production is estimated at 440 000 t of copper and 18.4-million ounces of silver, at an all-in sustaining cost of $1.79/lb.

Simich said the decision to commit to an expansion of the Motheo copper mine following completion of the expansion case DFS marked another important milestone in the company’s plans to establish a major new long-term copper mining hub in the Kalahari Copper Belt.

“The DFS has confirmed the robust economics of the expanded project and provides a clear pathway for us to move ahead with an immediate expansion of the 3.2-million-tonne-a-year project. With construction activity well advanced, the 3.2-million-tonne-a-year project is on schedule for completion in the March quarter of 2023, with first concentrate expected in the June quarter of 2023, allowing the expansion project to ramp up immediately following receipt of environmental and mining approvals.

“The international team that is delivering the 3.2-million-tonne-a-year project will seamlessly transition across to the 5.2-million-tonne-a-year development project, including A4 mining development and process plant expansion.

“In parallel with this development, we are also continuing a major exploration campaign both in the near-mine area as well as across our extensive landholding in the Kalahari Copper Belt aimed at defining additional ore sources that can feed into our expanded processing hub at Motheo or support the development of new production centres across the region,” Simich said.