Sandfire Resources NL (ASX: SFR) has announced an updated Ore Reserve and Mineral Resource for the DeGrussa Copper-Gold Operation in Western Australia.
The update includes the Monty Mine as well as the DeGrussa, Conductor 1, Conductor 4, and Conductor 5 deposits at the DeGrussa Mine.
The company reported the updated Underground Ore Reserve for DeGrussa and Monty Mines to be 5.5Mt grading 4.8% Cu and 1.6g/t Au for 264,000t of contained copper and 277,000oz of contained gold.
Meanwhile, the updated Underground Mineral Resource for DeGrussa and Monty Mines is reported to be 4.9Mt grading 6.3% Cu and 2.0g/t Au for 306,000t of contained copper and 313,000oz of contained gold.
Sandfire’s MD Karl Simich said that the updated DeGrussa Ore Reserves reflected a net increase in underground Ore Reserves after mining depletion, underpinning a mine life which now extends into mid-CY2022.
DeGrussa copper-gold mine
The DeGrussa Copper-Gold Mine is located 900km north-east of Perth in Western Australia. It is one of the Asia-Pacific region’s premier, high-grade copper mines.
There are four deposits at DeGrussa Mine. They are, DeGrussa, Conductor 1, Conductor 4, and Conductor 5 deposits.
Meanwhile, Monty prospect forms part of the area covered by Sandfire’s farm-in with Talisman Mining. Sandfire owns 100% of Monty following the acquisition of the 30% interest held by Talisman Mining Limited in the Springfield Exploration and Mining Joint Ventures.
Increase in underground ore reserve
The company announced that the DeGrussa Ore Reserve has been updated based on the December 2018 Mineral Resource model, annual mining depletion, and revision to modifying factors.
Sandfire said that the successful resource definition drilling campaign during CY2018 provided the basis for an increase in the Mineral Resource in Conductor 5. The company said that a part of this has been successfully converted to Ore Reserves and forms part of the current mine life.
However, Sandfire noted that the DeGrussa underground mine Ore Reserve has been reduced by approximately 1.2Mt and 71,000t of contained copper based on mining depletion, revision to modifying factors, and an updated Mineral Resource model.
The company said that resource definition drilling in Conductor 5 and subsequent orebody remodelling in conjunction with a revision to modifying factors has resulted in a net overall increase in underground Ore Reserves of 0.4Mt and 2,000t of contained copper.
It may be noted that the Ore Reserves for Monty remain unchanged, as no material mining depletion has occurred at Monty up to 31 December 2018.
The company announced that the Updated Underground Ore Reserve for DeGrussa and Monty Mines (including stockpiles) is 5.5 Mt grading 4.8% Copper and 1.6 g/t gold for 264,000 tonnes of contained copper and 277,000 oz of contained gold.
Sandfire announced that the mine life is now supported through to mid-CY2022 after accounting for annual mining depletion of approximately 1.6Mt, due to the extension of Conductor 5 Mineral Resource and subsequent conversion to Ore Reserves.
Updated UG ore reserves support operations strategy
The DeGrussa processing plant has a capacity of 1.6Mtpa. The mining operations strategy adopted for the DeGrussa and Monty operations requires DeGrussa to supplement production from Monty.
The company noted that the updated underground Ore Reserves continues to support this strategy with DeGrussa mine production reducing to between 1.2Mtpa and 1.3Mtpa and mine production from the Monty Mine filling the mill capacity.
Increase in underground mineral resource
The company said that the updated DeGrussa Mineral Resource is based on mining depletion, sterilization, and resource definition drilling.
Interestingly, the resource definition drilling program completed during CY2018 has provided the basis to vertically extend the Conductor 5 Mineral Resource along the Shiraz Fault. This, in turn, has contributed to an increase in the Mineral Resource.
The company reported that the updated Underground Mineral Resource for DeGrussa and Monty Mines is 4.9Mt grading 6.3% Copper and 2.0g/t Gold for 306,000t of contained copper and 313,000oz of contained gold.
Sandfire said that the grade control drilling is ongoing at Monty with three underground (UG) diamond drill rigs currently operating.
The company reported that the Mineral Resources and Ore Reserves will be updated in the second half of CY2019 to incorporate these results.
The company also reported that vigorous exploration programs continue at Doolgunna project with extensive programs of AC, RC and diamond drilling continuing to test the prospective stratigraphy for mineralisation. Routine testing of geochemical and geophysical anomalism is also ongoing.
Sandfire’s Managing Director, Mr. Karl Simich, said: “This is a positive outcome which reflects our continued success in replacing Ore Reserves and identifying extensions of some of the key VMS lenses at DeGrussa.
Our exploration effort also continues unabated, with extensive programs of air-core, RC and diamond drilling currently underway across our expanded footprint across the Greater Doolgunna District.
Meanwhile, with the successful recent introduction of high-grade ore from the Monty Mine, we are expecting a strong finish to FY2019, with copper production tracking to hit or exceed the upper end of our guidance range at 68,000t of contained copper. As Monty mining rates continue to ramp up into next year we will see the head grade increase and further boost copper production and cash flow.”