Motheo Copper Mine

Motheo Copper Mine

Sandfire’s Motheo Copper Mine is centred on development of the T3 Deposit. The T3 Deposit is a significant sediment-hosted copper and silver deposit, located in the Kalahari Copper Belt in Botswana.

The Project is held through in-country subsidiary Tshukudu Metals Botswana (Pty) Ltd and was acquired through Sandfire’s acquisition of MOD Resources Ltd in October 2019.

Sandfire completed a positive Definitive Feasibility Study (DFS) in December 2020 on an initial Base Case 3.2Mtpa processing capacity and open pit development of the T3 Deposit.

Based on the results of the DFS, Sandfire’s Board approved the mine development, with construction commencing in 2021 and first production scheduled for the calendar year of 2023.

The DFS outlined a robust initial 12.5-year operation, underpinned by an updated Ore Reserve of 39.9Mt at 0.9% Cu and 12.2g/t Ag for 360,000t of contained copper and 15.6Moz of contained silver, producing on average ~30kt of contained copper and 1.2Moz of contained silver per annum over the first 10 years of operations, with relatively low capital intensity and robust operating margins.

Regional Location Plan with Sandfire licence holdings showing T3 Deposit, A4 Dome and multiple exploration targets.

Based on a forecast copper price of US$3.16/lb (reflecting long-term consensus pricing at the time the feasibility study was completed) the Base Case 3.2Mtpa project is forecast to generate US$664 million (AU$948 million) in pre-tax free cash-flow and US$987 million (AU$1,410 million) in EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation), at a forecast all-in sustaining cost of US$1.76/lb over its first 10 years of operations.

Since the completion of the study, the average long-term broker price forecast for copper has increased to US$3.43/lb and the current spot price for copper is in excess of US$4.00/lb.

The capital expenditure estimate of US$259 million (AU$371 million) includes mining pre-strip, process plant construction, site infrastructure development, tailings storage, owner’s costs and contingency.

Reflecting its confidence in the future long-term growth of our operations in Botswana, Sandfire’s Board has also approved an additional upfront investment of US$20 million (AU$28 million) to be made as part of the 3.2Mtpa Base Case development.

This will facilitate the installation of additional processing capacity and infrastructure, providing a clear pathway to rapidly expand the processing facility to a planned 5.2Mtpa production rate.

The immediate and most advanced expansion opportunity for the expanded 5.2Mtpa Motheo Copper Mine is the A4 deposit, located 8km west from T3. The A4 deposit hosts an Inferred Mineral Resource of 6.5Mt at 1.5% Cu for 100,000t of contained copper, with both in-fill and step-out drilling underway to upgrade the Inferred Mineral Resource to Indicated status and underpin the completion of Pre-Feasibility and Engineering Studies.

Read the full ASX announcement on the Definitive Feasibility Study for the Motheo-T3 Copper Project here.

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