Wednesday, August 31st, 2022
Construction of the Motheo copper mine, in Botswana, is continuing on time, with construction costs only slightly higher than anticipated.
Speaking at the first day of Paydirt’s Africa Downunder conference, in Perth, Sandfire Resources MD and CEO Karl Simich said that construction costs for the first stage of the operation had only increased by around 10%, which Simich said was “relatively insignificant in the environment that we’re in”.
The 3.2-million tonne a year Motheo copper project is expected to deliver its first production in the June quarter of next year, and Simich noted that construction activities were well advanced with over 1 700 personnel on site.
Sandfire earlier this week unveiled the results of a definitive feasibility study (DFS) to expand Motheo, while the project was still in construction. The company has taken the decision to increase production to 5.2-million tonnes, allowing for peak production to reach 55 000 t/y of copper in concentrate.
The DFS estimated a 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, would 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, with peak production reaching 55 000 t/y of copper in concentrate, while the life-of-mine 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.
Sandfire intends to fund the development of the Motheo copper mine through a combination of cash and project debt.
Simich told delegates at the Africa Downunder conference that Sandfire is also looking to grow the Motheo mine-life beyond its current ten year operating life, and would spend some $15-million on exploration at Motheo.