SANDFIRE Resources expected to make an investment call on the T3 copper and silver project in Botswana by the middle of next year, said MD Karl Simich following completion of a A$167m all share takeover of MOD Resources, the project owner.
“By combining the expertise and experience of both management teams with Sandfire’s financial strength and focusing our joint resources on the development and financing of the priority T3 Project, we expect to be able to advance this high-quality project to a decision to mine by mid-CY2020,” he said.
Simich was commenting in notes to Sandfire’s September quarter numbers, bringing a close to the firm’s financial year, in which it posted attributable net profit of A$106.5m for the 12 months. It paid a 16 Australian cents per share dividend, payable November 29.
The company is guiding to copper production of between 70,000 and 72,000 tons of copper for the 2020 financial year.
Simich said the company had hired Ian Kerr, previously a non-executive director at West African Resources, as project director for T3. The plan now is to complete a feasibility study and win regulatory approvals for the project. Sandfire would also press on with exploration drilling of the site.
Commenting on the acquisition in June, Simich said it ticked “… all of our boxes from an acquisition criteria perspective and is value-accretive based on the T3 asset alone which, importantly can be funded out of cash flow”.
MOD Resources said in April that in its feasibility study, it found T3 could produce 27,000 tonnes a year of copper, peaking at 30,000 tonnes/year.
Botswana is known for its diamond industry, but the southern African government has long made known its intentions to diversify its economy.
In February, Khoemacau Copper Mining, a subsidiary of US-based, Cupric Canyon Capital, said it had secured $565m in debt as well as royalty funding for construction of a mine that is scoped to produce some 3.6 million tonnes of copper in its first phase from 2021. This development also included smelting facilities.
