Tag Archives: Sandfire Resources

Perenti books exploration, development and production work with Australian miners

Perenti says it has secured new work and contract extensions with the likes of Regis Resources, BHP Mitsubishi Alliance (BMA) and Catalyst Metal in Australia representing nearly A$150 million ($97 million) of revenue across its 2024 and 2025 financial years.

It has booked a A$70 million, six-month contract for the continuation of underground development and production works at the Regis Resources Garden Well and Rosemont underground gold mines. Barminco and Regis continue to progress collaboratively towards further and material contract extensions at these two mines, it says.

It has also sealed a A$27 million, 24-month contract for exploration surface drilling services at the BHP Mitsubishi Alliance in Queensland, while a A$14 million, 24-month contract has been awarded for underground diamond drilling works at Catalyst Metal’s Plutonic underground gold mine in Western Australia, subject to finalisation of contract terms.

Furthermore, AUMS (through UMA, a joint venture with Rocksure International) received a limited notice to proceed related to the initial underground development works at the Newmont Akyem underground gold mine in Ghana. The finalisation of contractual negotiations continues, however, once finalised it is forecast that the contract could represent circa-A$32 million of revenue over an initial term of 11 months, with a capital structure that is likely to be similar to that adopted for Newmont’s Subika project.

Mark Norwell, Managing Director & Chief Executive Officer of Perenti, said: “The award of these contracts and the limited notice to proceed across both our underground and surface mining businesses demonstrates the diversity of our service offering and the strength of the relationships we share with our clients. Collectively these three contracts and the limited notice to proceed represent nearly A$150 million of revenue across FY2024 and into FY2025 and come after the recent announcement in which Perenti secured circa-A$360 million of revenue at the Sandfire Resources A4 project in Botswana.”

Perenti’s AMS to add A4 open pit services to Sandfire Motheo copper mine contract mining works

Perenti Limited’s surface mining business in Africa, African Mining Services (AMS), has been awarded the contract for open-pit mining services at the Sandfire Resources A4 open pit within the larger Motheo copper mine in Ghanzi, Botswana.

The contract is valued at $235 million over a term of 73 months.

Under the terms of the contract, AMS will deliver all surface mining services associated with development and production activities at the A4 open pit.

The A4 open pit is located around 8 km to the west of Sandfire’s existing T3 open pit, where AMS has successfully progressed from development into production works. Perenti anticipates A4 pre-production and development work to commence in September 2023, with pre-strip mining to start in October 2023.

The T3 and A4 open pits are expected to be operated as a larger, integrated mining operation and, therefore, will leverage the resulting benefits of scale and the operational synergies to optimise the return on capital aligned with our financial targets. The primary synergies include the optimisation of existing infrastructure, mining equipment, maintenance facilities and both technical and operational management.

Mark Norwell, Managing Director & Chief Executive Officer of Perenti, said: “We are excited about the opportunity to expand our partnership with Sandfire Resources. Motheo is a long-life asset in the Kalahari Copper belt, and
the expansion of our role here is in keeping with our strategy of disciplined growth within top-tier mining jurisdictions with high quality partners. Sandfire is now one of our largest clients and over the term of the combined contracts, the T3 and A4 open pits are expected to generate total revenue of over A$1.1 billion, delivering strong returns for Perenti and its shareholders.”

Paul Muller, President of Contract Mining, said: “Since Barminco commenced operations in 2019 and AMS later in 2021, Perenti has established itself as the leading international mining contractor in the Kalahari Copper belt. With the award of our third mine in the region, we look forward to playing our part in Sandfire’s expansion of their world-class Motheo copper mine. Beyond this, I am proud of the contribution Barminco, AMS and Perenti continue to make to the development of Botswana’s mining industry and the community more broadly.”

The Electric Mine Consortium and EPCA to run Cat 777 electric truck trial

The Electric Mine Consortium is looking to bridge the gap between the testing of electrified ultra-class haul trucks and continued rollout across industry of battery-electric underground trucks with a project to develop and trial a retrofitted 100-ton (91 t) haul truck as part of its consortium work in Australia.

It has teamed up with Electric Power Conversions Australia (EPCA), an Indigenous electric battery conversion company in Australia, to run a Caterpillar 777 haul truck electric vehicle demonstrator project.

The consortium explained: “The Electric Mine Consortium are focused across all fleet sizes when it comes to electrification. In our recent work, we have uncovered that in the area of larger surface in-pit trucks, there are some trials underway, however there is a lack of focus on the smaller trucks. Making sure we understand and trial electric technologies in smaller fleets is important to our members, and we were recently presented with an opportunity to do so by Electric Power Conversions Australia, an Indigenous electric battery conversion company in Australia.”

The conversion of the vehicle – one of the most commonly used surface trucks across the Tier 2 and Tier 3 mining company market, according to the consortium – will see the 750 kW diesel motor switched out with a 1,000 kW electric motor and 2 MWh of batteries, according to Clayton Franklin, founder and CEO of EPCA.

Franklin said he was expecting this configuration to allow for an eight-hour average run time, providing 30% more power than the diesel equivalent and the ability to move material quicker. He also predicted a 50% reduction in total cost of ownership on the battery-converted truck when compared with the diesel truck.

EPCA was founded in 2021 with the vision of providing a practical solution to the growing environmental impact of the Australian mining industry. Franklin himself was the lead engineer on a 220-t hydrogen-battery hybrid mining truck and also for an Epiroc D65 drill rig that was electrified.

The Electric Mine Consortium is a growing group of leading mining and service companies. These companies are driven by the imperative to accelerate progress towards the fully electrified zero CO2 and zero particulates mine. Mining companies Gold Fields, South32, OZ Minerals, IGO Ltd, Evolution Mining, Iluka Resources, MMG and Sandfire Resources are among the participants.

In the short time since the establishment, the consortium’s membership has grown almost two-fold, with over 40 ongoing equipment trials in 15 different locations having been mobilised.

Caterpillar, Barloworld, AMS and Sandfire collaborate at Motheo in Botswana

When Sandfire Resources produces the first ore from its new Motheo copper mine in Botswana, southern Africa, later this year, the company will officially be on its way to developing a long-life copper production hub in the central portion of the Kalahari Copper Belt of Botswana and Namibia.

That first ore from Motheo is just the beginning of the company’s long-term growth plans in the region. Before the development of the mine was even completed, Sandfire had already announced plans to enlarge the operation by exploiting an additional deposit and building an expanded processing plant to handle production.

Recognizing the potential of the Kalahari Copper Belt, Sandfire and its chosen operations partner for Motheo — Perenti Group’s African Mining Services (AMS) — made a commitment to the highest standards of productivity, safety, responsibility and sustainability.

A critical contributor to meeting that commitment will be the use of mining technology. And key partners in that effort will be Caterpillar and Cat® dealer Barloworld Equipment, who are working with Perenti/AMS to provide a suite of technology solutions that will deliver innovation to the mining operation.

Crew with mining truck

“We know that Sandfire Resources, our customer Perenti, and the entire team at Motheo is committed to using technology to build the safest, most productive operation possible,” Nathan Wescombe, a Senior Account Manager at Caterpillar, said. “We’re proud that Perenti has chosen Cat technologies to help them become the operator of choice within the region and deliver innovation to their mining practices.”

To ensure the successful deployment of technology in an area of the world where mining technology is not the norm, Caterpillar conducted a three-day information-gathering and change management workshop to consult with key stakeholders to help ensure they are technology-ready.

“Change management is a key to the implementation of technology in any operation,” Leslie Fengu, a Senior Regional representative for Caterpillar’s Mining Technology Solutions division, said. “And it’s even more critical in an area where it’s being introduced for the first time. Fortunately, Caterpillar has a team that has plenty of experience in helping our customers manage this change – understanding the challenges, developing possible solutions to address them, and providing ongoing support through implementation and beyond.”

Held in August 2022, the workshop was very well attended, met with positive feedback, provided critical knowledge of the operation, and identified opportunities moving forward to ensure success for all stakeholders, according to Caterpillar.

Greg Lawson, a General Manager at Perenti/AMS, said: “Incorporating technology into our operations is an important piece of our global strategy. Having the support of Caterpillar and Barloworld as we implement these solutions in a new region is proving to be instrumental in helping us realise our goals. We appreciate the value of their expertise not only in the technology itself but also in addressing the significant change management that goes along with its implementation.”

The Motheo copper mine

Motheo Copper Mine is located in the Kalahari Copper Belt, a major zone of strata-bound copper-silver deposits extending for 1,000 km along the northern margin of the Kalahari Craton in Namibia and Botswana.

The greenfield project is being developed by owner Sandfire Resources, an Australia-based mining and exploration company with a global presence. Open-pit mining services are provided by contractor AMS, the Africa-based surface mining arm of Perenti Group, a global mining services company also based in Australia.

Motheo represents the foundation for Sandfire’s long-term growth plans in Botswana and is expected to generate approximately 1,000 jobs during construction and 600 full-time jobs when fully operational.

After a positive feasibility study in December 2020, Sandfire’s board approved the development of Motheo. The feasibility study identified a robust initial 12.5-year operation with annual production of high-quality copper concentrate estimated at 3.2 Mt. Site construction commenced in 2021, with first production scheduled for mid-2023.

The Motheo Copper Mine will be based on an open-pit operation for the original deposit, identified as T3. The drill-and-blast operation will focus on 10-m benches, using suitable blasting methods to minimise dilution. Trucks will be loaded by 250-t excavators. Direct run-of-mine ore will be delivered directly to the crusher or placed on stockpiles for future rehandling.

AMS selected a fleet of Cat trucks to handle hauling duties, supported by a variety of other Cat machines. Barloworld recently delivered 20 139 t Cat 785 trucks, four D10T dozers, two 777 water trucks and two 18 motor graders to the mine.

Beyond the quality expected from the Cat machines, a major factor in the equipment purchase was related to the Cat MineStar™ technology products that accompany them. AMS, Caterpillar says, selected three separate but integrated solutions that will impact the efficiency and production of the operation, the uptime of machines and the safety of its people:

  • MineStar Edge™, a cloud-based equipment management and production recording platform that provides access to highly accurate production data and gives visibility to the entire mining operation;
  • Health – Equipment insights, a user-friendly data visualisation and reporting tool that allows sites to easily access, view and analyse machine health information and gain insights to help reduce unplanned downtime and prevent failures; and
  • Cat Driver Safety System, an in-cab detection technology that can help sites identify operator fatigue and distraction and address it in real time.

Introducing technology in Botswana

Sandfire and Perenti are no strangers to mining technology. Sandfire’s DeGrussa copper-gold mine in Australia was an early adopter of autonomous mining, using Cat MineStar Command for underground to automate a fleet of underground loaders. The Perenti Group, too, recognises the value of technology in mining, and has added a dedicated services and products business to its portfolio to provide technology and consulting services to the mining industry.

But bringing a technology mindset to this region is not business as usual. For Caterpillar, this is just the third such implementation in southern Africa and the first in Botswana. Cross-departmental interconnectedness is paramount for Perenti and AMS to realise its return on investment as the Motheo team strives to deliver on business demands, Fengu, whose knowledge of the region and its history are extremely valuable to technology implementation in Botswana, said.

“Disruptive technologies, such as those chosen by AMS, require a site-wide approach to achieve successful implementation and sustainable operations,” he said. “Supervisors and their teams are required to effectively manage the implementation and functional changes that will be required with technology, adapting staffed conventional mining techniques to get the most value out of the new mining system.”

To ensure the success of these systems in a country where they have not operated previously, Caterpillar identified an opportunity to leverage the knowledge and capability of its Cat Solutions & Services team, as well as other Cat and Barloworld technology experts. The initiative was led by Caterpillar Technology Change Enablement Manager, Brett Haskins, working with Joel Patterson and Jenny Krasny as key consultants.

“We organised a workshop to develop a deeper understanding of how we could assist in this change, walk through opportunities to help them become more comfortable with the technology and better appreciate how it can help support their roles in the operation,” Wescombe said.

Understanding the site and its culture

This workshop included site observations, interviews, education and facilitated discussions designed to understand the current culture – with a lens toward building operational readiness to capitalise upon the benefits that MineStar Solutions can provide.

The visit occurred over three days with a high level of engagement from every area and level of the deployment. The visit was designed to maximise exposure to the day-to-day goings-on in the operation. Pit operations, departmental interactions and daily activities were observed to determine site mining practices, with a view to assess site readiness to apply MineStar and take advantage of the offerings.

“Understanding the history of change in all organisations was an important part of the workshop and visit,” Wescombe said. “We wanted to learn about change that had been managed well and identify areas for improvement. We did that by asking a lot of questions of people from every aspect of the operation. We engaged the site at all levels – from equipment operators to a representative from Perenti’s office in Perth, Australia.”

The discussions invited participants to share concerns or perceived challenges surrounding daily operations. They were encouraged to contribute ideas around how the daily operation and a change to the site’s mining system can be effectively managed from their perspective.

Workplace culture was also explored, gaining insight into how the site is managed and identifying areas of success and opportunities for improvement. Fengu said: “The goal of this effort was to help reduce incidents and unintended operational consequences, and to provide guidance to remedy any shortcomings through application of the technology.”

In addition, the workshop was designed to strengthen the collaborative relationship between the site, corporate office, Barloworld and Caterpillar. Caterpillar says it and its dealer are essential stakeholders who are pivotal to the successful deployment of MineStar Solutions.

“In a nutshell, our goal was to best understand how we could support AMS through the process of change management,” Patterson, Caterpillar Operational Readiness Consultant, said. “We started by encouraging all participants to leave preconceived ideas at the door on the way in to the workshop and asking everyone to be open-minded to change.”

Developing a path forward

All stakeholders agree that the workshop is just the beginning of ongoing engagement into getting the maximum value from technology at Motheo.

“The workshop helped us start the process,” Sam Farhand, Group Asset Manager for Perenti, said. “We learned a lot about the site and about each other. But now the hard work begins – addressing those challenges we’ve identified and ensuring that we never stop paying attention to how the technology is being used and continuing to find new ways to reap the benefits it delivers.”

An important outcome of the workshop is a 30-plus-page report that identifies the areas impacting successful implementation of MineStar technologies at Motheo and provides recommendations and possible solutions that will help address them.

The report is designed to:

  • Ensure understanding of the “why” for change management, and the benefits of using the Caterpillar team for this initiative;
  • Summarise the vision for the deployment as voiced by Perenti and AMS employees;
  • Articulate the landscape in which the project is taking place;
  • Highlight activities on which to partner or reinforce;
  • Present identified opportunities to adapt, build and embed new processes;
  • Identify the unique needs of the people who will be impacted;
  • Outline a change management plan to support the deployment; and
  • Share immediate action items to facilitate a successful deployment.

Sharing positive feedback

When asked about the success of the workshop, all stakeholders had positive things to say.

“The on-site engagement and participation in the workshop were outstanding,” Pierre Hill, Country Manager for Barloworld Botswana, said. “Attendance was terrific. It was a fantastic example of collaboration and teamwork.”

Wescombe agreed: “We were very pleased with the willingness of the key stakeholders to break traditional silos, open up lines of communication and actively engage in rich discussions between corporate, dealer, OEM, maintenance, planning and operations.”

But the most important feedback comes from Perenti. “We thought the workshop was very beneficial,” Farhand said. “It has helped us build a strong foundation on which to base our focus on innovation and technology.”

As the Caterpillar Manager for Perenti, Wescombe is quick to point out the teamwork and collaboration necessary for the success of the workshop – and the future of the technology in the years ahead.

“Without Greg Lawson and Sam Farhand from Perenti, this event would not have happened,” he said. “They helped us gain the traction we needed from internal stakeholders to get this off the ground. Plus, Sam and the on-site AMS Motheo team were instrumental in coordinating and supporting the workshop to ensure its success.”

“Our Caterpillar and dealer teams also deserve recognition. Leslie Fengu and Joel Patterson were key contributors to this effort, along with Pierre Hill and J.P. Briggs from our Cat dealer Barloworld. These folks worked closely with the Perenti team to build a preliminary understanding of the site challenges in order to optimise discussions during the site visit.”

The collaboration was a great example of the “three-legged stool” Caterpillar talks about when dealing with its customers in partnership with dealers. “When all three entities are working toward the same goal, we’re going to be so much more successful than when we go it alone,” Wescombe said. “We’re looking forward to a lot more opportunities to work together with Perenti/AMS and Barloworld in the years ahead.”

This is an edited version of a blog that first appeared here.

Perenti boosts Botswana portfolio with Sandfire Motheo copper project contract

Perenti Global Ltd says its surface mining business in Africa, African Mining Services (AMS), has been awarded the contract for open-pit mining services at Sandfire Resources’ Motheo copper project in Ghanzi, Botswana.

The contract, which is yet to be finalised, has an estimated value of $496 million over an initial seven-year-and-three-month term with a provision for a one-year extension.

Under the terms of the Mining Services Contract, AMS will identify a suitable local Botswana company or companies as a joint venture partner for the project and transition to the joint venture before the commencement of mining in early 2022.

Finalisation of the contract is contingent on the satisfaction of two primary conditions, namely Sandfire being granted a mining licence for the project; and finalising the terms of the Mining Services Contract.

Perenti Managing Director and Chief Executive Officer, Mark Norwell, said Motheo represented a game-changing growth opportunity for AMS and will substantially increase Perenti’s presence in Botswana.

“Growing our footprint in Botswana is aligned with our 2025 strategy, to further expand into stable mining jurisdictions and pursue quality projects. The benefit of adding Motheo to the Perenti project portfolio is the opportunity to leverage our existing in-region operational presence at Zone 5 (owned by Khoemacau Copper Mining) as well as partnering with Sandfire to develop Botswana’s next large-scale, highly productive, world-class copper mine.

“The Motheo project is another positive step in the ongoing transformation of our AMS business as we seek to create value and certainty for our client Sandfire and the Ghanzi community.”

Motheo is in the Kalahari Copper Belt, an emerging and relatively underexplored copper producing region. It is around 200 km to the southwest of the Khoemacau Zone 5 project, where Perenti, through its subsidiary Barminco, is currently engaged to undertake underground mine development works.

Motheo is held through Sandfire’s subsidiary, Tshukudu Metals, and was approved for development by Sandfire’s Board of Directors in December 2020 following completion of a definitive feasibility study (DFS) on a base case of a 3.2 Mt/y operation with expansion potential.

The DFS outlined an initial 12.5-year operation, underpinned by an updated ore reserve of 39.9 Mt at 0.9% Cu and 12.2 g/t Ag for 360,000 t of contained copper and 15.6 Moz of contained silver, producing on average circa-30,000 t/y of contained copper and 1.2 Moz/y of contained silver over the first 10 years of operations.

Perenti Mining Chief Executive Officer, Paul Muller, said: “Through this commitment and the establishment of a local joint venture partnership, we expect that more than 95% of the workforce will be citizens of Botswana. Furthermore, and leveraging our existing Maun based state-of-the-art mining training centre, our workforce will have access to the latest mining techniques and technology to enable the creation of a safe, highly skilled and productive workforce to support economic growth and diversification within Botswana.”

Muller said the company was also excited by the opportunity to deploy “future-focused mining technology initiatives” on the project that not only provide expected productivity and safety benefits to Sandfire but are also aligned with the two firms’ sustainability goals.

Perenti anticipates pre-production work to commence in late 2021 with mining to commence in early 2022.

Swick Mining working on drilling and technology business demerger

Swick Mining Services says it is working towards a demerger of its drilling and mineral technology businesses following a strategic review.

The announcement came at the same time as the ASX-listed METS firm revealed Drilling Business revenue and EBITDA results of A$149.6 million ($111 million) and A$24.6 million, respectively, for its 2020 financial year. A 9% increase in underground metres drilled saw the company beat its 2019 financial revenue total of A$142.9 million, while the impacts of COVID-19 and ramp-up costs at the Pogo mine contract (Northern Star Resources) saw EBITDA drop from A$28.2 million in the previous financial year.

During this period, the company’s deep exploration division launched new DeepEX rigs, which Swick says are the world’s most powerful underground mobile rigs with capacities to drill exploration holes up to 3,000 m of NQ2 core. Two DeepEX hybrid rigs are currently deployed at client sites, it said.

And the company successfully completed on-site trials of its Orexplore technology, the major technology underpinning its mineral technology business.

These site-based trials were undertaken at Sandfire Resources’ DeGrussa copper-gold mine, in Australia, for a three-month pilot project and at Sweden-based mining and smelting company Boliden for a five-month paid pilot project.

“The first trial at the DeGrussa mine resulted in approximately 9,000 m of core scanned in total, generating 20 TB of 3D data – the largest and most continuous dataset of its kind in the world for a single mine site,” Swick said. “With the trial complete, Orexplore has engaged two world-class subject matter experts to assist Sandfire and other potential clients understand the benefits of a comprehensive Orexplore data set.”

Earlier this month, Swick said Orexplore had been awarded its first in-field commercial agreement with St Barbara Ltd at the Gwalia mine in Leonora, Western Australia.

Despite these wins over the last year-and-a-bit, the company said a strategic review had recommended the company carried out a demerger of the Drilling Business and the Mineral Technology Business.

This could be tied to the fact that, at a group level, Swick reported a net loss after tax of A$6 million in the 2020 financial year, which, it said, reflected the lower Drilling Business earnings and ongoing investment in the company’s Mineral Technology Business, Orexplore.

Swick Managing Director, Kent Swick, said: “Financial year 2020 has presented a unique and challenging set of circumstances with the onset of the COVID-19 pandemic. The business has quickly adapted during this difficult period, ensuring we maintained continuity of operations and protected our people on site both internationally and locally.

“I am pleased with the ability of our Drilling Business to deliver robust earnings in this environment and secure new work with existing clients, including our two largest contracts for Northern Star and BHP, which provide a strong platform for the business as we enter the 2021 financial year.

“Meanwhile, our efforts in the Mineral Technology Business are starting to show value, with successful site-based, paid trials in the year for our Orexplore technology and the award of our first ever in-field commercial agreement earlier this month.

“We have a clear strategy for these two businesses and are now progressing with the outcome of our strategic review to demerge the Drilling Business and the Mineral Technology Business to allow them to pursue their respective strategies and ultimately deliver the greatest value to Swick shareholders.

“Meanwhile, Swick is in a strong financial position, with gearing excluding AASB16 lease liabilities reduced to A10.6 per cent in the year. Swick has A$12.7 million cash and A$18.5 million in undrawn facilities, providing the liquidity that has enabled us to win and deliver on new work, invest in new technologies including DeepEX and Orexplore, and continue providing value for shareholders in these uncertain times through dividends and share buybacks.”

CSIRO senses a new way forward for mineral exploration

A project focused on the Capricorn region of Western Australia has indicated mining companies could more accurately pinpoint reserves of valuable minerals using a new water-tasting approach developed by the national science agency, CSIRO.

In research supported by the Minerals Research Institute of Western Australia (MRIWA), broad “haloes” of altered water chemistry around known deposits of gold, uranium, and other minerals were discovered where interaction with the ore systems had left distinctive traces in the water.

CSIRO Researcher, Dr Nathan Reid, led a team of scientists analysing samples of groundwater from the Capricorn region, where layers of sediment and weathering are believed to hide potential ore deposits from view.

Dr Reid explained: “Groundwater penetrates through covering sediments and interacts directly with the bedrock, dissolving trace amounts of the minerals present into solution. By sampling those waters, our instruments can essentially ‘taste’ the geology they have come into contact with.”

Where the underlying rocks contain a valuable ore deposit, the chemical flavour of that mineralisation extends much further than the concentrated mineralisation itself, according to Dr Reid, comparing this with a teaspoon of salt making a whole glass of water taste salty.

These haloes of altered water chemistry could help geologists identify areas where other ore deposits might still lie hidden below the surface, helping to focus mineral exploration in the right areas, according to CSIRO.

Chemical anomalies identified in groundwater from sediment-covered areas of the study region have already stimulated further exploration investment from companies seeking to identify undiscovered mineral deposits, according to CSIRO. Industry sponsors of the project include Marindi Metals, Thundelarra Resources, Sandfire Resources, Northern Star Resources, MMG, Gascoyne Resources, Auris Metals, RNI, Erongo Energy and Independence Group.

MRIWA CEO, Nicole Roocke, said the innovative work in this project by scientists across CSIRO, the Centre for Exploration Targeting and Curtin University will play an important role in encouraging mining industry investment in under-explored areas of Western Australia.

“This work demonstrates the exciting mineral exploration potential remaining in the Capricorn, and we anticipate this innovative approach to mineral exploration will stimulate renewed interest in many similar areas of Western Australia where we know richly endowed geology lies buried below younger rocks,” she said.

“By supporting this fundamental research, the Western Australian Government is helping to provide the mineral exploration industry with the tools it needs to invest in identifying the next generation of ore deposits in this state.”

The technical report summarising the findings of this research can be found here.