Tag Archives: Sandfire Resources

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.