Sandfire Resources Ltd · ASX:SFR
Sandfire Resources — Investor Presentation (December 2020)
61 slides from Sandfire Resources's investor presentation, Dec 1, 2020
Slide 1: A new era: Investor Update and Outlook Presentation
A new era Investor Update and Outlook Presentation 1 December 2020 Page: 1 SANDFIRE RESOURCES - CREATING VALUE THROUGH OPPORTUNITY
Slide 2: Important Information and Disclaimer
ImportantImportant Information andand Information Disclaimer Disclaimer This presentation has been prepared by Sandfire Resources Ltd (Sandfire or the Company) and contains information about Sandfire current at the date of this presentation. The presentation is in summary form, has not been independ
Slide 3: A compelling investment opportunity
• One of the few ASX-listed copper exposures • Strong cash-flow from existing high-grade operations at DeGrussa in Western Australia • Robust and building financial position with ~$304m in cash (30 September 2020) and no debt vs. current market cap of ~$800m Introduction • Long-life project pipeline
Slide 4: Creating value through opportunity
Execute delivery Strategy Sustainable production Creating value Accelerate discovery through opportunity Align and empower our people Optimise capital structure Page: 4 SANDFIRE RESOURCES - CREATING VALUE THROUGH OPPORTUNITY
Slide 5: Sustainability Strategy aligned to long-term growth plan
Collaborate with our stakeholders to generate enduring socio- economic development where we are present Standardise Sandfire’s Our people live in communities and management of ESG they have a right to go home safe, across all operations healthy and with a sense of fulfilment Sustainability Strategy
Slide 6: Overview and Key assets
Overview Key assets Market Index ASX-200 Issued Capital 178m shares Cash $304m (Sept Qtr) Debt Nil Operating Mines Development Pipeline Exploration Portfolio Market Cap ~$800m (at $4.50) ● DeGrussa, Western Australia ● Tshukudu, Botswana ● Doolgunna, Western Australia - DeGrussa Copper-Gold Mine - T
Slide 7: Overview: A new era
DeGrussa Strong cash-flow with opportunity to extend mine life ● Strong, low-cost production: 67-70kt Cu, 36-40koz Au in FY2021; C1 US$0.85-US$0.90/lb ● Substantial near-mine and regional exploration prospectivity ● Evaluating Gold Transition Strategy to maintain continuity of operations, leverage e
Slide 8: Copper: A cornerstone metal for the global economy
• Copper is a critical metal for global economic growth • It is the third largest global metal market behind iron and aluminium: >22Mt worth over US$150 billion consumed annually • Strong underlying demand from the construction and industrial sectors – well placed to benefit from global Copper stimu
Slide 9: Copper Emerging Market Deficit Driven by Multiple Factors
Copper│ Emerging Market Deficit Driven by Multiple Factors Page: 9 S A N D F I R E R E S O U RS A C ENSD -F ICRREE AR TE ISNOGU R V CA EL SU E- CT RH ERAOTUI N GGH OPPORTUNITY
Slide 10: Copper concentrate sales markets
• Selling into a robust, deep and mature global concentrate market • Smelters and traders compete on treatment and refining terms through well-established tender and spot processes • Extensive customer base built over eight years at DeGrussa • High-quality concentrate in demand globally, suitable fo
Slide 11: Tshukudu: Expanding horizons in Botswana
Tshukudu Expanding horizons in Botswana Tshukudu, Botswana - T3 Copper-Silver Project - A4, T1 Expansion Projects - 26,650km2 exploration portfolio (Botswana and Namibia) Page: 11 S A N D F I R E R E S O U RS A C ENSD -F ICRREE AR TE ISNOGU R V CA EL SU E- CT RH ERAOTUI N GGH OPPORTUNITY
Slide 12: Botswana Country overview
• Safe, democratic and politically stable • Strong mining history • Supportive Government (rated #1 in Africa and #45 globally by Fraser Institute Annual Survey of Mining Companies) • Established mining legislation and Botswana environmental controls Country overview • Skilled workforce and quality
Slide 13: Kalahari Copper Belt Regional geology
• The Kalahari Copper Belt is a major zone of strata-bound copper-silver deposits extending for 1,000km along the northern margin of the Kalahari Craton in Namibia and Botswana • Cupric Canyon have recently defined more than 2Mt contained copper at the Zone 5* Kalahari Copper discovery in the Kalaha
Slide 14: Dominant position in the Kalahari Copper Belt
T3 EXPANSION PROJECT A4 Tshukudu T1 T3 PROJECT Dominant position A4 Resource 6.5Mt @ 1.5% Cu in the Kalahari & 24g/t Ag Copper Belt – T20 EXPANSION PROJECT 26,650km2 T3 Resource 53.3Mt @ 0.90% Cu & 12.7g/t Ag Page: 14 SANDFIRE RESOURCES - CREATING VALUE THROUGH OPPORTUNITY
Slide 15: Motheo Production Hub 5.2Mtpa
• Definitive Feasibility Study (DFS) for T3 3.2Mtpa Project complete • Clear visibility to rapidly expand production to Motheo 5.2Mtpa through the addition of the A4 deposit Production Hub • T3 Motheo construction includes US$20M upfront 5.2Mtpa investment to facilitate expansion case cost effective
Slide 16: T3 Definitive Feasibility Study Optimisation
• MOD Resources acquisition completed late 2019 • Baseline was MOD Feasibility Study (completed March 2019) • Sandfire optimisation process included: T3 Definitive ‐ Updated Resource model, incorporating Feasibility Study new drilling and revised structural interpretation, geotechnical analysis and
Slide 17: T3 Definitive Feasibility Study 3.2Mtpa
• Updated Mineral Resource: 53.3Mt at 0.90% Cu and 12.7g/t Ag (1.0% Cu equivalent) for 480kt of contained copper and 21.8Moz of contained silver; • Updated Ore Reserve: 39.9Mt at 0.90% Cu and 12.2g/t Ag for 360kt of contained copper and 15.6Moz of contained silver; • 12.5-year mine life at 3.2Mtpa b
Slide 18: T3 DFS Geology
• The T3 Project is a structurally controlled stratabound copper-silver deposit, where mineralisation formed over a protracted period that preceded and overlapped regional deformation, resulting in multiple generations of mineralisation • T3 Mineral Resource – extends over 2km strike length and 720m
Slide 19: T3 DFS Mining
• Four-stage open pit • 280Mt Total Material Movement, 39.9Mt Ore • 6:1 strip ratio • Final Pit Dimensions: 1,500m x 640m x 245m T3 Definitive • Design of the pit footwall and ramps account for interpreted thrust (footwall to be mined beyond the footwall thrust and independent ramps in each stage in
Slide 20: T3 DFS Mining Schedule
T3 Definitive Feasibility Study │ T3 Mining Schedule 35 1.4% 30 1.2% 25 1.0% 20 0.8% Tonnes (M) Grade Cu% 15 0.6% 10 0.4% 5 0.2% Page: 20 S A N D F I R E R E S O U RS A C ENSD -F ICRREE AR TE ISNOGU R V CA EL SU E- CT RH ERAOTUI N GGH OPPORTUNITY
Slide 21: T3 DFS Processing
• 3.2Mtpa processing plant (397 t/h) • 92% plant availability • Moderate ore competency • SAG mill T3 Definitive • Primary crusher Feasibility Study • Pebble crusher • The single-stage SAG (SSSAG) circuit Processing • Coarse grind size (P80 212 µm) • Typical flotation scale-up factors • Simple rough
Slide 22: T3 DFS Concentrate production
Copper-in-Concentrate • ~100,000tpa of single 45 35% concentrate, containing 40 30% ~30,000t of contained copper 35 25% and ~1.2Moz of contained 30 Tonnes (‘000) 20% silver Cu% 25 15% 20 T3 Definitive • LOM average concentrate 15 10% grade of ~30% Cu, 380g/t Ag Feasibility Study 10 5% • High-quality
Slide 23: Motheo Production Facility Base Case
Motheo │ Production Facility – Base Case Reagent Store Clinic Laboratory Administration Workshop Grinding Raw Water Primary Crushing Pond Tails Thickener Feed Conveyor Pebble Crushing Water Concentrate Coarse Ore Services Thickening Stockpile & Reclaim Flotation Concentrate Storage Page: 23 S A N D
Slide 24: Motheo Production Facility Expansion Case
Motheo │ Production Facility – Expansion Case Reagent Store Clinic Laboratory Administration Designed to be rapidly scalable to 5.2Mtpa with only the addition of a Ball Workshop Mill and expanded Concentrate Storage Ball Mill Expansion Grinding Raw Water Primary Crushing Pond Tails Thickener Feed Co
Slide 25: T3 Feasibility Study Site infrastructure
Accommodation Camp 132kV Switchyard Main Road Access T3 Feasibility BPC 220kV Study Power Line T3 PROJECT A4 PROJECT Site infrastructure Pit Stockpile Waste Storage Facility Process Plant Tailings Storage Facility Motheo Overall Site Layout Page: 25 SANDFIRE RESOURCES - CREATING VALUE THROUGH OPPORT
Slide 26: T3 DFS Site infrastructure
Tailings Storage Facility Access Road • Design capacity 50Mt, up to 5.2Mtpa footprint • 15km gravel road from sealed main highway • Downstream construction integrated with the Communications waste dump • Optical fibre connection to highway T3 Definitive • Double HDPE lined facility Accommodation Fac
Slide 27: T3 Feasibility Study Transport
Excellent transport route and access to port • Walvis Bay, Namibia • 1,000km by sealed road to port • Bagged into shipping containers T3 Feasibility Study Transport Motheo and sales Production Hub Page: 27 SANDFIRE RESOURCES - CREATING VALUE THROUGH OPPORTUNITY
Slide 28: Tshukudu: Our people
• In-country executive team from construction into operations • Established mining skills in-country • 95% local workforce Tshukudu • Existing exploration workforce of over 70 employees Our people • Approximately 1,000 direct jobs creation during construction • Approximately 600 direct jobs during o
Slide 29: Tshukudu Community and Environment
Community • Sponsorship & Donations: • Ghanzi Primary Hospital – medical relief supplies to manage COVID-19 demands • Partnership with Window of Hope Centre to supply sports equipment Tshukudu • Tshukudu nursery project continued seed collection – an initiative to support local employment, training
Slide 30: T3 DFS Capital
• Mining cost to pre-strip to Capital Expenditure Estimates US$M AU$M (at 0.70) first ore Construction Overheads 17.2 24.6 • Processing plant capital Mining Pre-Strip 73.0 104.3 assisted by coarse grind size Process Plant 46.4 66.3 and low energy intensity T3 Definitive • EPCM construction contract
Slide 31: T3 DFS C1 unit costs
• Highly competitive C1 unit costs: ‐ US$1.97/lb LOM pre-credit ‐ US$0.32/lb by-product credit from contained silver ‐ US$1.65/lb LOM T3 Definitive Feasibility Study C1 unit costs C1 Unit Costs (pre-credit) Page: 31 SANDFIRE RESOURCES - CREATING VALUE THROUGH OPPORTUNITY
Slide 32: T3 Development Timeline
T3 Development Timeline T3 Definitive Feasibility Study Project implementation Page: 32 S A N D F I R E R E S O U RS A C ENSD -F ICRREE AR TE ISNOGU R V CA EL SU E- CT RH ERAOTUI N GGH OPPORTUNITY
Slide 33: Motheo Production Hub: T3 Expansion Area
• Expanded exploration underway to: ‐ Target high-grade satellite discoveries with potential to support the emerging Motheo Production Hub ‐ Delineate additional resources with the potential to extend mine life ‐ Target major new regional discoveries to unlock the belt’s broader potential Motheo • I
Slide 34: A4 Maiden Mineral Resource
• Maiden A4 Inferred Mineral Resource based on 79 holes • Approximately 70% higher Cu grade than T3, and 1.75% Cu equivalent grade • Valuable additional feed potential, forming the initial basis of the proposed expansion to 5.2Mtpa processing rate Motheo • An additional 47 in-fill and extensional di
Slide 35: A4 Maiden Mineral Resource drill holes
Motheo Production Hub A4 Maiden Mineral Resource drill holes A4 Plan view – collar location of drill holes used to inform the Mineral Resource Estimate (MRE). US$4.50/lb Cu price optimised pit shell shown in dashed black outline. Grey collars represent existing holes targeting deeper mineralisation
Slide 36: A4 cross-section
Motheo Production Hub A4 cross-section A4 schematic cross-section – showing interpreted geology and mineralisation styles across the A4 Deposit. US$4.50/lb Cu price optimised pit shell used to constrain the MRE shown in black outline. Page: 36 SANDFIRE RESOURCES - CREATING VALUE THROUGH OPPORTUNITY
Slide 37: High-grade A4 intersections post Maiden Mineral Resource
MO-A4-122D Upper Zone (within optimised pit shell): • 22.0m @ 6.0% Cu and 98.2g/t Ag from 120m down-hole (incl. 9.5m @ 11.7% Cu & 188g/t Ag from 130.5m) Lower Zone (within optimised pit shell): • 13.15m @ 10.2% Cu & 143g/t Ag from 169m down-hole (incl. 7.15m @ 16.0% Cu & 222g/t Ag from 175m) MO-A4-1
Slide 38: A4 deposit longitudinal projection
Potential for further discoveries in the A4 Dome along strike and down-dip from current resource and along the extensive NPF contact confirmed in deeper drilling bellow current resource Motheo Production Hub A4 deposit longitudinal projection A4 Longitudinal projection looking north showing optimise
Slide 39: Motheo Production Hub Next steps
• Submit the T3 Definitive Feasibility Study to the Government of Botswana – right to acquire up to a 15% fully contributing interest in T3, with that decision to be made on or before the date a Mining Licence is granted Motheo • Complete final permitting and secure Production Hub grant of the Minin
Slide 40: Major regional Airborne-EM Survey Commenced
• A major regional AEM survey covering approximately 13,450km2 and extending from the Namibian border to the eastern limit of Sandfire’s licence holdings has commenced and is expected to continue into early 2021. First data from the survey have been received and initial processing is expected to com
Slide 41: DeGrussa: Strong foundations in Western Australia
DeGrussa Strong foundations in Western Australia DeGrussa Operations, WA Exploration - DeGrussa Copper-Gold Mine - Greater Doolgunna Province, WA - Monty Copper-Gold Mine - East Coast Portfolio (NSW, Qld) Page: 41 S A N D F I R E R E S O U RS A C ENSD -F ICRREE AR TE ISNOGU R V CA EL SU E- CT RH ERA
Slide 42: DeGrussa Operations Outlook
DeGrussa Operations • FY2021 guidance: positioning for upper end of guidance 67-70kt of contained copper and 36-40koz of contained gold, at C1 US$0.85-$0.90/lb • DeGrussa and Monty Copper-Gold Mines scheduled to combine for 1.6Mtpa head feed to September 2022 Quarter DeGrussa and Monty Copper-Gold M
Slide 43: DeGrussa Gold Transition Strategy
Potential transition to gold production at DeGrussa • Resource drilling continues at Old Highway Gold Prospect, 22km from DeGrussa • Synergies with the DeGrussa Tailings Gold Retreatment Project studies • Mineralisation hosted in quartz veining associated with shearing in sediments • Scoping studies
Slide 44: Doolgunna World-Class VMS Exploration Project
Doolgunna │ World-Class VMS Exploration Project • Strategic 7,189km2 footprint across the Bryah Basin • Over 90km strike length of prospective VMS lithologies – strategic focus on southern limb of Bryah Basin • Three centres of sulphide Original Tenements: 400km² mineralisation discovered to date –
Slide 45: Doolgunna Multi-Pronged Exploration Strategy
Doolgunna exploration strategy: • Accelerate discovery to extend DeGrussa Operations mine life • Focus on Mineral System Element Processes for deep targeting • 22 favourable structural corridors identified Doolgunna in the Sandfire managed tenure DRILLING OR CORE PHOTO • Basin-scale geodynamics revi
Slide 46: DeGrussa Red Bore Exploration
Sandfire now manages exploration on the strategically located Red Bore tenement (85% interest) • Exploration will commence with Moving Loop EM over the tenements and a review of historical data • Drilling will then be planned utilising new information, and our extensive local geological understandin
Slide 47: Eastern States Exploration Projects
• Decades of historic drilling imaged by North Batten JV 3D porphyry geochemical modelling Pb-Zn, Cu, Mn at Temora has aided planning for the current drilling program • Multivariate analysis of geochemical Alitia JV Pb-Zn, Ag anomalies combined with ground Alitia South JV truthing of geophysical dat
Slide 48: Eastern States Endeavor Project
Joint Venture with CBH Resources Long section looking West • Historical production of ~30Mt of ore at ~13% Pb/Zn and +65g/t Ag* • Farm-in gives Sandfire the right to earn up to 51% by spending $10m and 75% by spending $20m, or Eastern States acquire 100% for a payment of $30m • Initial drilling is e
Slide 49: Black Butte, Montana, USA
Black Butte Montana, USA Black Butte Copper Project, Montana, USA (85%) Page: 49 S A N D F I R E R E S O U RS A C ENSD -F ICRREE AR TE ISNOGU R V CA EL SU E- CT RH ERAOTUI N GGH OPPORTUNITY
Slide 50: Black Butte Current activities and outlook
● Early project works ● Enhancement of Feasibility Study being progressed Black Butte ● Exploration underway within the Mining Copper Project Lease targeting potential extensions and other near-mine opportunities Current activities ● Continuing to respond to and deal with and outlook legal challenge
Slide 51: Johnny Lee Feasibility Study key results
• Maiden Ore Reserve of 8.8Mt at 2.6% Cu for 226,100t of contained copper • Underpins an 8-year mine life at 1.2 million tonnes per annum • Forecast LOM production totaling 805,000 dry Black Butte metric tonnes of copper concentrate containing Copper Project 189,500t of copper metal • Average annual
Slide 52: Johnny Lee Ore Reserve and Mineral Resource
Black Butte Copper Project Johnny Lee Ore Reserve and Mineral Resource Contained Contained Ore Reserve – Tonnes Copper Mineral Resource – Tonnes Copper Copper Copper Johnny Lee (100%) (mt) (%) Johnny Lee (100%) (mt) (%) (kt) (kt) Proved 2.0 3.0 61 Measured and Indicated 10.9 2.9 311 Probable 6.8 2.4
Slide 53: Lowry Mineral Resource
Black Butte Copper Project Lowry Mineral Resource At Lowry, copper is found in the Middle Sulphide Zone. Lower Zone copper mineralisation is present at both Johnny Lee and Lowry. Sub-economic Upper Zone Sulphide is also present at Lowry. The Middle Sulphide Zone potentially extends to the south and
Slide 54: Near-mine exploration program underway
Black Butte Proposed Drilling Copper Project Near-mine exploration program underway Page: 54 SANDFIRE RESOURCES - CREATING VALUE THROUGH OPPORTUNITY
Slide 55: Planned 2D Seismic Line
JOHNNY LEE DEPOSIT Black Butte LOWRY Copper Project DEPOSIT Planned 2D Seismic Line Near-mine exploration program underway Planned 2D Seismic Line Page: 55 SANDFIRE RESOURCES - CREATING VALUE THROUGH OPPORTUNITY
Slide 56: Sandfire Ventures: Exposure to compelling growth
• Strategic investments in companies with exposure to high-quality base metal and development assets • Current investments include: • Adriatic Metals (ASX: ADT): Sandfire Ventures • Base metal exploration/development with high- grade assets in Bosnia-Herzegovina Exposure to • Current 14.2% stake, ri
Slide 57: Capital Structure
• DeGrussa cash flows and high cash holding leveraging into other international base and precious metals growth opportunities • No debt, outside lease liabilities Capital Structure • Project debt finance facility of around 50% targeted for T3 development and Optimise capital working capital structur
Slide 58: Key takeaways
Strong foundations – high-margin production and cash-flow, strong debt-free balance sheet New long-life production hub being developed in Botswana with construction Key takeaways of T3 commencing in Q3 FY2021 Highly prospective global exploration portfolio to drive organic growth A capable and focus
Slide 59: Competent Person's Statements
Competent Person’s Statements T3 Ore Reserve The information in this report that relates to Open Pit Ore Reserves, is based on information compiled by Mr Jake Fitzsimons who is a Member of The Australasian Institute of Mining and Metallurgy. Mr Fitzsimons is employed by Orelogy Consulting Pty Ltd an
Slide 60: Competent Person's Statements
Competent Person’s Statements Johnny Lee and Lowry Mineral Resource The information in this announcement that relates to the Johnny Lee and Lowry Mineral Resources is based on information compiled by Mr Erik Ronald (M. Eng., P.Geo, RM- SME, Principal Resource Geology Consultant, SRK). Mr Ronald has
Slide 61: Contact Details
A new era Investor Update and Outlook Presentation 1 December 2020 Contact Details Level 2, 10 Kings Park Road, West Perth WA 6005 Australia PO BOX 1495, WEST PERTH WA 6872 AUSTRALIA +61 8 6430 3800 +61 8 6430 3849 www.sandfire.com.au Page: 61 SANDFIRE RESOURCES - CREATING VALUE THROUGH OPPORTUNITY
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