Sandfire Resources has had a run most companies can only dream of, with its DeGrussa mine going from discovery to production in three short years.
The copper and gold mine was a standout finalist for the judges at this year’s Prospect Awards, with the miner walking away with the Hard Rock Mine of the Year award.
The high grade VMS copper gold mineralisation was discovered in mid-2009, with the company able to gain approval, construct and begin production at the site within a very quick timeframe.
The judges said it is “simply an amazing three year achievement".
Sandfire Resources’ DeGrussa Copper Mine was officially opened by West Australian Premier Colin Barnett in August 2013, who heralded the arrival of a standout high grade, low-cost new copper mines in the Asia-Pacific region.
The $400 million project, now WA’s biggest copper mine, produced 64,017 tonnes of copper and 42,679 ounces of gold in the 2013 financial year, and set up a highly profitable open pit direct shipping ore operation which was completed earlier this year.
This underpinned an impressive maiden net profit after income tax of $88 million for the year on sales revenue of $507.3 million.
The DeGrussa operation generated strong operating cash flow of $250.2 million – highlighting the cash generating potential of the efficient, low-cost mine. This enabled Sandfire to repay almost $100 million in its first full year of operations, while continuing to fund aggressive exploration, both at DeGrussa and across its growing Australian exploration portfolio.
Production for the 2014 financial year is forecast at 65-75,000 tonnes of copper and 35-45,000oz of gold at an impressively low C1 cash operating cost of US$1.05-1.15 per pound of payable copper.
Speaking at the ceremony in Sydney, the company’s managing director Karl Simich was clearly very proud of the operation.
“We’re very proactive in all the things we did to enable us to get from basically the first drill hole into cash flow inside three years which is an extraordinary event.”
He said the biggest hurdles in getting the mine up and running included ensuring technical work and government approvals ticked all the right boxes.
“I think the biggest thing is making sure it was a technical success in going from discovery to a fully- fledged, competent, technical mining operation that will work, but also dealing with the government regulations,” Simich said.
Simich is a passionate leader, and with 26 years’ experience in the mining industry, knows how to get the best out of his workforce.
Dedicating the award to his “wonderful team of people”, Simich said it has been a gratifying experience to see “what people can do when you go and give them some freedom”.
“It’s not one individual, it’s about a whole bunch of ordinary people doing extraordinary things,” he said.
“What’s been the most wonderful thing is seeing the proactiveness of people and also seeing what people can do when you let them run freely and let them challenge themselves.”
Sandfire said that at the heart of the DeGrussa operation is a highly efficient underground mine, accessed via the Evans Decline. The underground mine plan comprises over 38km of lateral development, enabling Sandfire to simultaneously extract ore from multiple faces across the four main deposits.
Underground development is proceeding on schedule, with five stopes now in various stages of development and production.
However, Simich has big plans for Sandfire, stating that on the back of the success at DeGrussa, his company is aiming to expand its portfolio in the next five years to include other operations.
“From our perspective it’s about continuting to do what we do because we love it," Simich said.
“[We are] looking for more opportunities and more mines we can potentially go and develop, [and] I would like to think that over the next three years Sandfire is not just a one mine company but maybe a multiple mine company.”
Highlighting the importance of “aggressive exploration”, Simich said he was sure the company would be at the helm of more success stories.
“Hopefully there is a lot more exploration success because that’s what gets everyone really excited.”
Although DeGrussa is one of the major copper and gold deposit discoveries in recent times, the confident MD said there were plenty more to find which may be bigger.
He said the drive to succeed came from looking for opportunities and trying to find the next extraordinary deposit.
“My view is that we have only found the small one,” he said.
“I think we found the small one and we are looking forward to finding the big one.”