Sandfire looks ahead following DeGrussa success

The DeGrussa solar farm. Image: Sandfire

Western Australian miner Sandfire Resources has continued its strong performance at the DeGrussa copper-gold operation a year on from winning the coveted Mine of the Year accolade at the 2016 Prospect Awards.

Sandfire’s CEO and managing director Karl Simich told Australian Mining that DeGrussa – located around 900km north of Perth – has delivered its best results since the operation was launched five years ago.

“It’s been a really wonderful last 12 months and the trend has been one of ongoing and consistent improvement for what has been a very solid and robust operations,” he said. “The project has never gone better.”

Simich explained that DeGrussa has produced around 330,000 to 400,000 tonnes of copper, yielding around $2.6 billion worth of revenue, over the past five years.

“From a cash flow perspective, we are producing somewhere in the order of 1.2-3 billion dollars of cash flow. It’s not a physically big operation, yet its operating performance has been extraordinarily lucrative,” he said.

One of DeGrussa’s key features is an innovative solar facility, considered the world’s largest off-grid solar and battery system.

Simich explained that while the concept of using the sun to generate energy through solar panels was not new, the way it has been applied at DeGrussa was unique.

“It’s a collaborative energy system linking and communicating with the in-situ diesel powered station, together with the solar system and a back-up battery system,” Simich said.

“Having those three energy sources communicating with each other and dealing with the vagaries of weather, clouds, night time and day time, and making sure that they are all are complementary and communicating is a unique situation that’s not been done before.”

At its peak, the facility can provide up to 25 per cent of the site’s energy requirements on an annual basis. It is being used as a complementary energy source for the project as it does not run 24/7.

“The worst thing you can have in a system that requires 24/7 power is an unscheduled power shortage or dropout, so having a reliable energy source is critical,” he said.

The facility was commissioned in June 2016 and Sandfire is ramping up its efficiency. While it has been successful on a number of fronts – particularly in terms of the message it sends to the world in terms of innovation – the solar facility has still been faced several challenges.

“When we put the system into operation, as you can imagine having for the first time ever software codes written for the integration of three systems to deal with many aspects, there were some teething problems,” Simich said.

“We’re probably still ironing out a few of the bugs, however it continues to improve all the time.”

Despite its challenges, the solar facility signals the growing trend toward renewable energy usage and other technology advances being undertaken in the mining industry.

“It’s the time of modern mining, innovation and technology,” Simich said. “Over the next many decades, we’ll see many ongoing technological advances, disruptions and changes for the positive.

“We’re seeing this in so many areas already, whether this is driverless trucks, alternative energy sources, using drone capabilities and various other things that will make massive improvements for the industry.”

Sandfire’s Monty site


Prospectors delight

Simich said Sandfire had increased its footprint in WA by around 11 times since it first made the DeGrussa discovery.

“The opportunities are wonderful in that region. We see positive achievement in the last number of years through the ability to consolidate our footprint and our landholding in the region,” he said.

The company has another copper-gold project in WA, Springfield, a joint venture with Talisman Mining. Within this project is the Monty deposit, which contains around one million tonnes of copper at a 9.5 per cent resource grade.

This, according to Simich, makes the deposit “the most significant grade discovery” in that region, particularly as the DeGrussa discovery contained an average of around 5.7 per cent copper.

“The opportunity in the region is significant so we’re really excited about the exploration prospectivity there,” he said.

On top of this, Sandfire secured a 78 per cent stake in a copper project in Montana, United States. The Black Butte project contains around 600,000 tonnes of copper at a 3.4 per cent copper grade and is in the final stages of the permitting process.

This will also be the 10th mine Simich has taken into production during his career in the resources industry.

“Hopefully within the next 12-18 months we will be in a stage where we can break ground in terms of construction,” Simich added.

The value of winning

Simich said winning the award recognised the hard work the company was doing in a positive way.

“It goes a long way to giving us the reputation that we want to be a responsible extractive industry,” he said.

With the highly prospective region of WA, as well as opportunities in New South Wales, Queensland and North America, Simich believes the best is yet to come for Sandfire.

“The prognosis for the commodity sector for our industry is looking very bright. I think it all looks well for the future and we look forward to being a part of it,” he said.

To nominate for the Prospect Awards, visit www.prospectawards.com.au.
This article also appears in the September edition of Australian Mining.