Sandfire Resources has struck a farm-in agreement with CBH Resources for the Endeavour base metal mine and exploration tenements in New South Wales.
The Endeavour mine has been in near-constant operation since 1982 and has a 1.2 million tonnes a year processing facility and tailings storage facility.
The mine was placed on care and maintenance in December last year due to its depleting reserve and significant cost required to access the deeper known resources.
The agreement with CBH paves the way for Sandfire to earn up to a 75 per cent interest in the tenements, or acquire the project for $30 million.
Sandfire stated that it represented a complementary addition to its East Coast base metal exploration initiative, including a ground position in the Lachlan Fold Belt and Cobar Basin in New South Wales and in the Mt Isa region in Queensland.
“The farm-in arrangement with CBH Resources provides Sandfire with a low-cost entry to an advanced exploration opportunity in one of the world’s most prolific base metal belts in New South Wales,” Sandfire managing director Karl Simich said.
“The presence of extensive infrastructure provides added strategic impetus in the event of exploration success within this under-explored belt.”
Sandfire will commit to spending at least $3 million in exploration expenditure within 18 months, before spending an additional $7 million should it elect to enter into a joint venture and earn a 51 per cent interest in the tenements.
The company can increase its interest further to 75 per cent by spending an additional $10 million.
In Western Australia, Sandfire produced a record 19,400 tonnes of contained copper at the DeGrussa operation during the September quarter, up from 19,313 tonnes in the previous period.
Mine production rates were lower than anticipated due to the timing of development ore and lower availability of production blasting equipment.
Sandfire expects the flagship mine to hit the upper end of its 2021 financial year production guidance of 67,000–70,000 tonnes of contained copper and 36,000–40,000 ounces of contained gold.