5e5323fa-a05c-4061-9aca-b4feffbf6a27.pdf
28 January 2016
Mr Sebastian Bednarczyk Adviser, Issuers (Perth) ASX Limited
Level 8, Exchange Plaza 2 The Esplanade
Perth WA 6000
Dear Sebastian,
LODGEMENT OF DECEMBER 2015 QUARTERLY REPORT, QUARTERLY UPDATE PRESENTATION AND INVESTOR CONFERENCE CALL AND WEBCAST
I am pleased to attach the following items for immediate release to the market:
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December 2015 Quarterly Activities Report
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December 2015 Quarterly Update Powerpoint Presentation
In addition, a teleconference and live webcast on the December 2015 Quarterly Report will be held for the investment community at 10.00am (AWST) / 1.00pm (AEST) today.
The webcast and synchronised slide presentation is available through the Company's website or through BRR Media.
Live date: Thursday, 28 January 2016
Access this webcast at: http://webcasting.brrmedia.com/broadcast/56944abb2ac671c40a8c5881
http://www.sandfire.com.au
Yours sincerely,
Matt Fitzgerald
Chief Financial Officer and Company Secretary
ASX Announcement 28 January 2016
QUARTERLY REPORT
For the period ended 31 December 2015
Highlights
Production & Operations
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Contained metal production
|
September 2015
Quarter
|
December 2015
Quarter
|
1HFY2016
|
FY2016
Guidance
|
|
Copper (t)
|
16,638
|
17,642
|
34,280
|
65,000 - 68,000
|
|
Gold (oz)
|
7,885
|
9,420
|
17,305
|
35,000 - 40,000
|
|
C1 cost (US$/lb)
|
0.97
|
1.02
|
0.99
|
0.95 - 1.05
|
Process plant enhancements continuing to drive copper recoveries.
Exploration
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Resource drilling commenced at the Monty VMS copper‐gold discovery, part of the farm‐in with Talisman Mining, with four DDH rigs and one RC rig - 19,000m of RC and DDH drilling completed during the quarter.
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Significant zone of massive sulphides containing bornite mineralisation intersected in three holes which returned outstanding assay results including (down‐hole widths, not true widths):
o 9.6m @ 14.1% Cu and 1.5g/t Au from 292.3m (TLDD0036)
o 20.8m @ 14.9% Cu and 1.3g/t Au from 372.7m down‐hole (TLDD0042) o 11.3m @ 6.7% Cu and 2.9g/t Au from 392.2m down‐hole (TLDD0043) o 8.0m @ 13.3% Cu and 1.8g/t Au from 286.2m down‐hole (TLDD0021)
Corporate
Appointment of experienced resource industry executive Maree Arnason as a Non‐Executive Director.
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Increased stake in North American copper development company, Tintina Resources, from 36% to 57% by acquiring a 21% interest held by a fellow shareholder. Sandfire now controls Tintina for accounting purposes.
1.0 SAFETY PERFORMANCE
The Total Recordable Injury Frequency Rate (TRIFR) for the Sandfire Group for the December Quarter was
2.7 compared to a TRIFR for the September Quarter of 8.9. Recordable injuries include those that result in any days away from work (Lost Time Injuries) and those where an employee or contractor cannot perform all or any part of their normal shift (Restricted Work Day Injuries), as well as any injury that requires services that only a medical practitioner can provide (Medical Treatment Injuries).
This strong safety performance reflects a continued focus on initiatives to further improve safety performance including the development of safety systems, improved safety leadership, improvement of safety culture and risk and assurance management.
Figure 1: Drilling at Monty (left); and the DeGrussa Concentrator (centre and right)
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OPERATIONS OVERVIEW
Copper production for the December Quarter was ahead of guidance at 17,642 tonnes (September Quarter: 16,638 tonnes) at an average ore grade of 4.8% Cu (September Quarter: 4.7% Cu). C1 cash operating costs for the Quarter were US$1.02/lb (September Quarter: US$0.97/lb).
Mill throughput for the December Quarter was above 1.6Mtpa, with a total of 403,806 tonnes of ore milled. Mill throughput operating performance continues to demonstrate that the capacity of the process plant is close to 1.7Mtpa.
Copper recovery averaged 91.2% in the December Quarter, reflecting stable plant operation throughout the Quarter together with the impact of the column cell, which has delivered an improvement in copper recoveries since its installation in February 2015.
Mine production for the Quarter was 399,940 tonnes grading 4.8% Cu. This reflects an annualised production rate from the mine of 1.6Mtpa. During the Quarter, production was completed from the first stope from the C4 lens and ore development within the C5 lens commenced in early January 2016, which will allow C5 stope production to be brought forward to Q4 FY2016.
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MINING & PRODUCTION
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Overview
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December 2015 Quarter - Production Statistics
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Tonnes
|
Grade (% Cu)
|
Grade (g/t Au)
|
Contained Copper (t)
|
Contained Gold (oz)
|
|
Concentrator Mined
|
399,940
|
4.8
|
1.7
|
19,301
|
22,029
|
|
Milled
|
403,806
|
4.8
|
1.7
|
19,343
|
21,759
|
|
Production
|
72,039
|
24.5
|
4.1
|
17,642
|
9,420
|
Note: Mining and production statistics are rounded to the nearest 0.1% Cu grade and 0.1 g/t Au grade. Errors may occur due to rounding. Production Statistics are subject to change following reconciliation and finalisation subsequent to the end of the Quarter.
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Underground Mining
A total of 488 metres of ore drive development was completed during the Quarter, resulting in the production of 40,245 tonnes of development ore. In addition, 359,695 tonnes of stope ore was produced, resulting in total ore production for the Quarter of 399,940 tonnes grading 4.8% Cu.
During the Quarter, production was completed from the first stope in the C4 lens, with performance meeting expectations. This strong performance confirms consistent mine production at 1.6Mtpa rates and reflects a continued focus on reliable stope design and excavation, as well as mining fleet productivity. Opportunities to further enhance mine production will continue to be explored.
The mined copper grade was marginally higher than planned as a result of positive reconciliations from a number of stopes mined and minor adjustments to the mine schedule. On a total mine basis, project copper ore reconciliations remain slightly positive against the resource model.
The mine remains in balance between production and back-fill. Given the maturity of production in the C1 and DeGrussa lenses together with C4 now online, opportunities to replace paste back-fill in some stopes with mine waste continue to be identified, thereby reducing overall waste haulage to the surface and allowing a focus on ore haulage.
Total underground development had reached 32.8km at Quarter-end. The Conductor 1 decline was not advanced during the Quarter with the focus on development of the Conductor 4 and 5 declines. The development of the Conductor 1 decline will recommence as required for the extraction of the lower Conductor 1 ore.
During the quarter Conductor 4 decline development advanced 94 metres and Conductor 5 decline development advanced 203 metres, with all development advance occurring in good ground conditions. Ore development within the C5 lens commenced in early January 2016, which will allow C5 stope production to be brought forward to Q4 FY2016.
A Life-of-Mine update is expected to be released in Q4 FY2016 following completion of Diamond drilling in C5 and subsequent Mineral Resource and Ore Reserve modelling.
Figure 2: High-grade massive sulphides in the face of a new ore drive in the C5 orebody, January 2016
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Processing
Key processing metrics for the December Quarter included:
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399,940 tonnes milled at an average head feed grade of 4.8% Cu (September Quarter: 387,864 tonnes at 4.7% Cu);
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Overall copper recovery of 91.2% (September Quarter: 91.2%);
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Concentrate production of 72,039 tonnes (September Quarter: 67,024 tonnes); and
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Metal production of 17,642 tonnes of contained copper and 9,420 ounces of contained gold (September Quarter: 16,638 tonnes of contained copper and 7,885 ounces of contained gold).