Sandfire Resources has reached an agreement to secure up to an 80% interest in the Thaduna/Green Dragon copper project 40 km east of its 100%-owned DeGrussa copper mine in Western Australia through a farm-in and joint venture with Ventnor Resources. The project produced its first copper concentrate during commissioning of its 1.5-million-mt/y concentrator in late September 2012. The project was officially opened in early August 2013.
The agreement is structured as a staged earn-in, with an up-front payment of $3 million by Sandfire to acquire an immediate 35% interest and the option to increase to as much as 80% in two stages by sole funding a further $6 million on exploration and studies over four years.
The Thaduna mine was discovered by prospectors in 1941, and small-scale production continued until 1953, followed by open-cut mining and trial underground mining intermittently from 1955 to 1971. A flotation plant operated from 1962 to 1971 and produced copper additives for fertilizers. The Green Dragon mine is located approximately 5 km north-northeast of the Thaduna mine. It was discovered at about the same time as Thaduna and was worked as a satellite operation.
Ventor has developed a JORC-compliant indicated and inferred resource of 7.9 million mt grading 1.8% copper and 3.7 g/mt silver for 142,000 mt of contained copper and 945,000 oz of contained silver. The resource includes oxide, secondary sulphide and deeper sulphide mineralization.
A scoping study completed by Ventnor in February outlined a potential production profile of 15,000 mt/y of copper in concentrates over an anticipated mine life of 10 years. Sandfire believes there may be an opportunity, subject to further evaluation and technical studies, to process both the sulphide and oxide material contained within the Thaduna/Green Dragon resource. The sulphide material is potentially amenable for processing through the existing DeGrussa concentrator, and the oxide material will be considered for processing as part of, or in conjunction with, a potential DeGrussa oxide copper project.