Canadian mining company Sandfire Resources and Havilah Resources from Australia have signed a binding term sheet to advance their partnership at the Kalkaroo copper-gold project and form a strategic exploration alliance across the Curnamona Province in north-eastern South Australia.
This agreement aims to accelerate the development of one of Australia’s largest undeveloped open-pit copper-gold deposits.
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Under the terms, Sandfire can earn up to an 80% interest in the Kalkaroo project via a two-stage earn-in structure. The initial consideration totals A$105m ($68.61m), paid as 70% scrip and 30% in cash.
An additional A$105m (C$96.39m) will be payable upon completion of a new pre-feasibility study (PFS), which will incorporate a minimum 20,000m of infill and an extension drilling programme.
Sandfire will commit A$30m to regional exploration over a minimum of 24 months under the exploration strategic alliance.
This initiative is designed to unlock new discoveries within the wider Havilah exploration tenement package in the Curnamona Province.
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By GlobalDataThe transaction creates a rapid pathway to advance the Kalkaroo deposit by pairing Sandfire’s mine design and project development capabilities with Havilah’s geological expertise.
Havilah technical director Chris Giles said: “We are very pleased to have reached a binding agreement with Sandfire that provides for completion of a new Kalkaroo PFS, including a substantial drilling programme targeting resource upgrade and expansion.
“Immediate value for Havilah shareholders will be realised via an upfront payment, which also gives Havilah a direct stake in Sandfire’s successful global mining operations via the share component. Exposure to longer-term value is also achieved via Havilah’s retained 20% interest in Kalkaroo.
“The funding under the exploration strategic alliance will allow us to accelerate regional exploration in South Australia with the objective of transforming the highly prospective Curnamona Province into Australia’s next major copper province, centred on the Kalkaroo project development.”
Kalkaroo currently hosts an ore reserve of 100 million tonnes (mt) (90% proved), with a copper grade of 0.47% and a gold grade of 0.44 grams per tonne (g/t), supported by a sulphide mineral resource of 224mt at 0.49% copper and 0.36g/t of gold.
The new PFS will evaluate the open extent of the Kalkaroo orebody along strike and at depth.
Completion of the PFS is targeted within 18–24 months from the finalisation of definitive transaction agreements.
This is expected to reduce the project risk and potentially expand the existing ore reserve.
The dedicated exploration strategic alliance will focus on identifying and targeting new discoveries across Havilah’s broader exploration tenement package.
Sandfire CEO and managing director Brendan Harris said: “We are thrilled to have the opportunity to work with the Havilah team to de-risk the Kalkaroo copper-gold project, which is in a preferred jurisdiction with ready access to key road, rail and energy infrastructure and ground water supply, and skilled labour from Adelaide, Broken Hill and the broader regional community.
“We also look forward to working with the South Australian Government and other local stakeholders to advance this important project by leveraging our core capabilities and investing in the region.
“The decision to move into the Curnamona Province in South Australia is fully aligned with our strategy and has the potential to replicate our successful entry into the Kalahari Copper Belt.”
