Sandfire defies wave of project setbacks to launch copper mine on schedule
Western Australia's Sandfire Resources (ASX:SFR) is on the verge of bringing its DeGrussa copper mine on line and in accordance with its original schedule and budget targets.
The Australian reports that Sandfire has confirmed wet commissioning of the DeGrussa concentrator will be completed before the end of September, with the start of copper concentrate production set to commence soon afterwards.
Sandfire's delivery of the project both on time and on budget is in distinct contrast to the general trend of project delays and cancellations afflicting the Australian resources sector, due to a worsening environment of declining commodities prices and rising operating costs.
A recent analysis indicates that AUD$100 billion in resource projects have been shelved or delayed as a result of adverse operating conditions in Australia, while China's biggest bank recently affirmed dire predictions for Australia's mining industry by winding down its lending volume to the sector.
"We will come in on budget, in fact it's likely to be slightly less, and that's extraordinary", said Sandfire chief executive Karl Simich.
According to Sandfire itself DeGrussa is set to become Western Australia's largest copper mine with total resources of 652,000 tonnes in container copper as well 742,000 oz of gold.
Sandfire shares have risen by over 50% in the past year, outpacing key Australian copper peers OZ Minerals, which has fallen by around 26%, and PanAust, which has gained nearly 30%.
Simich expects the project to generate a free cashflow of $300 million per year over the next three years, and more than $2 billion in cashflow over the life of the project.