Sandfire Resources (ASX: SFR) and Havilah Resources Limited (ASX: HAV) have executed a binding term sheet to advance the Kalkaroo copper-gold project and establish an exploration strategic alliance across the highly prospective Curnamona Province in north-eastern South Australia.
Under the term sheet, Sandfire may earn an 80% interest in Kalkaroo through a two-stage earn-in structure, comprising a $105 million upfront consideration (70% scrip and 30% cash) and a further $105 million consideration upon completion of a new pre-feasibility study that will include a minimum 20,000m of infill and extension drilling.
In parallel, Sandfire will commit $30 million to regional exploration across a minimum 24-month period under the exploration strategic alliance.
Transaction Highlights
- Establishes a rapid pathway to unlock one of Australia’s largest undeveloped open-pit copper-gold deposits by bringing together Australia’s largest listed, independent copper producer and a local partner and proven explorer.
- Enables Sandfire to potentially expand the existing Ore Reserve of 100Mt (90% Proved) with a copper grade of 0.47% and gold grade of 0.44g/t that is underpinned by a sulphide Mineral Resource of 224Mt with a copper grade of 0.49% and gold grade of 0.36g/t.
- De-risks the project through completion of a new PFS that will test the open extent of the Kalkaroo orebody along strike and at depth, within 18 to 24 months from the finalisation of the definitive transaction agreements.
- Combines Sandfire’s proven mine design, project development and operating capabilities with Havilah’s deep geological knowledge of the Curnamona Province and track record of discoveries.
- Unlocks significant regional upside potential through a dedicated exploration strategic alliance that will target new discoveries within the broader Havilah exploration tenement package.
Sandfire Resources 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 groundwater 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.”
Havilah Resources technical director Dr Chris Giles added:
“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 program 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.”
