For that reason companies are offering big multiples for copper assets, with a number of deals headlining the metal’s rise to prominence last year.
Glencore’s CSA mine in New South Wales went to a US SPAC backed by heavy hitters like Bill Beament and Nev Power for US$1.1 billion last year.
South32 (ASX:S32) stumped up the big bucks (around US$1.5 billion) for 45% of the Sierra Gorda mine in Chile and the party for copper M & A has continued into this year, with Aeris Resources (ASX:AIS) offering up $80 million and a 30% stake in its business for Soul Patts’ Round Oak Minerals.
One of the most publicised copper deals of the last year was Sandfire Resources’ (ASX:SFR) US$1.8 billion deal ($2.6b) for the MATSA copper and zinc mine in Spain from Trafigura and Mubadala Investments.
While the price was high, Sandfire’s charismatic boss Karl Simich had been quick to claim a bargain on the broader exploration potential of the asset, located near the original Rio Tinto copper mine in Spain.
It has provided the first evidence of that, releasing a first resource estimate since Sandfire collected the keys in February of 147.2Mt at 1.4% copper, 3% zinc, 1% lead and 39.6g/t silver, containing 2.1Mt of the red metal, 4.4Mt zinc, 1.5Mt lead and 187.6Moz of silver.
Measured and indicated resource include 109Mt at 1.5% copper and 3.2% zinc, 14% up on the previous resource from the end of 2019 after depletion. Sandfire says a new ore reserve and life of mine plan is due for completion in the September quarter, around the same time as the company’s DeGrussa mine in WA is due to wind up.
The overall resource also contains the first indication of the potential scale of satellite resources outside the project’s major Aguas Tenidas, Magdalena and Sotiel mines with the Concepción, Poderosa and Castillo-Buitrón deposits totalling 19.8Mt at 1.2% Cu and 1.6% Zn.
Simich said the figures confirmed the ‘world-class’ nature of the project.
“Very importantly, the Measured and Indicated Mineral Resource has seen an increase in overall tonnes, contained copper and zinc since the previous December 2019 Mineral Resource Estimate – more than making up for mining depletion at MATSA over the two years prior to Sandfire’s ownership,” he said.
“The global Mineral Resource of 147.2Mt incorporates initial Inferred Resource estimates Concepción, Poderosa and Castillo-Buitrón deposits of just under 20Mt, demonstrating the geological potential of the belt – which we believe offers outstanding potential from an exploration perspective.
“They also demonstrate the significant untapped exploration potential at MATSA, which offers numerous high-quality targets for our exploration team both in the immediate near-mine environment and across our regional tenement holding.
“This Mineral Resource represents an outstanding first step for Sandfire at MATSA and we have every confidence that this exceptional asset will continue to grow and develop in the months and years ahead, forming the backbone of our ambition to become a sector-leading international base metals producer.”
Sandfire is planning more than 35,000m of resource development drilling at MATSA in FY23.