Sandfire Resources (ASX: SFR) and Havilah Resources Limited (ASX: HAV) have signed a binding term sheet to advance the Kalkaroo copper-gold project in South Australia and establish a strategic exploration alliance across the Curnamona Province.
The agreement marks a major step in the potential development of one of the country’s largest undeveloped open-pit copper-gold deposits.
Under the two-stage earn-in structure outlined in the term sheet, Sandfire may acquire up to an 80 per cent interest in the Kalkaroo project.
The first stage involves an upfront payment of $105 million, comprising 70 per cent in Sandfire shares and 30 per cent in cash.
The second stage, valued at another $105 million, will be triggered upon completion of a new pre-feasibility study incorporating at least 20,000 metres of infill and extension drilling.
In parallel with the project investment, Sandfire will commit $30 million to fund regional exploration over a minimum 24-month period.
Sandfire’s participation is expected to accelerate development by de-risking the project through a new pre-feasibility study designed to test the open extent of the Kalkaroo orebody along strike and at depth within 18 to 24 months of completing definitive agreements.
The collaboration will also target potential expansion of the current ore reserve of 100 million tonnes — 90 per cent of which is classified as proved — grading 0.47 per cent copper and 0.44 grams per tonne gold.
This reserve is supported by a sulphide mineral resource of 224 million tonnes grading 0.49 per cent copper and 0.36 grams per tonne gold.
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.”
Harris expressed anticipation for collaborating with both the South Australian government and local stakeholders to progress the project, emphasising that Sandfire would utilise its unique strengths and continue investing in the area.
He also noted that pursuing development in the Curnamona Province aligns closely with the company’s business strategy, and said the move holds promise for recreating the type of success Sandfire previously achieved with its 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.”
Giles explained that Havilah retains a 20 per cent interest in the Kalkaroo project, providing the company with exposure to longer-term value from the development.
He noted that the funding committed by Sandfire under the exploration strategic alliance will enable an acceleration of regional exploration efforts in South Australia, with the goal of establishing the Curnamona Province as a significant new copper-producing region centred around the Kalkaroo project.
Completion of the definitive transaction agreements and subsequent pre-feasibility study are expected to provide a clearer pathway for Kalkaroo’s future development and potential contribution to Australia’s copper supply base.
