Johnny Lee Deposit Projected 1.2 Million Tons Of Ore Annually

WHITE SULPHUR SPRINGS, MT – Sandfire Resources America Inc. reported on Mineral Resource and Reserve and the results of the Preliminary Feasibility Study Update (PFS) for the Johnny Lee deposit at its Black Butte Copper Project in White Sulphur Springs, Montana, pursuant to National Instrument 43-101 – Standards of Disclosure for Mineral Projects (NI 43-101).
The Study Update relates to Mineral Resources and Reserves associated with the Johnny Lee copper deposit, the cornerstone deposit at the Black Butte Copper Project. The Company is also pleased to announce an updated Mineral Resource for the Lowry copper deposit (the “Lowry Deposit”), which is located approximately 3km south-east of the Johnny Lee Deposit.
Average annual post-tax cashflows of US$78 million per annum for the first five years of operations. The Project is forecast to generate US$2.3 billion in gross revenue and US$1.0 billion in pre-tax net cashflow during mine operations, based on a copper price of US$4.70/lb. Updated Measured and Indicated Mineral Resource of 18.9 million tonnes at 2.4% copper for 462,000 tonnes of contained copper and Inferred Mineral Resource of 3.4 million tonnes at 1.9% copper for 64,000 tonnes of contained copper completed for the Johnny Lee Deposit.
Using a Net Smelter Return cut off value of US$110/t, the Probable Mineral Reserves have increased from 8.8Mt at 2.6% Cu for 230,000 tonnes of contained copper in 2020 to 9.5 million tonnes at 2.9% copper for 270,000 tonnes of contained copper for the 2025 PFS, defined for the Johnny Lee Upper and Lower Copper Zones. The Project has been designed in accordance with all standards and obligations required under the Project’s stringent Mine Operating Permit conditions.
The Johnny Lee Deposit underpins an 8-year mine life and is designed to be mined at 1.2 million tonnes of ore per annum, with the processing plant producing ~35,000 tonnes per annum of contained copper in the initial four years of operation. Forecast production totaling 1,039,000 dry metric tonnes of copper concentrate containing 234,000 tonnes of copper metal over the life of the mine. Average annual production of ~29,000 tonnes of copper metal over an initial 8 year mine life at a direct operating cash cost (C1) of US$2.56/lb. The Project has a pre-tax NPV8% of US$143 million (IRR=13.6%) and a post-tax NPV8% of US$99 million (IRR=11.3%). With a 10% movement in copper price, which is close to the current spot price for copper, pre-tax NPV8% increases to US$288 million (IRR=19.4%) with a post-tax NPV8% of US$217 million (IRR=16.0%).
CEO, Lincoln Greenidge, said, “The results mark an important milestone for the Black Butte Copper Project and reaffirm our confidence in the world-class potential of the Johnny Lee and Lowry deposits. The updated PFS confirms Johnny Lee’s highest-grade potential of any known undeveloped underground copper deposit in the United States, and it does so while meeting, and in many cases exceeding, the rigorous environmental and operational standards set out in our Mine Operating Permit. This reinforces our longstanding commitment to responsible, modern mining in Montana.
Importantly, the new Mineral Resource estimate for the Lowry Deposit underscores the scale of the broader area and highlights a powerful opportunity for future growth beyond the initial 8-year mine plan. Together, these updates position Black Butte as a strategically significant domestic copper project at a time when U.S. supply of critical minerals has never been more essential.
Our focus now turns to advancing the project through completion of a feasibility study. We remain committed to the development of a modern, environmentally responsible operation that will deliver long-term economic benefits to Meagher County and to the State of Montana, while creating meaningful value for our shareholders.”