The Investing News Network looks at ASX-listed gold companies Sandfire Resources and Regis Resources.
For investors focused on the resource space, a good way to track companies listed in Australia is to look at the S&P/ASX 300 (INDEXASX:XKO). The index includes all S&P/ASX 200 (INDEXASX:XJO) companies as well as about 100 smaller-cap companies, and as of April 2015 accounted for 74 percent of the Australian equities market. Specifically, the S&P/ASX 300 Metal & Mining (INDEXASX:XMM) division is a great source for companies to watch.
The Investing News Network is thus profiling companies on the S&P/ASX 300 Metal & Mining index. This week’s companies are Sandfire Resources (ASX:SFR) and Regis Resources (ASX:RRL).
Australian miner Sandfire Resources became a copper producer in 2012 after successfully completing construction and commissioning at its wholly owned DeGrussa copper-gold mine outside of Perth. DeGrussa is expected to produce 300,000 tonnes of high-grade copper concentrate per year. For the 12 months ended June 30, 2015, DeGrussa produced 67,154 tonnes of copper and 37,386 ounces of gold. For the 2016 financial year, Sandfire expects to see production in the range of 65,000 to 68,000 tonnes of contained copper and 35,000 to 40,000 ounces of contained gold.
Currently, Sandfire is working on the construction of an innovative $40-million solar power station at DeGrussa. Earlier in December, the company reported that the project is the largest integrated off-grid solar and battery storage facility in Australia. The station will consist of 34,080 solar photovoltaic panels that will cover over 20 hectares on a site located immediately adjacent to the underground mine. The company started construction in mid-July, and the project is currently on track for completion in the first quarter of 2016.
The DeGrussa copper mine is part of the 100-percent-owned Doolgunna project, located in the Bryah Basin. Doolgunna hosts an aggregate contiguous exploration area of 1,700 square kilometers, including a strike length of over 65 kilometers of highly prospective VMS lithologies.
In 2014, Sandfire acquired a 36-percent interest in Tintina Resources (TSXV:TAU), which is working on developing the Black Butte copper project in Montana. The company also holds a 38-percent interest in WCB Resources (TSXV:WCB) and a slew of other early stage projects around Australia. Additionally, Sandfire manages projects on behalf of its major shareholder, Yanzhou Coal Mining Company (NYSE:YZC).
Regis Resources, another Australian miner, has a successful track record of developing mid-sized gold operations in Australia and Africa. The company is currently operating the Duketon gold project in Western Australia and the McPhillamys gold project in New South Wales.
Duketon is located some 130 kilometers from the city of Laverton. Regis commenced mining at the project in 2010, and has since produced more than 500,000 ounces of gold at cash costs in the “lowest quartile of the Australian gold industry.”
Earlier in 2015, Regis purchased the Gloster gold deposit, located about 26 kilometers from the Moolart Well processing plant. With a historic mineral resource of 8,279,000 tonnes at 1.37 g/t for 365,000 ounces, the company expects to be able to extend the operational life at Moolart Well through trucking mined ore to that plant for treatment.
In October, Regis reported on further exploration at Duketon, releasing excellent results from a 190-hole reverse circulation program that was completed in September at Baneygo. The company reported on 12 holes that intersected gold results greater than 50 grams per meter, including 10 meters at 6.36 g/t gold from 95 meters in hole RRLBYRC142, and 19 meters at 4.31 g/t gold from 76 meters in hole RRLBYRC162.
The results were take over a 3-kilometer strike area, and according to Regis, continue to confirm the presence of a much larger mineralized system than was previously identified in limited drilling.
Securities Disclosure: I, Vivien Diniz, hold no direct investment interest in any company mentioned in this article.
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