An updated economic study for Sandfire Resources America’s (TSX-V: SFR) Black Butte copper project in Montana adds reserves compared to the previous study as of 2025, although investment returns remain modest.
An updated Pre-Feasibility Study (PFS) adds the Lowry deposit to the mine plan and estimates potential reserves at 14.3 million tonnes grading 2.6% copper for 370,000 tonnes containing red metal, Sandfire reported on Thursday. At an 8% discount, the study estimates an after-tax net present value of $126 million ($178.5 million CAD), with an internal rate of return of 13.3% and initial costs of $474 million. Black Butte is located about 90 km east of the state capital, Helena.
“The new mineral reserve estimate for the Lowry deposit highlights the significant growth potential beyond our initial mine life of eight years,” Lincoln Greenidge, CEO of Sandfire Americas, said in a statement. “These updates position the Black Butte Copper Project as an important domestic copper asset when securing the U.S. mineral supply is critical.”
Among the most advanced
The updated reserve makes Black Butte one of the highest developed copper projects in the United States, although the updated PFS shows moderate returns versus its costs.
Lowry, which was not included in the previous study from last year, is located about 2 km from Johnny Lee’s main depot. Johnny Lee hosts a potential 9.5 million tonnes grading 2.9% copper for 270,000 tonnes of contained copper.
The Johnny Lee underground mine and its processing plant and infrastructure have received state and federal permits, though Thursday’s study did not determine whether the expanded mine plan that includes Lowry would require any permit modifications.
Sandfire said the addition of Lowry could reduce unit operating costs by $2.28 to $68.30 per ton using the long mechanical downtime at Lowry.
$476 million cash flow
Based on a copper price of $4.70 per pound, the project could generate $3.3 billion in gross revenue and $476 million in after-tax cash flow over the life of the mine, a 34% increase in cash flow compared to the previous study.
These figures are based on a projected annual production of 31,000 tons of existing copper over a 12-year period.
Sandfire shares fell 2% to 20 cents per share Thursday morning in Toronto, valuing the company at C$204.6 million. The stock has traded in a 12-month range of 19 to 55 cents.
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