Sandfire Commits A$210M to Earn 80% of Kalkaroo Copper-Gold Project

A Strategic Partnership to Advance Kalkaroo

In a significant move for the Australian copper-gold sector, Sandfire Resources Limited and Havilah Resources Limited have entered into a binding term sheet to jointly advance the Kalkaroo Copper-Gold Project in South Australia’s Curnamona Province. This agreement sets a clear pathway for Sandfire to earn an 80% stake in the project through a two-stage earn-in structure valued at A$210 million, combining upfront payments and milestone-based considerations.

The deal also establishes a strategic exploration alliance, with Sandfire committing an additional A$30 million over two years to regional exploration. This alliance aims to leverage Havilah’s deep geological expertise and Sandfire’s operational capabilities to unlock new discoveries in a region poised to become a major copper province.

De-Risking and Expanding the Resource Base

Central to the transaction is a new pre-feasibility study (PFS) that will include a minimum 20,000-metre drilling program designed to increase confidence in the existing Mineral Resources and Ore Reserves and test extensions of the Kalkaroo orebody. The current Ore Reserve stands at 100 million tonnes with copper and gold grades of 0.47% and 0.44 grams per tonne respectively, supported by a larger sulphide Mineral Resource of 224 million tonnes.

This drilling and study program, targeted for completion within 18 to 24 months, is expected to de-risk the project by providing updated technical and economic assessments. Sandfire’s proven track record in mine design and development is anticipated to complement Havilah’s local geological knowledge, potentially unlocking significant value and resource expansion.

Financial and Structural Details

The initial stage requires Sandfire to pay A$105 million upfront, split between 70% in shares and 30% in cash, granting them the right to earn into the project. Upon successful completion of the PFS, Sandfire may elect to pay a further A$105 million, again through a combination of cash and shares, to secure their 80% interest. Havilah will retain a 20% free carried interest until the final investment decision, after which Sandfire will arrange project financing, with Havilah’s share to be repaid from future cash flows.

Shareholder approval from Havilah and regulatory consents are key conditions precedent, with a general meeting scheduled no later than January 30, 2026. Both companies have committed to transparent collaboration and knowledge sharing to ensure a smooth progression of the project.

Regional Exploration Upside

Beyond Kalkaroo itself, the strategic alliance includes a dedicated regional exploration program targeting the broader Havilah tenement package. This initiative reflects confidence in the Curnamona Province’s potential to host further significant copper-gold deposits, potentially replicating Sandfire’s successful expansion strategies in other prolific regions.

Havilah’s Technical Director, Dr Chris Giles, highlighted the immediate and long-term value for shareholders, noting the upfront payment and shareholding in Sandfire’s global operations, alongside the retained interest in Kalkaroo. Sandfire’s CEO Brendan Harris emphasized the project’s strategic location with access to infrastructure and skilled labour, aligning with their growth strategy.

Looking Ahead

This agreement marks a pivotal step in advancing one of Australia’s largest undeveloped copper-gold deposits. The collaboration between a major copper producer and a local explorer could accelerate development timelines and unlock substantial regional value. However, the ultimate success hinges on the outcomes of the PFS, exploration results, and regulatory approvals.