Yesterday, Sandfire reported a maiden indicated and inferred resource of 1.05 million tonnes at 9.4% copper and 1.6 grams per tonne gold for 99,000 tonnes of contained copper and 55,000 ounces of gold for Monty.

Sandfire managing director Karl Simich said the resource was an “exceptional grade” and highlighted the potential of the Doolgunna region.

“This is well and truly a mining proposition,” he told investors this morning.

As well as continuing exploration around Monty (at depth and laterally), the company will also reassess other areas it had previously explored.

“There are significant opportunities in the extensive 1600sq.km of ground we’ve got,” Simich said.

In a tough market, Simich said exploration and organic growth was the best way to add value.

Chief operating officer Mike Spreadborough said a “feasibility-style document” for Monty was being targeted by the end of the year.

At this stage, Monty looks likely to extend the mine life of the DeGrussa mine, 10km away, with Sandfire today confirming the mine life and plan to 2021.

The plan contains 8.1Mt at 4.4% copper and 1.7gpt gold for 357,000t copper and 443,000oz gold.

Sandfire declared a maiden reserve for the Conductor 5 deposit of 1.8Mt at 4.5% copper and 2.1gpt gold for 83,000t copper and 123,000oz gold.

The mine plan is yet to include Monty, but based on Sandfire’s FY16 guidance of 65,000-68,000t copper and 35,000-40,000oz, it could add around 1.5 years to DeGrussa’s life.

Simich said today that the company is tracking to the upper end of the guidance after producing 16,095t copper and 9080oz gold in the March quarter.

C1 cash costs of $US1.01 per pound were in line with full-year guidance of 95c-$1.05/lb.

Production at DeGrussa until 2021 will be maintained at a similar rate (1.6Mtpa), with guidance for FY17 to be similar to the current year.

Shares in Sandfire dropped 3.7% to $A5.25.