Ann: AUR: Sandfire JV Update March 2022 Quarter, page-8

Easy - the answer is that they have a perfectly functioning operational plant there on-site. To discover an economic deposit, you need enough operational cashflow to financially justify the significant Capex and other costs (including opportunity costs) that comes with developing a greenfield mine.

However, given SFR have the perfectly operational plant already established at DeGrussa, a small satellite discovery that is in reasonably close proximity to the DeGrussa plant, could be mined at very little cost (and could be brought to market quite quickly, given the existing infrastructure and approvals in place). Spending a few million dollars here and there on exploration in this region, with the (likely ambitiious) hopes of capitalising on the existing plant + infrastructure (worth hundreds of millions of dollars), is a good use of money imo. All it takes is a small deposit of copper (even if it's lower grade than the exceptional DeGrussa/Monty deposits) to produce a couple of years of lucrative cash flow. The downside is we burn through $10-20 odd million in exploration. But given the cashflow that SFR are pumping out, I'm completely happy with this as a shareholder, given the potential upside.

It's effectively what their rationale with the Old Highway gold project is. Unless they discover something significant, there's no way that that project would economically stack-up if it was a greenfield mining project (new plant + supporting infrastructure). But as it stands, it may well stack-up economically if they only need to spend the equivalent of 10-15% of Capex in modifying the existing DeGrussa plant (disclaimer: this number is entirely hypothetical, just for conversation's sake).