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Black Butte Copper Progress Update

Black Butte Copper Progress Update

July 25th, 2018
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White Sulphur Springs, Montana– July 25, 2018 –Sandfire Resources America Inc. (“Sandfire America” or the “Company”) is pleased to provide the following update on activities at the Black Butte Copper underground project in Montana.

Metallurgical Drilling and Test Work

The 2018 Spring drilling program focused on recovering mineralized core for further metallurgical test work. 16 large-diameter (114 mm diameter) diamond drill holes dispersed throughout the Upper Copper Zone (“UCZ”) of the Johnny Lee deposit provided representative samples for metallurgical testing. These holes also delivered further clarification of the geology within the UCZ.

A total of 2,011 kilograms of mineralized core has been prepared for metallurgical testing at Base Metallurgical Laboratories (“BML”) in Kamloops, British Columbia. BML are world-wide recognized experts in base metal froth flotation recovery testing. The results of this test work will support the design of the proposed process flow sheet for the processing plant which is an integral component of the Bankable Feasibility Study, and will allow modelling of recoverable copper within the mineralized zones to optimize scheduling.

Two additional diamond drill holes pierced the Lower Copper Zone (“LCZ”) of the Johnny Lee deposit and improved knowledge of this zone.

An additional three diamond drill holes were completed outside the known mineralized zones to investigate areas of planned future facilities.

See Table 1. below for results from drill intersections through the UCZ and LCZ and associated drill hole locations on Maps 1 and 2.

Table 1. Black Butte Copper 2018 Spring Drilling Program Intersections of the Johnny Lee Deposit

Hole ID From
(m)
To
(m)
Length (m) Cu Co Ag g/t
SC18-207 63.24 70.64 7.40 2.21% 0.14% 14.3 UCZ
SC18-209 83.48 89.66 6.18 1.52% 0.07% 7.7 UCZ
and 102.29 109.60 7.31 4.38% 0.13% 8.0 UCZ
SC18-211 118.24 147.42 29.18 2.23% 0.08% 14.2 UCZ
SC18-212 121.22 135.16 13.94 1.94% 0.08% 14.6 UCZ
SC18-213 132.73 139.00 6.27 1.57% 0.08% 18.3 UCZ
and 142.88 146.75 3.87 1.83% 0.04% 16.5 UCZ
SC18-214 156.70 160.29 3.59 2.50% 0.11% 23.2 UCZ
SC18-215 56.50 58.77 5.99 2.74% 0.08% 11.4 UCZ
SC18-216 UCZ Abandoned
SC18-217 119.70 132.13 12.43 3.26% 0.19% 12.4 UCZ
SC18-218 49.17 56.93 7.76 0.98% 0.11% 26.5 UCZ Intercept compromised by poor core recovery
SC18-219 74.03 85.05 11.02 2.34% 0.14% 8.6 UCZ
SC18-220 121.58 126.80 5.22 2.29% 0.13% 21.3 UCZ
SC18-221 101.35 109.79 8.44 1.96% 0.07% 7.3 UCZ
SC18-222 90.40 103.74 13.34 1.95% 0.05% 19.1 UCZ
SC18-224 119.48 131.98 12.50 2.78% 0.11% 11.1 UCZ
SC18-225 No significant mineralization intercepted UCZ
SC18-226 55.70 66.10 10.40 2.07% 0.10% 17.7 UCZ
SC18-223 424.02 425.67 1.65 12.10% 0.05% 13.1 LCZ
SC18-227 422.06 423.68 1.62 9.42% 0.13% 20.2 LCZ

*UCZ intercept calculations included a minimum of 3.0 metres above 1.5 % cutoff grade, with maximum of 5.0 metres internal waste.
*LCZ intercept calculations included a minimum of 1.5 metres above 1.5 % cutoff grade, with maximum of 1.5 metres internal waste.

Drilling in the Upper Copper Zone was conducted sampling PQ-sized core. Drilling in the Lower Copper Zone was conducted collecting HQ3-sized core. Drill holes were oriented with dips varying between vertical (-90) to -55 degrees in relatively flat-lying to slightly dipping mineral zones. Intercepts may be slightly longer than true thickness.

All Upper Copper Zone (UCZ) mineralized zones were sampled whole and delivered to Base Metallurgical Labs (BML) in Kamloops BC for processing. BML crushed the entire sample to 85% passing 2mm then split off 1kg, which was ground to 85% passing 75 micron and delivered to ALS Global Labs in Vancouver BC. ALS Global wet-sieved the split to insure grinding passed specifications and then assayed for gold by fire assay with AA finish. Base metals were analyzed using a 4-acid digestion and ICP-AES analysis. Various other trace and major elements were also analyzed utilizing ICP and XRF procedures. Sandfire America utilized a QA/QC protocol which included inserting Certified Reference Materials (CRM) on a minimum of 1 CRM in 20 samples insertion rate. ALS Global included assays of duplicates, standards, and blanks for QA/QC purposes.

All Lower Copper Zone samples were taken from ½ splits of the HQ3 core and shipped directly to ALS Global Lab in Reno NV. The samples were crushed to 85% passing 2mm size, split down and then ground to 85% passing 75 micron size. These pulps were then assayed utilizing same processes and procedures as described above for the UCZ samples. The same QA/QC procedures were utilized as well.

ALS Global labs are accredited to ISO/IEC 170205:2017 methods for North America

Bankable Feasibility Study (“BFS”)

Preparations are well advanced for the Black Butte Copper underground project BFS. In addition to the metallurgical work discussed above, the Company has contracted SRK Consulting to complete a review of the structural geology of the property, utilizing historic data and new stratigraphic modeling completed by the in-house geological team. Combined with the existing resource modelling, this work will provide the basis for the initial underground design work.

Other packets of work for the BFS are being prepared for issuance for tender with a target completion date of the June Quarter 2019.

Permitting Progress

Preparation of the Environmental Impact Study (“EIS”) under the watchful eye of the Montana Department of Environmental Quality (“DEQ”) is progressing. A draft EIS may be available for public comment in the fall of 2018.

The draft air permit was issued by the DEQ in June and will be incorporated into the EIS. In May, the Company received notification from DEQ that its MPDES (Montana Pollutant Discharge Elimination System) water quality permit application has no further deficiencies.

Corporate Activities

In June, the Company completed a simplification restructuring removing two unnecessary subsidiaries and, in the process, released US$1.15 million of restricted funds. Following the simplification, the Company now has one wholly owned subsidiary, Tintina Montana Inc, which in turn wholly owns the Black Butte Copper underground project.

Management is currently considering a Rights Issue to fund ongoing permitting costs, the BFS and future drilling activities.

Interim CEO and VP of Project Development Rob Scargill stated, “The Company is pleased to see the Black Butte Copper underground project progressing in such a consistently positive direction. We look forward to reaching the construction phase of this project and implementing our vision, which is consistent with our community’s stewardship council’s vision, of a project that has a net positive effect economically, socially, and environmentally.”

QUALIFIED PERSON
Jerry Zieg, Vice President of Exploration for the Company, is a Qualified Person for the purposes of NI 43-101 and has reviewed, verified, and approved the data disclosed and information of a scientific or technical nature contained in this news release.

Contact Information:
Sandfire Resources America Inc.
Nancy Schlepp, VP of Communications
Mobile: 406-224-8180
Office: 406-547-3466
Email: nschlepp@sandfireamerica.com

CAUTIONARY NOTE

Cautionary Note Regarding Forward-Looking Statements: Certain disclosures in this document constitute “forward looking information” within the meaning of Canadian securities legislation, including statements regarding the completion of the BFS, permitting timelines and the Company’s plans for advancing the Black Butte Copper Project and expected outcomes. In making these forward-looking statements, the Company has applied certain factors and assumptions that the Company believes are reasonable, including that the Company will receive required regulatory approvals, that the Company will continue to be able to access sufficient funding to execute its plans, and that the results of exploration and development activities are consistent with management’s expectations. However, the forward-looking statements in this document are subject to numerous risks, uncertainties and other factors, including factors relating to the Company’s operation as a mineral exploration and development company and the Black Butte Copper Project, that may cause future results to differ materially from those expressed or implied in such forward-looking statements, including that results of exploration and development activities will not be consistent with management’s expectations, delays in obtaining or inability to obtain required government or other regulatory approvals or financing, failure of plant, equipment or processes to operate as anticipated, the risk of accidents, labor disputes, inclement or hazardous weather conditions, unusual or unexpected geological conditions, ground control problems, earthquakes, flooding and all of the other risks generally associated with the development of mining facilities. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. Readers are cautioned not to place undue reliance on forward-looking statements. The Company does not intend, and expressly disclaims any intention or obligation to, update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by law.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.