Sandfire America wins water rights ruling in Montana

Sandfire Resources America (TSXV: SFR) has received another positive court ruling in Montana regarding its leasing of mitigation water rights for the Black Butte copper project, which has been challenged by local communities for years.

In March 2020, Sandfire subsidiary Tintina Montana received preliminary approval from the Montana Department of Natural Resources and Conservation (MT DNRC) for the issuance of a beneficial groundwater permit. But it was challenged by five environmental organizations.

A district court judge upheld the state’s decision in 2023 when the environmental groups lost their challenge at a hearing and petitioned for judicial review. The judge ruled that both the DNRC and the hearing examiner had properly determined that “mine dewatering is not a beneficial use of water.”

On Friday, Sandfire said the Montana Supreme Court has affirmed the district court ruling on its determination of “beneficial use of water” with a 5-2 decision.

This positive decision follows the February 2024 Supreme Court ruling that reinstated the company’s operating permit after it was invalidated by the District Court in April 2022. It was a lawsuit by local conservation groups against Tintina Montana and the Montana Department of Environmental Quality (MT DEQ).

Fully permitted

Lincoln Greenidge, CEO of Sandfire America, said its Black Butte copper project now has all permits to proceed, which reached feasibility stage in 2020. At the time, Sandfire’s management called it “one of the few fully permitted and development-ready copper assets globally.”

The feasibility study was based on mining from the Johnny Lee deposit, which underpins an eight-year mine life and is designed to be mined at 1.2 million tonnes of ore per annum. Average annual production is estimated at approximately 23,000 tonnes of copper at a cash cost of US$1.51 per lb.

Shares of Sandfire Resources America surged by a third to 40¢ apiece early Friday afternoon in Toronto. Its 52-week high was 46¢, while its low was 7.5¢. The company has a market capitalization of $409.3 million.