Sandfire Resources (ASX:SFR) says the mining lease for its wholly-owned DeGrussa Copper-Gold Project has been formally granted by the West Australian Department of Mines and Petroleum (DMP), paving the way for development and mining to commence next year.

The grant of mining lease covers all four high-grade VMS copper deposits discovered to date at DeGrussa together with the proposed 1.5Mtpa treatment facility, accommodation village and other supporting infrastructure.

It follows the Sandfire's announced total $102 million capital raising, with the closure on 8 December 2010 of the 1-for-12 retail entitlement offer, which is expected to raise $37 million.

According to the company, "the completion of this capital raising will increase Sandfire's cash resources to approximately $135 million, putting it in a very strong position to rapidly press ahead with development of the DeGrussa Project."

Sandfire's Managing Director, Mr Karl Simich, said this was a very important milestone for the company.

"During 2010, we have delivered four successive JORC resource statements at DeGrussa, increasing our resource inventory to 644,000 tonnes of copper and 724,000 ounces of gold, commenced a Definitive Feasibility Study and pre-development activities, secured two key Land Access Agreements with native title groups and now secured the Mining Lease to enable project development to proceed.

"We have also raised over $170 million in equity capital and increased our market capitalisation beyond $1 billion, putting us in a very strong position to become Australia's next copper-gold producer."