Sandfire hits record production

Copper and gold miner Sandfire Resources has announced record production at its flagship DeGrussa mine near Meekatharra.

Sandfire mined 68,202 tonnes of copper in FY16, up from its guidance of between 65,000 and 68,000t, and 37,612 ounces of gold, which hit the mid-range of its target.

The Perth-based miner said it expected operating costs to come it at the lower end of its guidance range of between US90 cents and $US1.05.

Sandfire also said it had fully repaid its remaining $20 million owing on an amortising facility with ANZ; it was due to be paid by the end of next year.

The repayment reduced Sandfire’s debt to $50 million, with the company holding $60 million in cash.

Managing director Karl Simich said it was a very pleasing result.

“It essentially means that we have greater flexibility and optionality in terms of financing future growth initiatives,” he said.

“It also coincides with a period of reducing capital investment requirements at DeGrussa as the level of required underground mine development drops from a base level in FY2016 of 7,300 metres by 23 per cent in FY17 to 5,600 metres and by 74 per cent in FY18 to 1,900 metres.

“We will continue to assess the optimal financing structure for the organic growth options in front of us – such as the Monty copper-gold deposit, for which a feasibility study is under way.

“We also remain committed to maintaining our very significant exploration program, both at DeGrussa-Doolgunna and across our Australian exploration initiative on the eastern seaboard, while continuing to balance a return of surplus cash to shareholders.”

Sandfire shares were unchanged at $5.34 each at 11:30am.