Sandfire profit down 58%

Sandfire Resources has reported a 58 per cent fall in half-year net profit on the back of almost $60 million in depreciation and amortisation expenses and exploration costs.

The copper and gold producer reported a net profit of $33.5 million in the six months to December 2013, down from $79 million in the previous corresponding period.

The result was driven lower by $45.6 million in depreciation and amortisation charges relating to mine development, equipment and rehabilitation costs.

A further $14.2 million in exploration and evaluation expenses were written off in line with the company's accounting policy.

Sandfire's half-year revenue was meanwhile down 8.4 per cent at $249.6 million, based on sales of 30,098 tonnes of copper-in-concentrate and 14,437 ounces of gold at its DeGrussa mine north of Meekatharra.

The company noted that its latest half-year results were predominantly driven by underground sulphide mining and concentrator operations, while its previous results were driven by open pit and direct shipping ore chalcocite operations.

Sandfire said production at DeGrussa would weighted towards the second half of the 2014 financial year due to grade variability.

It expects full-year copper production to come in at the mid-point of its 65,000t to 70,000t guidance, with gold production likely to come in at the lower end of its 35,000oz to 40,000oz guidance.

Sandfire managing director Karl Simich said the company was on track for a stronger second-half performance following eforts to reduce costs and enhance margins.

"The first half marked the completion of our ramp-up to full production and the optimisation of our DeGrussa concentrator as we completed the campaign processing of transitional sulphide ore, which had previously restricted production levels," he said.

"This, together with the deferral of a December shipment, influenced the bottom line result, although it is important to note that our operating cash flow and underlying earnings remained strong."

Sandfire shares closed the day's trade 9 cents lower at $6.14.