Sandfire profit down, outlook up

Sandfire Resources has posted a 30 per cent decline in profit, but says it is in a good position to take advantage of the recent copper price recovery.

Sandfire, which operates the DeGrussa copper-goldmine near Meekatharra, reported net profit after tax of $72.3 million in fiscal 2020, down from $104 million in FY19.

It comes despite a record operational performance at DeGrussa, which produced 72,238 tonnes of copper and 42,263 ounces of gold in the 12 months to June 30.

The strong output boosted sales revenue by 11 per cent, from $592.2 million to $656.9 million.

Sandfire's underlying earnings rose 13.4 per cent to $414.4 million.

Managing director Karl Simich said FY20 reflected a consistent performance across the business.

"[Sandfire is] in an excellent position to take full advantage of the recent recovery in the copper price, which is already up by around 35 per cent from its COVID-19 lows, and unlock the potential of our building global development pipeline,” he said.

Mr Simich said the business would provide firm details and timelines around some of its key offshore development projects over the next few months.

That includes feasibility study results for its T3 copper-silver development project in Botswana and Black Butte copper project in the US.

Sandfire is also due to announce a maiden resource for it A4 Dome discovery, close to its T3 project.

The company ended the financial year with a cash balance of around $291 million and zero debt, enabling it to declare a final, fully-franked dividend of 14 cents per share.

It brings the full year payout to 19 cents.

Sandfire shares closed down 1 per cent to trade at $4.81 each.