The DeGrussa copper-gold mine is set to be exhausted in 2022.

Sandfire profit falls nearly 19%

Tuesday, 19 February, 2019 - 15:22
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Sandfire Resources has reported a first-half profit fall of 18.8 per cent, which the gold and copper miner said was due to increased exploration and project costs.

The West Perth-based company posted a net profit of $49.5 million for the six months to the end of December, and its directors declared a 7 cent interim dividend, a cent less than its dividend one year prior.

It received revenue of $272.3 million, down from $277.4 million, from sales of 32,715 tonnes of copper and 20,721 ounces of gold.

That compared with 30,222t and 20,721oz in the last six months of 2018.

Its cash flow from operating activities for the first-half of this financial year was $121.9 million, compared with $122.4 million in the previous corresponding period.

It recorded exploration and evaluation expenses of $24.4 million, a rise of 51.6 per cent from the first-half of last financial year.

Sandfire said these costs primarily related to a feasibility study and environmental impact statement for the company’s 86 per cent-owned Black Butte Copper Project in the US, and exploration at its Greater Doolgunna project.

Greater Doolgunna encompasses Sandfire’s flagship DeGrussa copper-gold mine, which is set to be exhausted in 2022.

Sandfire managing director Karl Simich said the DeGrussa mine delivered what ranked as one of its best-ever combined operational and financial performances on a pound-for-pound basis.

“The combination of continued strong concentrate production from DeGrussa helped to propel strong sales revenue, coupled with a significant reduction in unit operating costs, strong operating cashflows, and robust bottom line earnings,” he said.

“This combination of factors allowed us to continue to grow our cash holdings, which moved to $179 million at the December 31 balance date with ongoing significant investment during the period in our growth pipeline.

“With a debt-free balance sheet we remain in an unparalleled position to continue to harvest cash while at the same time investing in the future growth of our business through exploration, new project development and potentially taking advantage of M&A opportunities where these make sense and are value-accretive for our shareholders.

“After what was a bumpy second half to last year for commodity markets, we remain extremely upbeat about the outlook for copper.”’

Shares in Sandfire closed trade at $7.76, a fall of 5.13 per cent.

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