Sandfire profit falls on copper prices

Copper and gold miner Sandfire Resources has reported a near-50 per cent fall in half-year profit, but shareholders will still receive an interim payout.

Sandfire’s profit fell 48.6 per cent to $15.7 million for the six months to December, with revenue down 12.8 per cent to $228.3 million.

In a statement, the company said the fall in profit reflected lower received copper prices during the half year, which was only partially offset by a lower $A exchange rate.

However, it declared a 2 cents per share interim dividend, fully franked.

“The cash flow generation of the DeGrussa copper mine segment, notwithstanding the lower copper price environment, enabled Sandfire to further reduce its debt while at the same time continue to fund capital development, as well as an aggressive exploration campaign predominantly focused on the high-grade Monty copper-gold discovery east of DeGrussa,” the company said in a statement.”

Managing director Karl Simich said DeGrussa continued to deliver strong cash flow despite a challenging business environment, and allowed the company to maintain a balanced approach to shareholder returns.

“We have maintained our commitment to an ongoing dividend stream to shareholders at a time when many resource companies have been forced to drastically reduce their dividend payments,” he said.

“At the same time, we were able to repay $45 million worth of debt while still investing strongly in our exploration and growth opportunities.

“This has reduced the outstanding balance of our debt facility to just $75 million at the December 31 balance date – ensuring that the company has a very strong balance sheet to fund future growth.”

For the second-half of the financial year, Mr Simich said the company was on track to achieve the upper end of its full-year production guidance range of between 65,000 tonnes and 68,000t of copper.

“At the same time, shareholders can look forward to a strong line-up of news flow, commencing with the publication of a maiden JORC resource estimate for the Monty deposit, scheduled for the end of March,” he said.

“Other upcoming milestones include a maiden ore reserve for the C5 deposit as part of our annual resource and reserve update, and the publication of a new life-of-mine plan for the next few years, which is expected during the June quarter.

“We are also continuing to step-up our exploration activities at DeGrussa-Doolgunna with work gathering momentum along the 5km long Monty corridor, at the Homer prospect and at other priority target areas within our overall 1,600 square kilometre tenement package.”

Sandfire shares closed 0.3 per cent higher to $5.95 each.