Sandfire records half-year loss

Sandfire Resources has recorded a loss after tax of $US53.9 million, equivalent to $82.1 million, with the $US1.9 billion acquisition of the Matsa mine in Spain cited as the primary reason for the depreciation.

The West Perth-based copper miner announced its results for the first half of the 2023-24 financial year, reporting an underlying loss of $US36.6 million, roughly equivalent to $A55.72 million.

In its half year results presentation, Sandfire reported a net debt of $US475.6 million but recorded $US110 million cash flow from its operating activities.

The company's ongoing projects include the Matsa mine operation in Spain and the Motheo copper project in Botswana, within the Kalahari copper belt.

Sandfire chief executive Brendan Harris said he expected to return the business to profitability and pay down debt in the coming years by delivering on the company’s simple strategy.

“We reported an underlying loss of $US36.6 million in the period on underlying group EBITDA of $US136.5 million as our Matsa mining complex in Spain, which was acquired for $US1.9 billion in FY22, primarily accounted for depreciation and amortisation of $US149.1 million and an underlying net finance expense of $US32.7 million,” he said.

“While our underlying loss increased by $US17.2 million in the period, underlying group EBITDA declined by a more modest $US2.4 million despite the cessation of processing activities at DeGrussa in May 2023 and its $US80.8 million contribution to underlying group EBITDA in the prior corresponding period.

“This was only possible because the commissioning and ramp-up of our newest mine, Motheo, contributed $US49.6 million to underlying group EBITDA in its first full six-months of operation.”

Production at Sandfire's DeGrussa mine in Western Australia ceased in May 2023 with the operation transitioned to care and maintenance in June.

In the company's half-year results presentation, Mr Harris noted the recent fallout with Traditional Owners at its DeGrussa mine site after the company failed to disclose the destruction of heritage sites at the project for more than five years.

Late last year, Sandfire admitted two unregistered Aboriginal heritage sites surveyed by Yugunga-Nya Traditional Owners were destroyed in 2017 and 2018, prior to the start of mining at the Degrussa project.

The sites were disturbed without permits and the incidents were not reported until 2023.

Sandfire has since struck a deal to work with the Yungunga-Nya people to regain trust, signing a framework agreement to map issues and ensure ongoing protection of cultural heritage at Degrussa.

“This agreement is an important step toward rebuilding our relationship with the Yugunga-Nya and ensuring the ongoing protection of cultural heritage at our DeGrussa operation,” Mr Harris said.

“Our decision to retain DeGrussa and rehabilitate the operation means we will maintain an important presence in the region for years to come.”

Sandfire was trading at $A7.34 a share, down 3.67 per cent as of 1.38pm AEDT today.