14/07/2021 - 12:00

Sandfire set for strong FY21 finish

14/07/2021 - 12:00

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Sandfire Resources has exceeded its copper production target for the recent financial year while reporting record sales revenue of $813 million, helped by buoyant prices.

Sandfire set for strong FY21 finish
The DeGrussa operations produced 70,845 tonnes of copper in the year to June 30. Photo: Sandfire Resources

Sandfire Resources has exceeded its copper production target for the recent financial year while reporting record sales revenue of $813 million, helped by buoyant prices.

Sandfire says its DeGrussa operation near Meekatharra has produced 70,845 tonnes of contained copper in the year to June 30, beating the company’s earlier guidance of 67-70,000t.

Unit operating costs were $US0.81 per pound, meeting the lower end of Sandifre’s forecast.

DeGrussa, which includes the nearby Monty deposit, also produced 39,459 ounces of contained gold, in line with guidance.

“DeGrussa is a wonderful asset, which has delivered safe, consistent and profitable production across nearly 10 years of operations,” managing director Karl Simich said.

“The low C1 cost allowed us to take full advantage of the very strong copper price, which persisted throughout much of the year, helping to drive a 24 per cent increase in sales revenue over the past 12 months to a record $813 million.”

Two record shipments with cargo values of more than $50 million – including the recent $65 million export to a customer in India – have contributed to Sandfire’s total unaudited sales for the full year.

That includes a $33 million pre-payment for a shipment that departed the Port of Geraldton earlier this month.

By comparison, Sandfire generated $657 million in sales revenue in FY20 and $592 million in FY19.

Its recent sales have been supported by a buoyant copper price, which has remained above $US9,000/t since April and exceeded $US10,000/t for the first time in mid-May.

The company’s unaudited cash at the end of June 30 (including the pre-payment) totalled $574 million, up from $291 million in FY20.

“Our ability to harvest significant cash from the DeGrussa operations has put Sandfire in an outstanding position for the future, giving us significant flexibility and optionality in terms of financing our future growth initiatives,” Mr Simich said.

“The most important of these in the short term is our exciting new Motheo copper mine in Botswana, where we secured the all-important mining licence award last week.

“This clears the way for full-scale construction to ramp up and ensures that we can maintain our development timeline of delivering first copper production in early 2023.”

He said Sandfire was also progressing an expansive exploration program in Botswana, Western Australia and NSW.

Further details of its annual performance will be outlined in a report scheduled for release on July 29.

Shares in Sandfire closed up 2.3 per cent on Wednesday to trade at $6.83.

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