Sandfire to pay off $50m DeGrussa debt

Copper-gold miner Sandfire Resources says it plans to use its strong cash position to pay off what remains of a $380 million facility it took out for construction of its DeGrussa mine in 2011.

Perth-based Sandfire said the $50 million outstanding balance would be paid off by the end of the month using some of its $107 million cash in the bank, a year ahead of its scheduled repayment date.

The company will retain an undrawn $85 million revolver facility and a $25 million working capital facility with ANZ Banking Group.

“With the DeGrussa operation continuing to deliver consistent, strong production and robust margins, the company is now ideally placed to take full advantage of stronger copper prices, with the elimination of our remaining debt also freeing up significant cash flow to pursue new growth initiatives and maximise shareholder returns,” managing director Karl Simich said.

“Sandfire enters the new year in a great position with a strong balance sheet, a world-class mine which continues to deliver consistently impressive results, and a quality growth pipeline both in Australia and North America.”

Sandfire also released its quarterly results today, showing an increase in copper production to 18,130 tonnes from 15,610t in the previous quarter, with gold production also up from 9,731 ounces to 10,183oz in the three months to December.

The miner maintained its production guidance for FY17.

Sandfire shares were 4.9 per cent higher to $6.31 each at the close of trade.