Sandfire’s DeGrussa copper-gold mine near Meekatharra.

Sandfire upbeat on year ahead

Tuesday, 30 August, 2016 - 10:38
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Copper and gold miner Sandfire Resources has posted a softer profit result for the 2016 financial year on the back of lower copper prices, but was upbeat on the year ahead.

Sandfire delivered a net profit of $48 million for FY16, down from $69 million achieved in the previous year, with revenue down from $548.6 million in FY15, to $497.2 million.

The company declared a final dividend of 9 cents per share, fully franked, taking its full-year payout to 11 cents a share.

About 68,600 tonnes of copper was sold during the year, along with 36,042 ounces of gold.

Managing director Karl Simich said the record production result and continued low operating costs helped offset continued weakness in the US dollar copper price.

“This was our best operating full-year performance in almost all areas of our business since DeGrussa started commercial operations four years ago,” he said.

“Amongst the many highlights for the year, we shipped our 1 millionth tonne of copper concentrate and passed $2 billion in product sales, all from a zero start four years ago – a tremendous result.

“The strong cash generation from DeGrussa has continued to provide a strong foundation for Sandfire, enabling us to achieve our key corporate objectives.”

Looking ahead, Mr Simich said the company’s production guidance remained consistent within a range of 65,000-68,000t of copper and 35,000-40,000oz of gold for FY16 at a cash cost of $US0.95-1.05/lb.

“With underground development now tailing off progressively at DeGrussa over the next two years, we expect to see growing free cash-flows being generated,” he said.

“This will put us in a position of growing strength and flexibility, with the optionality to either eliminate our debt completely and deploy more cash to shareholder returns or, should an attractive growth opportunity present itself, move quickly to take advantage of it.

“We also have a number of high quality organic growth opportunities in front of us, such as Monty, and we intend to bring these to account as soon as we possibly can.”

Sandfire shares were 1.5 per cent higher to $5.46 each at 10:30am.

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