Sandfire Resources


June 19, 2021 FAT-AUS-1020

On track to hit the top end of 2021 guidance

Sandfire Resources has released its third quarter operational results, reporting a fall in its headline production numbers for the quarter and a rise in costs. Production guidance for 2021 was maintained, with Sandfire’s expectation of reporting toward the top-end of the range and it did provide an upgrade on cost guidance numbers for 2021. A snapshot of the balance sheet revealed no debt and a swag of cash. The following table is a summary of Sandfire’s March quarter operational results:

Source: Sandfire Resources

Overall, the March quarter result was, in our view and at best, a satisfactory one, with our view espoused on the positive changes to 2021 guidance numbers. Meanwhile Sandfire’s very strong balance sheet remains a key attraction.

The DeGrussa (Sandfire’s interest 70%) and Monty mines in Western Australia are Sandfire’s producing sites. As Members can see from the above table, copper production fell by 6.3% year-on-year (yoy), to 16,803 tonnes of copper. The following chart shows quarterly copper production:

Source: Sandfire Resources

A fall in the copper grade of milled ore to 4.6% copper compared to 5.0% from a year earlier was the key driver of the result. A partial offset was the reported rise in milled ore throughput by 3.4% yoy, to 395,671 tonnes on improved efficiencies. Both the DeGrussa and Monty mines deliver to the same processing plant.

Copper guidance for 2021 remained unchanged with a forecast in the range of 67,000 tonnes to 70,000 tonnes. A standout feature was Sandfire indicating that it expects copper production to come in toward the upper end of its 2021 guidance band. For 2020, Sandfire produced 72,238 tonnes of copper.

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