PERTH (miningweekly.com) – Falling copper prices have resulted in producer Sandfire Resources reporting a softer interim period.
The ASX-listed miner on Tuesday reported a profit after tax of A$48.3-million, compared with the A$59.5-million in the previous corresponding period, with total revenue reaching A$272.3-million, compared with the A$277.4-million reported in the first half of 2018.
During the six months under review, 32 715 t of copper and 20 721 oz of gold were sold, compared with the 30 222 t of copper and 18 540 oz of gold sold in the previous corresponding period.
Sandfire MD Karl Simich told shareholders that the strong first-half performance demonstrated the strength and quality of the DeGrussa copper/gold project, in Western Australia.
“The DeGrussa operation has once again enabled us to post an impressive set of financial numbers. Even while global markets were impacted during the second half of last year by a series of events which destabilised commodity markets and significantly impacted equity values, we were able to delver what ranks as one of our best-ever combined operational and financial performances on a pound-for-pound basis, a very pleasing result.”
Simich said that the combination of continued strong concentrate production from DeGrussa assisted Sandfire to propel strong sales revenue, coupled with a significant reduction in unit operating costs, strong operating cash flows and robust bottom-line earnings.
“This combination of factors allowed us to continue to grow our cash holdings, which moved to A$179-million at the end of December, with ongoing significant investment during the period in our growth pipeline.”
The cash position at the end of the six-month period was after Sandfire spent A$72-million to take full ownership of the Springfield project, as well as after A$51-million in income tax payments, A$30-million in dividend payments to shareholders, and further investment in exploration and development work.
“With a debt-free balance sheet, we remain in an unparalleled position to continue to harvest cash while at the same time investing in the future growth of our business through exploration, new project development and potentially taking advantage of merger and acquisition opportunities where these make sense, and are value-accretive for our shareholders.”
Meanwhile, Sandfire is also expecting higher production over the next three years, with production at the Monty satellite mine now ramping up.