Sandfire Resources discloses March 2019 Quarterly Report; stock edges up

SFR

Sandfire Resources NL (ASX: SFR), based in West Perth, is engaged in the exploration, evaluation and development of mineral tenements and projects in Australia and worldwide. Its key interest lies in copper, silver, gold as well as volcanogenic massive sulphide deposits. On April 18th, 2019, the company released its March 2019 Quarterly Report comprising updates on operations, safety, guidance and costs, development and exploration.

Sandfire Resources recorded around 16,062t of contained copper (December 2018: 16,888 tonnes) and 10,921oz of contained gold were produced at a cash operating cost (C1) of USD 0.92/lb demonstrating maintenance of strong mine production and milling rates. The quarter turned out to be positive and strengthened the production guidance for FY2019 to 66-68kt Cu and 40-42koz Au at C1 ~USD 0.90.

Besides, the first stoping ore was delivered from the Monty Copper-Gold Mine, with Monty delivering 38,519t grading 3.74% Cu for the quarter. Grade from Monty is expected to increase from the June Quarter onward.

As for the Black Butte Copper Project in Montana, USA, the Draft Environmental Impact Statement (EIS) was released by the Montana Department of Environmental Quality for the public comment period. Subsequently, a Record of Decision (ROD) and Mine Operating Permit would be issued. Currently, the feasibility study for the project is underway and progressing well with a targeted completion timeline of mid-2019, while the company is working to update the mineral resource mine design and maiden Ore Reserve.

Sandfire Resources is undertaking multi-pronged exploration activities across its Greater Doolgunna Project (6,674 km2) with extensive aircore, reverse circulation and diamond drill programs advancing over the Morck Well and Enterprise Projects, supported by down-hole and surface electro magnetics (EM) surveys. The drilling was completed in the quarter on porphyry targets at Rain Hill, within the 100%-owned Temora Project in New South Wales.

Also, the Total Recordable Injury Frequency Rate (TRIFR) for the Sandfire Group at the end of March 2019 was 7.1.

The Company declared a Net Profit After Income Tax of $48.3 million for half year ending 31 December 2018, with revenue of $272.3 million. The company paid a dividend of 7 cents per share (fully franked) on 19 March’19.

During the concerned period, an earn in earn-in and joint venture agreement was signed with White Rock Minerals Ltd (ASX: WRM) over the high-grade zinc and precious metals volcanogenic massive sulphide (VMS) Red Mountain Project in Alaska, where the company has the right to earn up to 70% project interest. Recently on April 9th, 2019, the JV has announced plans to conduct a comprehensive field exploration in this year within the Company’s strategic 475 km² belt-scale regional tenement package.

Of late, on April 16th, 2019, Sandfire informed to have commenced aircore drilling along strike to the southwest of the De Grussa copper-gold deposit within Bryah Basin Project in the Gascoyne region, which is 100% owned by Alchemy Resources Limited (ASX: ALY). The drilling is designed to test a 40 km strike of the Karalundi sediments that host the De Grussa VMS copper-gold mineralisation. Besides, the diamond drilling at the Morck Well Project in Western Australia’s Bryah Basin was also completed and the Morck Well Joint Venture’s current spend stands at $ 9.4 million.

Sandfire Resources’ current market valuation is at AUD 1.14 billion with ~ 159.56 million outstanding shares. On Thursday, April 18th, 2019 (02:00 PM AEST), the SFR stock price is trending at AUD 7.335, up 2.88%. SFR’s YTD return stands positive at 11.41% with the company’s annual dividend yield at 3.65%.


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