On 30 January 2019, Sandfire Resources NL (ASX: SFR) has announced its December quarterly report. As at 31 December 2018, the Group’s cash on hand was $ 179.0 million (unaudited).
Operations Overview: Copper production for the December quarter stood at 16,888 tonnes, (over the prior quarter which was 17,924 tonnes). C1 cash operating costs for the December quarter stood at USD 0.85/lb, down from USD 0.89/lb in the September quarter.
Mine production for December quarter stood at 392,115 tonnes grading 4.67% Cu, with production sourced from all lenses at DeGrussa.
The company has reported that the solar farm is producing into the DeGrussa electrical network, providing on average 21.8% of the overall power usage for the December quarter.
FY19 Guidance: The company’s targeted copper production for FY19 remains unchanged. The company is anticipating that the copper production will be at the upper end of the guidance range of 63,000 – 67,000 tonnes of contained copper metal. The company also provided the guidance range of gold production, i.e., 37,000 – 40,000 ounces. The company has also lowered the guidance for headline C1 cash operating costs; now the company has anticipated that IT will be in the range of ~ USD 0.90 – 0.95 /lb.
Sales and marketing: In December quarter, the company has sold the total of 83,480 dry metric tonnes of concentrate containing 20,047 tonnes of copper and 13,345 ounces of gold. The company has completed 8 shipments in the quarter from Port Hedland and Geraldton and 13 for the 1HFY19.
In December quarter, the company has closed its oversubscribed Rights Offering. Due to this process, the company has raised C$ 18.9 million to fund ongoing permitting activities, the Feasibility Study and future development costs related to the Black Butte Copper Project. The company has subscribed for its full entitlement under the Rights Offer, due to that the Sandfire’s ownership has increased to 86% in the company.
The company’s growth pipeline has strengthened after the completion of the acquisition of Talisman Mining Ltd’s 30% interest in the former Springfield Joint Ventures. The Springfield project consists of the Springfield, Halloween and Halloween west projects and after the acquisition of Talisman now the company holds 100% interest in all three of these projects.
FY18 Financial Performance: In FY18, The Company’s sales were $596.24 million, (over the prior year which was $ 513.15 million). The Company’s net profit was $120.75 million, (over the prior year which was $ 75.02 million).
On Balance Sheet front, Net Assets was $532.05 million in FY18 (over the prior year which was $441.85 million).
As at 30 June 2018, the company had maintained the cash and cash equivalent of $ 243.37 million (over the prior year which was $ 126.74 million).
Looking at Sandfire resource NL’s stock performance and the return it has posted over the last few months, the stock has generated a negative return of 7.13% during the past six months. It is currently trading at $7.130, up by 3.33% (at the close of the market on 30 January 2019). The company has approx. 159.56 million shares outstanding with the market cap of circa $1.1 billion. The 52-week high and low for SFR are marked at $10.040 and $6.070 respectively.
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