Sandfire Resources (ASX: SFR) has released its financial results for the year ended 30 June 2024 ahead of an investor call commencing at 10.00am (AWST)/12.00pm (AEST).
Maintained a Total Recordable Injury Frequency (TRIF) of 1.6 (FY23: 1.6) thanks to an unrelenting focus on safety
Delivered a 47% increase in Group Copper Equivalent (CuEq) production from continuing operations to 133.5kt(a), which was 1.1% below the full-year guidance set in July 2023
Continued to mitigate the impacts of inflation with Underlying operating costs from continuing operations of $501M(b),(c) being 3.8% better than initial guidance
Reported a 40.1% increase in Underlying EBITDA to $362.2M and an Underlying loss of $5.5M for a Statutory loss of $19.1M as the near faultless ramp-up of Motheo underpinned a return to profitability in the June half year
Reduced net debt by $34.0M to $396.1M(d) at 30 June 2024 having significantly improved financial flexibility with the establishment of a $200M Corporate Revolver Facility and will remain disciplined as we seek to return the balance sheet to a net cash position
Established the platform to grow CuEq production by a further 13% in FY25 while maintaining a strong focus on costs, with Motheo’s Underlying operating (unit) cost expected to remain unchanged at $42/t of ore processed and MATSA’s Underlying operating (unit) cost expected to remain below initial FY24 guidance at $75/t of ore processed
Deferred a cumulative $40M of investment in FY24 with the optimisation of our waste stripping plans at Motheo and the broader rescheduling of the A4 open pit development, with total capital expenditure expected to remain elevated at $218M in FY25
Finalised a comprehensive five-year exploration plan that has been designed to deliver a significant increase in reserves at both MATSA and Motheo, with the expected 66.6% increase in the Group’s exploration expenditure in FY25 to be primarily directed toward active drilling programs
Sandfire CEO and Managing Director, Mr Brendan Harris, said:
“The transformation of our business continued to gather momentum in the last 12 months. We maintained our strong safety performance, closing the financial year with a Total Recordable Injury Frequency of 1.6, and we fundamentally changed the shape of leadership within the organisation with women accounting for more than 40% of our Board and Executive Leadership Team, and 32% of our senior leadership cohort overall.
“In early June, we released the findings of the external investigation we commissioned into the historical disturbance of artefact scatters at our now-closed Monty Mine in Western Australia. We remain focused on implementing the recommendations contained within this report, and working with the Yugunga-Nya to rebuild our relationship and ensure the Company delivers on the commitments embedded within our framework agreement.
“At an operational level, the near faultless ramp-up of Motheo in its first full year delivered a 47% increase in Group copper equivalent production to 133.5kt. Looking ahead, we expect Motheo to increase copper equivalent production by 31% in FY25 and generate strong free cash flow, given its Underlying Operations EBITDA margin of 57% in the June half year.
“At MATSA, a blockage in a paste fill line restricted access to higher grade ore in the Aguas Teñidas Western Extension in the second half of the year. As a result, copper equivalent production declined by 1% to 88.8kt in FY24, despite a general improvement in consistency and predictability that is expected to support a 4% increase in copper equivalent production in FY25.
“Collectively, the successful ramp-up of Motheo, record underground performance at MATSA and strong cost control more broadly, underpinned a 16% increase in sales revenue to $935M and a 40% increase in Underlying EBITDA to $362M. This included a return to profitability in the second half and a reduction in our net debt to $396M at year end.
“At a strategic level, our new exploration plan has been designed to establish a minimum 15-years of life at MATSA and Motheo within five years, while a targeted drilling program at Black Butte has identified additional high-grade intersections that are expected to enhance the project’s economics ahead of a final investment decision, which is anticipated in the next 18 to 24 months.
“As the most efficient conductor of electricity, we believe demand for copper will only grow as the world responds to the impacts of climate change. Supply, however, is becoming constrained as existing mines get older and deeper, costs continue to rise, and regulatory requirements expand. We are very well placed to deliver high quality metal concentrates into this increasingly tight market.
“Thank you to everyone on, or connected to, the Sandfire team for playing a role in our success. We have established the platform to grow Group Copper Equivalent production by a further 13% in FY25 and progressively return our balance sheet to a net cash position.”
