Global copper producer Sandfire Resources (ASX: SFR) has reported a Net Underlying Loss of $36.6 million in the six months to December 2023, based on Underlying Group EBITDA of $136.5 million.
Sandfire’s $1.9 billion acquisition of MATSA primarily accounted for depreciation and amortisation of $149.1 million and an underlying net finance expense of $32.7 million for the period.
Sandfire remains on track to increase Group copper equivalent (CuEq) production by more than 50% at its continuing operations over the two years to the end of FY2025 and has retained its production, cost and capital expenditure guidance for FY2024, underpinned by CuEq production of 63.2kt in the period and the continued mitigation of industry-wide cost inflation.
Sandfire CEO Brendan Harris commented:
“By delivering on our intentionally simple strategy and doing the basics well, we expect to return the business to profitability and pay down debt in the coming years.
“We reported an Underlying loss of $36.6M in the period on Underlying Group EBITDA of $136.5M as our MATSA mining complex in Spain, which was acquired for $1.9B in FY22, primarily accounted for depreciation and amortisation of $149.1M and an underlying net finance expense of $32.7M.
“While our Underlying loss increased by $17.2M in the period, Underlying Group EBITDA declined by a more modest $2.4M despite the cessation of processing activities at DeGrussa in May 2023 and its $80.8M contribution to Underlying Group EBITDA in the prior corresponding period.
“This was only possible because the commissioning and ramp-up of our newest mine, Motheo, contributed $49.6M to Underlying Group EBITDA in its first full six-months of operation.”
Mr Harris said Sandfire would continue to deliver in the second half of the year and focus on debt reduction.
“Looking to the full year, we have maintained production, cost and capital expenditure guidance, and remain well positioned to deliver more than 50% growth in copper equivalent production from continuing operations across the two years to the end of FY25,” he said.
“We have also made significant progress in our efforts to modernise the structure of the Group’s debt facilities by securing credit approval for a US$200M corporate revolver facility in early CY24.
“The establishment of this corporate revolver facility, which will increase the financial flexibility of the Group and significantly reduce our near term repayment profile, remains subject to the finalisation of documentation and satisfaction of conditions which are standard for a facility of this nature, both of which are expected to occur before the end of March 2024.
“This revolving debt facility is expected to have a maturity date of March 2026 and will be primarily used to repay the remaining $88M balance of MATSA Facility A.
“By delivering on our intentionally simple strategy and doing the basics well, we expect to return the business to profitability and pay down debt in the coming years.”
