Sandfire Resources has delivered net profits of $106.5 million for the 2019 financial year, marking the company’s second-best result in seven years of operations.
The return was backed by record copper and gold production levels. Although copper prices fell during the period, this was offset by a lower Australian dollar and reduced costs at the DeGrussa copper-gold operation in Western Australia.
Copper prices fell largely because of the escalating trade war between the United States and China and slowing global economic growth.
Sandfire managing director Karl Simich said the company delivered strong financial results despite troubles in the market because of the quality, grade, and consistency of its products.
“We maintained a strong year-end group cash position of $247.4 million after paying out $41.5 million in dividends, $82.1 million in tax and expending $154.0 million on mine property development and acquisitions and $57.0 million on exploration and organic growth – which reflects our willingness to continue to invest strongly in the growth and diversification of our business,” Simich said.
Sandfire has completed successful development and ramp-up of the Monty copper-gold mine.
“A key focus during the year was to strengthen and diversify Sandfire’s global development and exploration pipeline, expand our reserves base and build a credible longer-term growth strategy that centres on developing new mines that fit strategically with our corporate vision and our operational capabilities,” Simich said.
“On the other fronts, we are continuing to advance our multi-pronged exploration efforts in the Doolgunna region and we have increased our stake in Adriatic Metals to 12.78 per cent.”
Simich is optimistic about Sandfire’s future prospects. The company has made progress on permits for the Black Butte copper project in Montana in the United States.
The proposed acquisition of MOD Resources, scheduled for completion in late October this year, will add a third production hub around the T3 copper project in Botswana.
“With production for the 2020 financial year forecast to increase to 70,000-75,000 tonnes of copper and 38,000-42,000 ounces of gold, at a C1 cash cost of US$0.90-0.95 a pound, a debt free balance sheet and strong available liquidity we are in an exceptionally strong position at a time of significant opportunity in the global base metals sector,” Simich said.