Sandfire Resources shares fall as Q2 copper output disappoints
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More news: Sandfire Resources shares lowered on the ASX as second-quarter copper output missed expectations.
Sandfire shares were down 1.2% to $9.64 by 1:50pm AEDT, having advanced more than 30% over the last 12 months.
RBC Capital Markets analyst Kaan Peker called its a "strong quarterly result", with zinc production in line with expectations and costs beating estimates.
Copper slightly missed forecasts, Peker noted, though Sandfire upgraded throughput guidance at its Motheo copper mine in Botswana.
The company's MATSA copper mine in Spain met consensus production estimates but costs were higher.
What they said: "Over FY25, the ramp-up at Motheo, and improved operational performance at MATSA should drive copper production and EBITDA higher," said Peker.
"Furthermore, with Motheo capex decreasing, we see [free cash flow] stepping up over FY25-26, significantly de-gearing the balance sheet."
Sandfire Resources slashes cost guidance at Motheo mine
The news: Copper and nickel miner Sandfire Resources reiterated its full-year production guidance, and reduced cost guidance at its Motheo copper mine in Botswana.
The numbers: Sandfire reported lower copper (-6%) and silver (-1%) production in the December quarter compared to the previous quarter, and higher output of zinc (8%) and lead (13%).
However, group copper equivalent production increased 5% to 75,100 tonnes for the first half, representing 49% of annual guidance, with volumes now expected to be marginally skewed to the second half of the financial year.
Sandfire also reduced cost guidance at Motheo by 7% due to "economies of scale" and a further contraction in treatment and refining charges.
The context: Sandfire said it is "increasingly confident" that it will be able to confirm an incremental increase in copper equivalent production at Motheo in FY26, as well as a smoother production profile in the medium term.
What they said: "From a strategic perspective, our five-year plan to materially increase reserves and increase the life of our MATSA and Motheo mining hubs continues to gather momentum, and a step-change in resource extension, near-mine and regional drilling activity is expected in the second half," said Sandfire CEO and managing director Brendan Harris.
The sources: ASX announcement, RBC Capital Markets research
