Shares of gold and copper producer, Sandfire Resources NL (ASX: SFR), bucked off the broader sell down of the S&P/ASX200 (ASX: XJO) (Index: ^AXJO) to jump as much as 3.5% higher today following the release of its quarterly activities report this morning.
In an announcement to the ASX, Sandfire said gold and copper production totalled 10,150 ounces and 17,103 tonnes, respectively, during the three months to 31 March 2015.
Both figures represent a healthy increase over the prior quarter and take the miner’s year-to-date production to approximately 48,500 tonnes for copper and 27,900 ounces for gold.
Sandfire said copper production costs came in at $US1.11 per pound, in line with its year-to-date average. Pleasingly, full year production cost guidance is set at $US1.10 per pound, whilst Sandfire’s total production cost (which includes depreciation and amortisation) came in at $US1.63 per pound during the quarter – leaving a robust margin at current market prices.
At 31 March 2015, Sandfire’s debt facility stood at $125 million, with $5 million of repayments being made during the quarter. Total cash and deposits were $58 million.
Looking ahead, full year copper production is expected to be between 65,000 and 68,000 tonnes, whilst gold production is forecast between 35,000 and 38,000 ounces.
Whilst the mid-point of its range indicates copper production can be expected to be mostly flat on the prior year, cash costs could drop when Sandfire reports its 2015 full year results.
Indeed, in 2014 Sandfire achieved a C1 cash cost of $US1.18 per pound, whereas in the March 2015 quarter C1 cash costs were $US0.97 per pound – an 18% reduction.
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The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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