The Sandfire Resources Ltd (ASX: SFR) share price is on the move in morning trade.
At the time of writing, the copper producer's shares are up 3% to $6.90.
Why is the Sandfire share price charging higher?
Investors have been bidding the Sandfire share price higher this morning following the release of an update on its performance in FY 2021.
According to the release, Sandfire has exceeded its annual copper production guidance for the 12 months to 30 June 2021.
The miner produced 70,845 tonnes of contained copper and 39,459 ounces of contained gold with a C1 unit operating cost of US$0.81 per pound of payable copper. This compares to its production guidance range of 67,000 tonnes to 70,000 tonnes and operating cost guidance of US$0.80 to $0.85 per pound.
A key driver of this outperformance was its strong finish to the year. During the fourth quarter, Sandfire achieved production of 18,252 tonnes of contained copper and 9,016 ounces of contained gold. This was achieved with a C1 unit operating cost of US$0.92 per pound of payable copper.
Management advised that this reflects another strong and consistent performance by the DeGrussa Operations in Western Australia. It notes that DeGrussa copper and gold production was above the upper end of its previously announced production guidance and its costs were at the low end of its guidance range for FY 2021.
This ultimately led to Sandfire recording a 24% increase in sales revenue in FY 2021 to $813 million.
Management commentary
Also giving the Sandfire share price a boost was management's positive commentary about FY 2021 and the future.
Sandfire's Managing Director, Karl Simich, commented: "DeGrussa is a wonderful asset, which has delivered safe, consistent and profitable production across nearly 10 years of operations. The 2021 Financial Year has maintained this enviable record, with copper production exceeding guidance at 70,845 tonnes and our C1 unit costs remaining exceptionally low at US$0.81 per pound."
"Importantly, our ability to harvest significant cash from the DeGrussa Operations has put Sandfire in an outstanding position for the future, giving us significant flexibility and optionality in terms of financing our future growth initiatives," Mr Simich added.
He explained: "The most important of these in the short term is our exciting new Motheo Copper Mine in Botswana, where we secured the all-important Mining Licence award last week. This clears the way for full-scale construction to ramp up and ensures that we can maintain our development timeline of delivering first copper production in early 2023."
Following today's gain, the Sandfire share price is now up 27% in 2021.
