Sandfire (ASX:SFR) share price sinking despite record quarterly dividend

Copper prices hit multi-year highs on surging demand this year.

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The Sandfire Resources Ltd (ASX: SFR) share price is sinking in early trade, down 2.81%.

Below, we take a look at the highlights from the ASX 200 miner’s quarterly report.

Record final dividend paid during the quarter

The Sandfire share price is sinking in early trade despite the company recapping its record net annual profit of $170.1 million for the 2021 financial year (FY21).

The healthy profit saw Sandfire also pay out a record final dividend of 26 cents per share, 100% franked, during the quarter. That dividend was paid on 22 September.

The ASX 200 miner finished the quarter with $405.5 million cash on hand, after the US$100 million initial deposit for its US$1.87 billion (AU$2.57 billion) MATSA Mining Complex acquisition in Spain.

That complex includes 3 underground mines feeding a 4.7Mtpa central processing facility producing 100-120ktpa of copper equivalent (Cu Eq). According to Sandfire, this now makes it one of the largest copper-focused producers in Australia.

The transaction is fully-funded following a $1.25 billion fully underwritten equity raising and committed debt facilities.

After the quarter ended, Sandfire sold its 16% investment in Adriatic Metals Plc (ASX: ADT), delivering gross proceeds of $97 million.

Commenting on the MATSA acquisition and the quarterly results, Sandfire’s CEO Karl Simich said:

It is extremely rare to find a base metals asset that offers MATSA’s compelling combination of scale, grade, mine life and exploration upside, and I am delighted that we have been able to move so quickly and decisively to complete the acquisition and lock in the required debt and equity funding. This has been ranked as the largest all-cash deal ever done by an Australian miner, and it is a real credit to everyone involved.

And Sandfire had lots more than MATSA going on during the quarter.

Atop updates from its other mines, Simich added, “All of this has been achieved against the backdrop of another period of strong performance from the DeGrussa Copper-Gold Mine, which delivered another solid production and cost performance in line with guidance and continues to deliver outstanding operating margins.”

Looking ahead, Sandfire forecast its FY22 production will be within the range of 64-68,000 tonnes of contained copper and “at the upper end” of 30-34,000 ounces of contained gold.

The Sandfire share price may be under some pressure today after the miner said it expects its cash operating costs to come in towards the upper end of the range of US$1-$1.10 per pound.

Sandfire share price snapshot

Over the past 12 months the Sandfire share price is up 37%. By comparison the S&P/ASX 200 Index (ASX: XJO) is up 23% in that same time.

Sandfire shares are up 3% over the past month.

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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