Morningstar

Morningstar, Inc.

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Sandfire is a mineral exploration and development company based in Western Australia. The principal asset is the DeGrussa copper project, discovered in 2009 and located 900 kilometres north-east of Perth in the Bryah Basin. Production began in fiscal 2012 and has built to about 70,000 tonnes of payable copper annually at a cash cost of about USD 1.00 per pound after the gold byproduct credit. Sandfire is a relatively low-cost producer, but reserve life of less than five years precludes a moat. A…

Sandfire Resources' first-half fiscal 2019 net profit after tax fell 19% to AUD 48 million versus AUD 60 million a year ago. The decline was largely driven by lower copper prices and doubling of exploration expenditure. The weaker AUD/ USD exchange rate and stronger gold price were partial offsets. Production from the DeGrussa mine was solid, with copper and gold production growing 10% and 15%, respectively, on last year. We expect further improvement through 2019 as high-grade Monty ore is…

Sandfire Resources has approached small-cap ASX-listed Mod Resources, or Mod, to explore a potential acquisition. Prospective copper miner Mod hopes to develop its T3 deposit in Botswana. A prefeasibility study completed in early 2018 outlined aims to produce about 25,000 to 30,000 tonnes of copper a year for about 10 years from a 590,000 tonne copper resource.
Analyst: Matthew Hodge

Sandfire Resources delivered strong fiscal 2018 net profit of AUD 123 million, up 59% from fiscal 2017 and soundly beating our AUD 110 million forecast. The better-than-expected profit reflected higher fourth-quarter production and sales volumes, as well as an unexpected AUD 10 million benefit from provisionally priced copper. The latter benefit is just a timing issue and varies with fluctuations in the copper price. The realised copper price is typically finalised three months after sale of the…

We increase our fair value estimate for no-moat-rated Sandfire Resources by 5% to AUD 5.80 per share due to higher near-term copper prices. Our forecasts increase 8% to USD 3.02 per pound in fiscal 2018, 12% to USD 2.86 in fiscal 2019, and 11% to USD 2.61 per pound in fiscal 2020, declining to an unchanged long-term price of USD 2.30 per pound from fiscal 2022. As a result, our earnings forecasts are now AUD 0.69, AUD 0.80 and AUD 0.88 per share in fiscal 2018 to 2020, respectively, up from…

Australia

Sandfire Resources Limited is an Australian copper and gold producer. The Company's key asset is the DeGrussa Copper-Gold Mine located in Western Australia. Sandfire also has exploration assets targeting a range of commodities throughout Australia.

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