The Sandfire (ASX:SFR) share price lifts on positive quarterly results

The miner and explorer’s shares are on the rise today.
The post The Sandfire (ASX:SFR) share price lifts on positive quarterly results appeared first on The Motley Fool Australia. –

Key points:

The Sandfire share price is up 1.1% this morning
The miner released its latest quarterly report today
Sandfire included in the benchmark S&P ASX-200 index

The Sandfire Resources Ltd (ASX: SFR) share price is finally taking off after the company released a positive December 2021 quarterly report this morning.

Despite revealing promising updates on its various projects, shares in the Australian miner and explorer had a shaky start in early trading before heading into the green. At the time of writing, the Sandfire share price is up 1.1% trading at $7.27 apiece.

Let’s take a closer look at Sandfire’s operations for the second quarter ending 31 December 2021…

Q2 FY22 results for Australian miner

Production guidance maintained but cost guidance increased at Degrussa site
“Maiden” mineral resource estimate completed at gold deposit project in Western Australia
Acquisition of MATSA mine to completed by 31 January
Construction of Botswana project continuing
Definitive feasibility study of Motheo site to be completed by fourth quarter
Legal challenges ongoing over USA Black Butte site.

What happened in Sandfire’s second quarter?

Sandfire’s big picture plans appear to be right on track with managing director and CEO Karl Simich saying the miner had “hit the ground running” this year.

Its acquisition of the MATSA Mining Complex in Spain (initially announced back in September) was approved by Spanish Government officials last month and is set to be completed by the end of January.

Simich said the merge would make Sandfire “the largest copper-focused base metal producers on the ASX, with high quality operations in Spain and Australia and an impressive growth pipeline and exploration portfolio that will drive our growth for decades to come”.

Sandfire and MATSA teams had been working together to combine and integrate operations, he said.

Looking more locally, Sandfire produced strong copper and gold results from its DeGrussa site in Western Australia. This is on track with the company’s guidance for FY2022.

Despite praise for the overall “operational, cost and financial performance” of the site, the company advised cost guidance was increased from $1.10 to $1.20/lb due to the price of fuel, shipping costs and trending inflation.

Back in December, an indicated 2.8 million tonnes grading 2.5g/t gold for 223,000 ounces of contained gold was obtained from Sandfire’s Old Highway Gold Deposit in WA.

What did management say?

Commenting on the results, Simich said:

Sandfire has hit the ground running in 2022 following an excellent December quarter for the group.

Sandfire’s inclusion in the benchmark S&P ASX-200 index towards the end of the quarter marked a fitting culmination to what was a transformational year for our business in 2021 and will put Sandfire on the radars of a much wider range of global investors.

Challenges ahead in 2022

In today’s release, Sandfire advised coronavirus challenges were still front of mind as the company prepared for the reopening of WA borders in early February.

Construction of its Botswana copper mine was progressing on schedule, while Sandfire was managing the transmission of the COVID variants.

The company said drilling at the Montana-based Black Butte project (in which Sandfire holds an 87% interest) was continuing with 4,000 metres already achieved and two extra drills implemented to boost completion.

Meanwhile, the company has experienced “legal challenges” over environmental concerns with the project.

Even though this not yet interfered with the development and construction of the site, and Sandfire “does not believe that the legal challenge has any merit”, the miner says interruption is still possible while a decision remains pending.

As of 31 December, the (unaudited) Group cash on hand was $1.65 million.

Sandfire share price snapshot

The Sandfire share price has increased 49% over the last 12 months.

Sandfire shares hit a 52-week-low of $4.45 in late January last year, the day before the company released its previous December quarterly report.

The company has a market capitalisation of around $2.97 billion at the time of writing and a price-to-earnings ratio (P/E) of 7.91.

The post The Sandfire (ASX:SFR) share price lifts on positive quarterly results appeared first on The Motley Fool Australia.

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Motley Fool contributor Alice de Bruin has no position in any of the stocks mentioned. 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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