The company closed 2016 with $A107 million in cash, and has elected to repay the $50 million balance of its revolver facility next week, around 12 months ahead of schedule.
The $380 million facility was secured in 2011 for the construction of the flagship DeGrussa copper-gold mine.
The operation had another strong quarter, producing 18,130 tonnes of copper and 10,183 ounces of gold at a low C1 cost of just US81c per pound, compared with 15,610t copper and 9731oz gold produced in the September quarter at $1.06/lb.
Sandfire managing director Karl Simich said the company was benefitting from the rise in the Australian dollar copper price over the past six months.
“With the DeGrussa operation continuing to deliver consistent, strong production and robust margins, the company is now ideally placed to take full advantage of stronger copper prices, with the elimination of our remaining debt also freeing up significant cashflow to pursue new growth initiatives and maximise shareholder returns,” he said.
“Sandfire enters the New Year in a great position with a strong balance sheet, a world-class mine which continues to deliver consistently impressive results and a quality growth pipeline both in Australia and North America.”
Sandfire’s focus for this year is to continue its aggressive exploration programs in the Doolgunna region of Western Australia, as well as on the east coast.
The company has a $28 million exploration budget for the 2017 financial year, including $20 million for Doolgunna.
The company will also continue to advance the Black Butte copper project in the US, which is subject to a lengthy permitting period.
“A key focus for the year will also be to bring the ultra-high grade Monty deposit, located 10km east of DeGrussa, into production as quickly and seamlessly as possible,” Simich said.
The feasibility study for Monty, discovered in mid-2015, is to be completed by the end of the current quarter.
“This will allow us, in conjunction with our joint venture partner Talisman Mining, to assess the optimum pathway to bring this high quality deposit into production,” Simich said.
Sandfire will retain the undrawn $85 million revolver facility and $25 million working capital facilities with ANZ, which will fund growth initiatives, including the Monty development.
Shares in Sandfire rose by 3.1% to $6.20.
