PERTH (miningweekly.com) – Copper miner Sandfire Resources has reported a fall in net profits for the full year ended June, on the back of lower copper prices.

Net profits for the 2019 financial year declined from the A$123-million reported at the end of the 2018 financial year, to A$106.5-million, despite record copper and gold production of 69 394 t of contained copper and 44 455 oz of contained gold.

C1 cash costs of $0.83/lb was also lower than the $0.93/lb reported in the previous financial year.

Copper sales for the full year increased from 60 247 t to 65 074 t of copper, while gold sales increased from 35 692 oz to 39 265 oz, resulting in sales revenues increasing from A$570-million to A$592.2-million.

“The quality, grade and consistency of the DeGrussa operation once again shone through with the project delivering its best-ever production performance in terms of key physicals and record low operating costs, underpinned by a focus on cost control and optimisation,” said Sandfire MD Karl Simich.

“This allowed us to post a net profit after tax of A$104-million, marginally below last year’s record results, while continuing to maintain impressively strong operating margins and cash flows.”

Sandfire maintained a strong year-end cash position of A$247.4-million, after paying out A$41.5-million in dividends, A$82.1-million in tax, and after spending A$154-million on mine property development and acquisitions and a further A$57-million on exploration and organic growth.

“A key focus during the year was to strengthen and diversify Sandfire’s global development and exploration pipeline, expand our reserve base and build a credible longer-term growth strategy that centres on developing new mines that fit strategically with our corporate vision and our operational capabilities.”

Sandfire in June this year announced the proposed acquisition of fellow-listed MOD Resources, which is developing the T3 copper project, in Botswana, while also advancing the permitting for its Black Butte copper project, in Montana.

The acquisition of MOD will be completed late in October and exploration activities in Botswana, along with the optimisation of the T3 feasibility study and its development, will start next year.

Looking at production expectations for 2020, Sandfire is expected to produce between 70 000 t and 75 000 t of copper and between 38 000 oz and 42 000 oz of gold, at a C1 cash cost of between $0.90/lb and $0.95/lb.