Sandfire Resources Ltd · ASX:SFR
Sandfire Resources — Q4 FY2022 Earnings Presentation
57 slides from Sandfire Resources's earnings presentation, Jul 28, 2022
Slide 1: June 2022 Quarterly Presentation
June 2022 Quarterly Presentation 28 July 2022 Access the live webcast of this presentation commencing at 10.00am (AWST) / 12.00pm (AEDT) at the link below: SANDFIRE WEBCAST
Slide 2: Important Information and Disclaimer
Important Information and Disclaimer This presentation has been prepared by Sandfire Resources Ltd (Sandfire or the Company) and contains information about Sandfire Key assumptions current at the date of this presentation. The presentation is in summary form, has not been independently verified and
Slide 3: Our Strategy
Our Strategy Execute Sustain and Grow Accelerate Align and Empower Optimise Capital Delivery Our Production Discovery Our People Strategy and Pipeline Engagement Our Values Honesty Respect Collaboration Accountability Performance 3
Slide 4: Where we operate
Where we operate Scale One of the largest copper-focused miners on the ASX Future-facing Producing Copper, a critical metal for a low-carbon future Growth Pivoting to new long-life mines in Spain, Botswana and USA Exploration Four world-class mineral provinces Operating Mines Development Phase Study
Slide 5: FY2022 Delivering growth
FY2022 Delivering growth In US$ (Unaudited) $922.7M Delivering Production Global Motheo $463.1M cash Sales revenue growth in and operating opportunities construction holding high-margin costs for near-mine advancing $543.9M production extensions Operations Net debt $324.7M FY2022: and new Capital Ex
Slide 6: FY2022 Group Production
FY2022 Group Production Copper Dominant Revenue Stream Q4 FY2022 FY2022 FY2022 Production: Production: Guidance: 10% 34,974t Copper 98,367t Copper 92-95kt Copper 22,880t Zinc 38,907t Zinc ~38kt Zinc 2,201t Lead 4,102t Lead ~3kt Lead 82% 9,075oz Gold 32,285oz Gold 30-34koz Gold 0.8Moz Silver 1.5Moz S
Slide 7: FY2022 MATSA Production
FY2022 MATSA Production Copper Dominant Revenue Stream FY2022 FY2022 Q4 FY2022 Production: Guidance: Production: 5 months 5 months 18,093t Copper 30,628t Copper ~27kt Copper 28% 22,880t Zinc 38,907t Zinc ~38kt Zinc 66% 2,201t Lead 4,102t Lead ~3kt Lead 0.7Moz Silver 1.2Moz Silver ~1.1Moz Silver Cont
Slide 8: FY2022 DeGrussa Production
FY2022 DeGrussa Production Copper Dominant Revenue Stream Q4 FY2022 FY2022 FY2022 Production: Production: 8% Guidance: 16,880t Copper 67,740t Copper 65-68kt Copper 9,075oz Gold 32,285oz Gold 30-34koz Gold 0.1Moz Silver 0.3Moz Silver ~0.3Moz Silver Contained metal 91% Contained metal Contained metal
Slide 9: Q4 FY2022 Cash Flow Waterfall
700 153.7 Q4 FY2022 600 Cash Flow 500 72.0 (80.1) (42.8) 463.1 Waterfall 400 390.5 (30.2) 300 In US$M (Unaudited) 200 100 - Opening Cash - 1 DeGrussa cash MATSA cash Growth Income tax Other Closing Cash - April 2022 from operating from operating 30 June 2022 activities activities 1. DeGrussa and MAT
Slide 10: FY2022 Cash Flow Waterfall
1,000 218.6 FY2022 800 Cash Flow 402.1 71.0 Waterfall 600 (258.7) (134.2) (42.4) 463.1 431.3 (75.6) In US$M (Unaudited) 400 (149.1) 200 - Opening Cash Net cash used DeGrussa MATSA cash Growth Sale of Income tax Dividends Other Closing Cash - - 1 July 2021 for the cash flows flows from Adriatic share
Slide 11: FY2023 Debt Facilities and hedging
FY2023 Debt Facilities and hedging MATSA Facility Motheo Facility pending Hedge Book • US$650M • Project Finance Facility nearing final • Copper – FY2023: 32,180t at • FY2023 repayments: documentation and credit approvals US$9,424/t (~25% above current September 2022 - US$118M • Based on T3 3.2Mtpa
Slide 12: Operations Review and Outlook
Operations Review and Outlook
Slide 13: Q4 FY2022 Health and Safety Snapshot
Q4 FY2022 Health and Safety Snapshot The safety, health and wellbeing of our people is integral to our success Continued focus on employee MATSA integration Total Recordable Injury and contractor health and Frequency Rate (TRIFR) wellbeing during the COVID-19 Underpinned by a safety improvement of 3
Slide 14: Q4 FY2022 Environment and Community Snapshot
Q4 FY2022 Environment and Community Snapshot Sandfire provided its first Sandfire continued its long- MATSA’s Mining Water Living Lab Early Childhood standing sponsorship of the Get Project commenced with the aim of Sponsorship for children in Into Resources Event held in researching and developing
Slide 15: FY2023 Group Guidance
FY2023 Group Guidance In US$ Production: FY2023 C1 Mine development Exploration, evaluation MATSA D+A 81-89kt~95% Cu unit costs: $80-95M and studies ~$225M 78-83kt~84% Zn ~$1.57/lb Cu Motheo construction $35-40M 6-10kt~90% Pb payable and development DeGrussa D+A $180-190M ~$16M 10-12koz~90% Au Corpo
Slide 16: FY2023 Group Operations Guidance Summary
FY2023 Group Operations Guidance Summary MATSA DeGrussa Motheo Group Copper (kt) 60-65 17-19 ~4-5 81-89 Zinc (kt) 78-83 - - 78-83 Lead (kt) 6-10 - - 6-10 Gold (koz) - 10-12 - 10-12 Silver (Moz) 2.0-3.0 ~0.1 ~0.1 2.2-3.2 Operating costs (US$/lb Cu) 1.63 1.39 see note 1 1.57 Capital expenditure (US$)
Slide 17: FY2023 Group Production Profile
FY2023 40,000 GROUP Production Profile 35,000 30,000 25,000 20,000 Copper and Gold Zinc 15,000 DeGrussa production MATSA lower Q1 on lower 10,000 scheduled to complete grade areas in mining October 2022 sequence, increasing to 5,000 ~85,000t annualised contained production rate from Q2 0 FY2023 Copp
Slide 18: FY2023 Production Pipeline and Discovery
FY2023 Production Pipeline and Discovery Motheo Copper Mine construction in Feasibility Studies Global exploration Botswana progressing on schedule • Definitive Feasibility Study (DFS) for the • Global opportunity focussed approach • Construction activities continued to ramp 5.2Mtpa Motheo expansion
Slide 19: MATSA Copper Operations
MATSA Copper Operations MATSA Operations Exploration • Aguas Teñidas Mine • Iberian Pyrite Belt tenure • Magdalena Mine • Sotiel Mine • 4.7Mtpa Processing Plant
Slide 20: MATSA Optimisation Stage
MATSA Optimisation Stage Optimise and implement our 5-year Plan Establish a base for multi- • Safety improvement – driving culture and • Near-mine Mineral Resource extensions decade operations accountability at existing mines • Group-wide in-person strategy and values • Focus on key drivers of value
Slide 21: Q4 FY2022 MATSA Production
t % 1,200,000 8.0 23.6 23.4 7.0 Q4 FY2022 1,000,000 6.0 MATSA Production 800,000 5.8 5.0 4.3 600,000 4.0 In US$ (Unaudited) 3.1 3.0 3.0 2.9 400,000 2.7 Production: Sales: Operations EBITDA: 2.4 2.3 18,093t Cu95% 17,033t Cu $51.6M 2.1 2.0 22,880t Zn83% 18,895t Zn Operations EBITDA 1.7 1.7 2,201t Pb86
Slide 22: FY2022 MATSA Production
t % 2,000,000 7.0 1,800,000 23.6 23.4 6.0 FY2022 1,600,000 MATSA Production 1,400,000 4.8 5.0 5 months to June 2022 1,200,000 4.0 3.8 1,000,000 In US$ (Unaudited) 3.0 800,000 2.9 2.7 2.7 2.5 2.5 Production: Operations EBITDA: 600,000 2.0 30,628t Cu95% $150M 1.8 1.9 38,907t Zn83% Operations EBITDA 1.
Slide 23: MATSA Ore Reserve & Mineral Resource
MATSA Ore Reserve & Mineral Resource Ore Reserve as at 30 April 2022 Class Mt Cu(%) Zn(%) Pb(%) Ag(g/t) Cu(Kt) Zn(Kt) Pb(Kt) Ag(Moz) Proved 26.2 1.7 2.7 0.8 38.3 442 707 208 32.3 Probable 10.9 1.4 2.5 0.7 30.7 151 268 78 10.7 Total 37.1 1.6 2.6 0.8 36.1 593 975 286 43.0 For details refer to ASX rele
Slide 24: FY2023 MATSA Production Guidance
t % 5,000,000 8.0 4,500,000 23.6 23.4 7.0 FY2023 4,000,000 6.0 MATSA Production 3,500,000 Guidance 3,000,000 5.0 2,500,000 4.0 4.0 In US$ (Unaudited) 3.4 2,000,000 3.0 2.7 Production: Capital expenditure: 1,500,000 2.2 2.2 2.4 60-65kt Cu~95% $80-90M Mine 2.0 78-83kt Zn~84% development 1,000,000 1.5
Slide 25: FY2023 MATSA Indicative Production Profile
FY2023 25,000 MATSA Indicative Production Profile 20,000 15,000 10,000 Copper Zinc Higher Q1 and Q3 Lower Q1 on lower grade driven by mine grades, areas in mining sequence, 5,000 lower end of production increasing to ~85,000t range Q2 and Q4 annualised contained production rate from Q2 0 FY2023 Copp
Slide 26: FY2023-2025 MATSA Rising Zinc Production
FY2023-2025 105,000 Increase in polymetallic ore MATSA Rising 100,000 mined grade Zinc Production 95,000 Increase in 90,000 polymetallic ore mined proportion 85,000 80,000 Mine scheduling sees rising Zinc production with the mining sequence moving from lower Zinc stockwork 75,000 zones into deeper m
Slide 27: MATSA Operating Costs
140.00 120.00 MATSA Operating Costs 100.00 80.00 In €M (Unaudited) 60.00 Operating costs guided for FY2023 are largely driven by accessing new mining areas, annual mining rate at 40.00 4.7Mpta and increasing zinc concentrate volumes post Q1 FY2023 (transport, treatment and refining costs) 20.00 0.00
Slide 28: MATSA Energy Costs
MATSA Spanish Power Prices Energy Costs 600 € /MWh 500 Historic spike in European Energy costs • Actual Electricity Price for 5 months to JUN22 was €252/MWh • EU approved Gas price cap for Spain and Portugal 400 • Savings are expected to be 10-15% to consumers, with latest forecast €180-280/MWh thro
Slide 29: FY2022 and FY2023 MATSA Unit Costs
Unit Cost Summary 5.0 23.6 23.4 FY2022 and FY2023 4.0 MATSA Unit Costs C1 cash cost buildup (US$/lb payable Cu) 3.0 0.79 0.72 0.93 0.84 0.29 2.0 0.21 0.26 0.24 1.45 0.73 1.81 0.731.63 0.65 0.68 1.0 In US$ (Unaudited) 0.94 1.19 1.16 1.17 1.29 - Volatility in reported C1 unit EUR inflationary cost cos
Slide 30: MATSA Infill and Mine Exploration R&R Growth and Extensional Targets
Magdalena MATSA Infill and Mine Exploration R&R Growth and Extensional Targets Concepcion FY2023 drilling program targeting R&R growth and near- mine extensions • 67,000m of infill drilling across the three mines to lift Resources to higher-confidence categories and drive conversion to Reserves • 36
Slide 31: MATSA Regional Exploration Potential
MATSA Regional Exploration Exploration Potential Testing regional exploration targets and enhancing our understanding of the basin • Four rigs active on testing exploration targets in Spain • Significant drilling program for FY2023, +30,000m of diamond drilling • Development of basin wide 3D structu
Slide 32: DeGrussa Copper Operations
DeGrussa Copper Operations DeGrussa Operations Exploration • DeGrussa Copper-Gold Mine • Doolgunna VMS Province • Monty Copper-Gold Mine
Slide 33: DeGrussa Continuing to deliver safely
DeGrussa Continuing to deliver safely Production Costs COVID-19 impacts and response Strong quarterly production despite • Continuing cost pressures reflect • Limited impact on copper production to date with industry labour shortages and rising inflation in the mining industry and low case numbers a
Slide 34: Q4 FY2022 DeGrussa Production
Q4 FY2022 t 500,000 8.00 % DeGrussa Production 450,000 7.00 6.6 400,000 6.00 350,000 5.00 300,000 In US$ (Unaudited) 4.1 250,000 4.0 4.00 3.5 200,000 Production: Sales: Operations EBITDA: 3.00 16,880t Cu96% 13,569t Cu $75.0M 150,000 9,075oz Au90% 6,734oz Au Operations EBITDA 2.00 79koz Ag70% 48koz A
Slide 35: FY2022 DeGrussa Production
FY2022 t % DeGrussa Production 1,800,000 7.00 1,600,000 6.0 6.00 1,400,000 5.00 In US$ (Unaudited) 1,200,000 4.2 4.3 4.00 1,000,000 3.5 Production: Sales: Operations EBITDA: 800,000 3.00 67,740t Cu96% 65,031t Cu $393.7M 32,285oz Au89% 28,618oz Au Operations EBITDA 600,000 3.8 2.00 297koz Ag70% 208ko
Slide 36: FY2023 DeGrussa Production Guidance
FY2023 t % 600,000 7.0 DeGrussa Production Guidance 6.4 6.0 4 months to October 2022 500,000 5.0 400,000 In US$ (Unaudited) 4.0 3.8 3.7 300,000 3.1 3.0 Production: Capital expenditure: 17-19kt Cu~95% $2.5M Mine 200,000 10-12koz Au~90% development 1.7 2.0 1.5 ~0.1Moz Ag~90% 1.4 1.5 Containedpayable 1
Slide 37: FY2022 and FY2023 DeGrussa Unit Costs
4.0 Unit Cost Summary 23.6 23.4 FY2022 and FY2023 3.0 DeGrussa Unit Costs C1 cash cost buildup (US$/lb, payable Cu) 2.0 0.60 0.60 0.57 1.39 In US$ (Unaudited) 1.25 1.18 0.20 1.0 0.16 0.13 0.42 C1 unit costs expected to rise marginally as activity 0.35 0.33 reduces towards end of mine life and hedged
Slide 38: Doolgunna VMS Province Exploration Testing deep targets
Doolgunna VMS Province Exploration Testing deep targets Drilling continues at the Doolgunna Deeps program • Airport South hole drilled to 1,370m and intersected minor copper mineralisation • A 1,043m hole at Talisman prospect return a 3m interval of disseminated and semi-massive chalcopyrite mineral
Slide 39: Motheo Copper Project
Motheo Copper Project Motheo Copper Mine Exploration • T3 Deposit Open Pit Development • Motheo Expansion Project • A4 Deposit Expansion Project • Kalahari Copper Belt tenure
Slide 40: Motheo Copper Project Building a world-class copper mine
Motheo Copper Project Building a world-class copper mine Development Sandfire intends to fund the 5.2Mtpa Motheo Expansion Case DFS development of the Motheo Copper remains on schedule for delivery in the • Budget growth of US$29.5M September 2022 Quarter: (9.5%) Mine through a combination of cash •
Slide 41: Motheo Copper Mine Development Timeline
Motheo Copper Mine | Development Timeline Mining License Approval & Land Titles Accommodation Village EMP Process Plant Engineering & Pre-Construction Works Accommodation Facility 132KV Powerline & Substations Design & Construction Process Plant Construction Mining Contractor Mobilisation & Establis
Slide 42: Motheo Copper Mine 3.2Mtpa T3 Construction & Development Capital
23.6 Motheo Copper Mine 70 $ 400 Millions Millions 3.2Mtpa T3 Construction 60 350 & Development Capital 300 50 250 40 In US$ (Unaudited) 200 Capital Forecast 30 • September 2021 $319.2M 150 • Estimated cost increase is $29.5M (9.5%): 20 100 • Diesel price increase by 40% ($12M) • Mining contract ris
Slide 43: Motheo Exploration Dominant position in an emerging belt
Motheo Exploration Dominant position in an emerging belt Near-mine and regional drilling underway • Drilling focused on the A1 Dome, 19km from the Motheo Copper Mine • Regional targets tested and T23 continues to return wide zones of low tenor copper mineralisation • First drill holes completed at t
Slide 44: Summary
Summary
Slide 45: Key Takeaways
Key Takeaways Strong growth platform Global vision Copper-dominant mining Our transformation into a diversified, operations in Spain and Australia international and sustainable mining generating strong operating cash- company flows New Production Hubs Strong Pipeline Refreshed and focused Group prod
Slide 46: A Global Miner poised for a new era of growth
A Global Miner poised for a new era of growth Scale One of the largest copper-focused miners on the ASX Future-facing Producing Copper, a critical metal for a low-carbon future Growth Pivoting to new long-life mines in Spain, Botswana and USA Exploration Four world-class mineral provinces Operating
Slide 47: Appendices
Appendices 23.6 23.4 Unaudited Appendix 1 Operating physicals – GROUP Appendix 2a and 2b Operating physicals – MATSA Appendix 3a and 3b Operating physicals – DEGRUSSA Appendix 4 Operating costs (US$) – GROUP Appendix 5 Operating costs (C1 US$/lb) – GROUP Appendix 6 Capital expenditure – GROUP Append
Slide 48: Appendix 1 Operating physicals - GROUP
Appendix 1 Operating physicals - GROUP 23.6 23.4 June 2022 Quarter (Actual) FY2022 (Actual) FY2023 (Guidance) MATSA DEGRUSSA MATSA DEGRUSSA MATSA DEGRUSSA MOTHEO (3 mths) (3 mths) TOTAL (5 mths) (12 mths) TOTAL (12 mths) (4 mths) (3 mths) TOTAL Ore mined (t) 1,128,724 442,164 1,570,888 1,880,936 1,6
Slide 49: Appendix 2a Operating physicals - MATSA
Appendix 2a 23.6 Operating physicals - MATSA 23.4 June 2022 Quarter (Actual) FY2022 (Actual) FY2023 (Guidance) AT MG ST AT MG ST AT MG ST MINED PROC MINED PROC MINED PROC (3 mths) (3 mths) (3 mths) (5 mths) (5 mths) (5 mths) (12 mths) (12 mths) (12 mths) Ore (t) - Total 497,150 517,847 113,727 1,128
Slide 50: Appendix 2b Operating physicals - MATSA
Appendix 2b 23.6 Operating physicals - MATSA 23.4 June 2022 Quarter (Actual) FY2022 (Actual) FY2023 (Guidance) Cu-CU Cu-Poly Zn Pb Cu-CU Cu-Poly Zn Pb Cu-CU Cu-Poly Zn Pb (3 mths) (3 mths) (3 mths) (3 mths) (5 mths) (5 mths) (5 mths) (5 mths) (12 mths) (12 mths) (12 mths) (12 mths) Recovery (%) 88%
Slide 51: Appendix 3a Operating physicals - DEGRUSSA
Appendix 3a Operating physicals - DEGRUSSA June 2022 Quarter (Actual) FY2022 (Actual) FY2023 (Guidance) DG MT DG MT DG MT MINED PROC MINED PROC MINED PROC (3 mths) (3 mths) (12 mths) (12 mths) (4 mths) (4 mths) Ore (t) 346,176 95,988 442,164 441,929 1,250,147 442,805 1,692,952 1,680,742 336,000 94,0
Slide 52: Appendix 3b Operating physicals - DEGRUSSA
Appendix 3b 23.6 Operating physicals - DEGRUSSA 23.4 June 2022 Quarter (Actual) FY2022 (Actual) FY2023 (Guidance) Cu Au Ag Cu Au Ag Cu Au Ag (3 mths) (3 mths) (3 mths) (12 mths) (12 mths) (12 mths) (4 mths) (4 mths) (4 mths) Recovery (%) 93% 47% 56% 94% 45% 58% 90% 46% 52% Concentrate (t) 71,986 287
Slide 53: Appendix 4 Operating costs (US$) - GROUP
Appendix 4 23.6 Operating costs (US$) - GROUP 23.4 Operating Costs June 2022 Quarter (Actual) FY2022 (Actual) FY2023 (Guidance) MATSA DEGRUSSA MATSA DEGRUSSA MATSA DEGRUSSA In US$M (Unaudited) TOTAL TOTAL TOTAL (3 mths) (3 mths) (5 mths) (12 mths) (12 mths) (4 mths) Mining 44 20 64 75 76 151 169 24
Slide 54: Appendix 5 Operating costs (C1 US$/lb) - GROUP
Appendix 5 23.6 Operating costs (C1 US$/lb) - GROUP 23.4 C1 Unit Costs/lb Cu June 2022 Quarter (Actual) FY2022 (Actual) FY2023 (Guidance) payable MATSA DEGRUSSA MATSA DEGRUSSA MATSA DEGRUSSA In US$M/lb (Unaudited) TOTAL TOTAL TOTAL (3 mths) (3 mths) (5 mths) (12 mths) (12 mths) (4 mths) Mining 1.16
Slide 55: Appendix 6 Capital expenditure - GROUP
Appendix 6 23.6 Capital expenditure - GROUP 23.4 In US$M (Unaudited) June 2022 Quarter (Actual) FY2022 (Actual) FY2023 (Guidance) MATSA DEGRUSSA MOTHEO MATSA DEGRUSSA MOTHEO MATSA DEGRUSSA MOTHEO (3 mths) (3 mths) (3 mths) TOTAL (5 mths) (12 mths) (12 mths) TOTAL (12 mths) (4 mths) (12 mths) TOTAL U
Slide 56: Appendix 7 Revenue and Operations EBITDA Margin
Appendix 7 23.6 Revenue and Operations EBITDA Margin 23.4 June 2022 Quarter (Actual) FY2022 (Actual) Commentary MATSA DEGRUSSA MATSA DEGRUSSA In US$M (Unaudited) TOTAL TOTAL (3 mths) (3 mths) (5 mths) (12 mths) Revenue: Value of payable metal sold 186 134 320 375 653 1,028 Includes QP adjustments &
Slide 57: Contact Details
Contact Details +61 8 6430 3800 +61 8 6430 3849 www.sandfire.com.au Corporate Head Office Level 2, 10 Kings Park Road West Perth WA 6005 Australia PO Box 1495 West Perth WA 6872 Australia