Sandfire Resources Ltd · ASX:SFR
Sandfire Resources — Macquarie Conference May 2015
34 slides from Sandfire Resources's conference presentation, May 7, 2015
Slide 1: Investor Presentation – May 2015
For personal use only Low-cost production Strong cash-flows and balance sheet Organic growth Investor Presentation – May 2015 Karl Simich, Managing Director and CEO
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation has been prepared by Sandfire Resources NL. This document contains background information about Sandfire Resources NL current at the date of this presentation. The presentation is in summary form and does not purport be all inclusive or complete. Recipien
Slide 3: Sandfire Overview
• Leading ASX-200 copper-gold producer Sandfire Overview For personal use only • 156M shares on issue; ~$800M market capitalisation • Low-cost, high-grade operations at DeGrussa in Western Australia • 4-5% Cu; bottom quartile C1 cash costs; mine life to 2021 • Consistent, reliable and safe productio
Slide 4: Key Financial and Corporate Data
Key Financial and Corporate Data Board Sandfire Resources NL (ASX: SFR) For personal use only Derek La Ferla Non-executive Chairman Corporate and Karl Simich Managing Director / CEO Financial W. John Evans Non-executive Director Overview Paul Hallam Non-executive Director Robert Scott Non-executive
Slide 5: Overview of key assets
Sandfire Resources NL Overview of key assets DEVELOPMENT For personal use only Black Butte Copper Project, Montana, USA (Tintina Resources – 36%) PNG EXPLORATION PRODUCTION Misima Porphyry Copper-Gold Project DeGrussa Copper-Gold Mine (WCB Resources – 38%) DOOLGUNNA EXPLORATION QUEENSLAND EXPLORATIO
Slide 6: Recent Highlights
Sandfire Resources NL: Recent Highlights Strong production, low costs and strong Australian Dollar copper price driving strong performance For personal use only Record mine production 1.7Mtpa rates sustained throughout Q3 FY 2015 ▲ Significant improvement in copper recoveries following process plant
Slide 7: Strong and Consistent Gold and Copper Production
Strong and Consistent Gold and Copper Production Track record of achieving guidance with excellent safety performance For personal use only Pleasing downward trend in C1 cash operating costs so far during FY 2015….. 7
Slide 8: Financial Overview
FINANCIAL OVERVIEW: FY 2013 FY 2014 1H FY 2015 Financial Sales Revenue $507.3M $531.2M $264.2M Performance For personal use only Operating Cashflow* $250.2M $249.5M $112.8M Key financial metrics Net Profit After Tax $88.0M $78.2M $30.6M Earnings Per Share 57.48c 50.22c 19.62c Analyst/broker coverage
Slide 9: Commodity Price & Exchange Rate
Commodity Price & Exchange Rate Fall in Australian dollar positive for DeGrussa operating margins For personal use only • DeGrussa is directly leveraged to AUD copper price per tonne • Cash costs & operating margins benefit from a lower currency • Sandfire’s value should correlate directly with the
Slide 10: Overview of key assets
Sandfire Resources NL Overview of key assets For personal use only PRODUCTION: DeGrussa Copper-Gold Mine, WA • 1.5Mtpa low-cost operation • FY 2015 65-68ktCu, 35-38koz Au; C1 ~US$1.10/lb • Mine life to 2021 NEAR MINE EXPLORATION: Greater Doolgunna • 1,700km² land-holding including Ned’s Creek, Talis
Slide 11: DeGrussa Copper-Gold Mine Snapshot
Sandfire – DeGrussa Copper-Gold Mine Snapshot A premier copper-gold mine producing strong and consistent operating cash flows For personal use only DeGrussa Project – Key Facts +1.5Mtpa via long-hole open stoping Mining 27km of underground development completed to date Underground 9.6Mt @ 4.4% Cu an
Slide 12: DeGrussa Mine – Underground Development and Mining
• Underground mining rate DeGrussa Mine – Undergound Development and Mining recently exceeded 1.7Mtpa Underground mine continuing to perform strongly • Current production from For personal use only DeGrussa and C1 deposits • C4/5 Decline development well advanced with first production from C4 in FY2
Slide 13: Processing and Production
Processing and Production DeGrussa Concentrator operating well with optimisation programs continuing For personal use only • $14M of process improvement projects completed: • Pebble crusher and SAG mill classification screen installed and commissioned • Immediate improvement to grind size and millin
Slide 14: DeGrussa Solar Power Initiative
DeGrussa Solar Power Initiative Renewable energy project with potential to reduce costs and CO2 emissions For personal use only • Proposed DeGrussa 10.6MW solar power station to be fully integrated with existing 16MW diesel-fired power station • $40M project being led by juwi Renewable Energy on Bui
Slide 15: Dominant Position in an Emerging VMS Province
Dominant Position in an Emerging VMS Province Consolidating a strong position in Western Australia’s emerging Bryah Basin For personal use only • Only operating base metals processing plant in the region (1.5Mtpa DeGrussa Concentrator) • Outstanding organic growth potential: 65km strike length of pr
Slide 16: DeGrussa Exploration – Focus Remains on Mine Corridor
DeGrussa Exploration – Focus Remains on Mine Corridor +30km long mine corridor offers outstanding potential for discovery of new VMS lenses or clusters For personal use only +30km mine corridor prospective for VMS mineralisation 150m • Extensive, systematic shallow aircore drilling completed over th
Slide 17: Underground Exploration – A Major Growth Focus
Underground Exploration – A Major Growth Focus • Major underground exploration program For personal use only continuing targeting near- mine and lateral extensions, potential new discoveries • In-fill drilling of C4 complete resulting in maiden Ore Reserve (2.0Mt @ 4.5% Cu and 1.5g/t Au) • In-fill d
Slide 18: Conductor – Recent High-Grade Copper Intercepts
Conductor 5 – Recent High-Grade Copper Intercepts For personal use only Outstanding results from recent in-fill drilling demonstrates exceptional grade and robustness of the C5 deposit 18 18
Slide 19: A Multi-Pronged Campaign to find the Next DeGrussa
Doolgunna –Doolgunna Completed Drillholes FY2015 A Multi-Pronged Campaign to find the Next DeGrussa Extensive programs of geophysics, Aircore/RAB, RC and diamond drilling across multiple target areas For personal use only • Focused, multi-disciplined exploration program • $20 million annual budget (
Slide 20: Priority Activities and Target Areas
Doolgunna –Doolgunna Completed Drillholes FY2015 Priority Activities and Target Areas New phase of exploration gathering momentum over the next few months • 34km HiSeis seismic data For personal use only acquisition program commenced April 2015 over DeGrussa Mine Corridor with results due June: • 2
Slide 21: Priority Activities and Target Areas
Doolgunna –Doolgunna Completed Drillholes FY2015 Priority Activities and Target Areas New phase of exploration gathering momentum over the next few months For personal use only • Extensive aircore and surface FLEM completed over Talisman JV with deep diamond drilling planned at: • Off-hole conductor
Slide 22: Priority Activities and Target Areas
Doolgunna –Doolgunna Completed Drillholes FY2015 Priority Activities and Target Areas New phase of exploration gathering momentum over the next few months For personal use only • Extensive aircore and surface FLEM completed over Talisman JV with deep diamond drilling planned at: • Off-hole conductor
Slide 23: Doolgunna Compared with Global VMS Camps
Doolgunna Compared with Global VMS Camps Doolgunna is at an early stage in its discovery history For personal use only • Most significant VMS deposits occur in clusters that define major mining camps – major source of global copper, zinc, lead production, eg: • Bathurst (New Brunswick) – 229.8Mt @ 0
Slide 24: Australian Regional Exploration Projects
Australian Regional Exploration Projects Targeting world-class discoveries in Australia’s premier exploration provinces EXPLORATION: For personal use only Queensland Base Metals • 2,300km² in Mt Isa-Cloncurry province • 100km strike length with outstanding potential for Broken Hill/Cannington-style
Slide 25: Australian Regional Exploration Projects
Australian Regional Exploration Projects Targeting world-class discoveries in Australia’s premier exploration provinces EXPLORATION: For personal use only Queensland Base Metals • 2,300km² in Mt Isa-Cloncurry province • 100km strike length with outstanding potential for Broken Hill/Cannington-style
Slide 26: Considered and targeted offshore growth opportunities
Sandfire Resources NL Considered and targeted offshore growth opportunities For personal use only DEVELOPMENT Black Butte Copper Project, Montana, USA • 36%++ stake in Tintina Resources (TSX-V:TAU) • PFS and permitting underway • M&I Resources of 533,600t of contained Cu EXPLORATION Misima Porphyry
Slide 27: Investment in Tintina Resources / Black Butte Copper Project
Investment in Tintina Resources / Black Butte Copper Project Sandfire leading ongoing evaluation and development of high-grade USA copper project For personal use only • 36% stake in Tintina Resources (TSX-V: TAU) with clear pathway to 53% and control: developing the Black Butte Copper Project, cent
Slide 28: Black Butte Project Overview
Black Butte Project Overview Pre-Feasibility Study commenced and permitting advancing in a considered and consultative manner • Three flat-lying sedimentary hosted copper deposits For personal use only • Very large sulphide system with thick pyrite units demonstrating the system size • District-wide
Slide 29: Investment in WCB Resources
Investment in WCB Resources Targeting a potential Tier-1 porphyry copper-gold discovery on Misima Island, PNG 38% stake in WCB Resources (TSX-V: WCB) with clear pathway to 54% with warrants For personal use only • • Key asset: earning a 70% interest in Misima Project alongside Pan Pacific Copper (PP
Slide 30: Investment in WCB Resources
Investment in WCB Resources Opportunity to participate in a potential Tier-1 porphyry copper-gold discovery on Misima Island For personal use only • Misima Porphyry target on Mt Sisa adjacent to historical gold deposit tested by Stage 1 scout diamond drill program (completed) • Five holes completed
Slide 31: Summary and Outlook
Summary and Outlook For personal use only • Consistent mining, development and production • Proven performer • Strong operating cash-flow • Relentless focus on reducing costs, enhancing performance • Excellent exposure to an improving AUD copper price • Outstanding exploration potential: at depth an
Slide 32: A premier copper-gold company
For personal use only Quality and consistency High grades, high margins, low costs Strong cash flows Organic growth Business development Shareholder returns A premier copper-gold company 32
Slide 33: Contact Details: Sandfire Resources NL
For personal use only Contact Details: Sandfire Resources NL Registered Office and Principal Place of Business Level 1, 31 Ventnor Avenue, West Perth, Western Australia 6005 T +61 8 6430 3800 F +61 8 6430 3849 www.sandfire.com.au 33
Slide 34: Mine Life Extension and Ore Reserve Update
Mine Life Extension and Ore Reserve Update Maiden C4 Ore Reserve and Mineral Resource additions extend mine life to mid-2021 For personal use only • Previously announced increases to high-grade Underground Mineral Resource incorporated into DeGrussa Mine Plan, extending mine life to mid-2021 • Maide