DeGrussa’s longevity weighs on Sand­fire value

The West Australian - - WESTBUSINESS - Josh Chiat

A fix­a­tion on the DeGrussa cop­per mine’s life­span is af­fect­ing Sand­fire Re­sources’ mar­ket value, man­ag­ing di­rec­tor Karl Simich said yes­ter­day, de­spite an im­proved out­look for the base metal.

Cop­per hit 21⁄2-year highs of $US3.07 a pound as Sand­fire an­nounced a record 13¢ per share, fully-franked div­i­dend for the 2016-17 fi­nan­cial year.

But Mr Simich said ques­tions about per­mits for the Black Butte project in Mon­tana and an in­tense fo­cus on its lack of dis­cov­ery since the DeGrussa mine in the Mid West be­gan in 2012 was weigh­ing it down.

“(Sand­fire) con­trols col­lec­tively today around two mil­lion tonnes of cop­per and four mil­lion ounces of gold . . . only 350,000t are sit­ting in a mine plan and I think that’s all the mar­ket has given us value for at $US3/lb cop­per,” he said.

“I would think in a blink for Sand­fire to be trad­ing at $6.50 should be of no great mo­ment and we’re worth it ev­ery day of the week, if not more.”

Sand­fire closed up 20¢, or 3.6 per cent, at $5.78 yes­ter­day af­ter post­ing a $77.5 mil­lion an­nual net profit, up 62 per cent.

It pro­duced 67,088t of cop­per and 38,623oz of gold at cash op­er­at­ing costs of $US0.93/lb.

It has tipped 63,000-66,000t of cop­per and 35,000-38,000oz of gold this fi­nan­cial year at cash costs of $US1-1.05/lb.

DeGrussa is ex­pected to run out of ore within five years with­out a new dis­cov­ery.

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