Sandfire Resources Limited

Good morning everyone and welcome to our March quarterly call. Our executive team is here with me today for the Q&A and they're looking forward to the discussion. But before we start, I'd like to acknowledge the traditional custodians of the land on which we stand, the Whadjuk people of the Noongar Nation, as well as the First Nations peoples on the land of which SAMFIRE conducts its broader business. We pay our respects to their elders and leaders past, present and emerging. Starting with safety, our group risk decreased to 1.4 in the last quarter as we remain focused on eliminating high potential incidents and continue to embed our new way of working, the SAMFIRE way, which, as I've said before, will further strengthen our system of risk management and internal control. Despite unprecedented rainfall at both Matts and Mateo, we delivered robust production results during the quarter. And the impressive effort of our team has established the platform for a strong fourth quarter, ensuring we are well-placed to achieve group copper equivalent production guidance of 154,000 tonnes in FY25. If you've been monitoring the weather in southern Spain and Botswana and seen some of the images, I'm sure you'll agree this is a great outcome. At MATSA, given the modest 4% reduction in our milling rate in the March quarter, the delayed extraction of high-grade ore and the progressive loss of productivity that resulted from the persistent heavy rainfall, we now expect contained metal volumes to be strongly weighted towards the final quarter of FY25 for copper equivalent production of 95,000 tonnes, consistent with the target we set at the start of the year. We also expect a particularly strong increase in copper equivalent production at Mateo in the fourth quarter. As is the case for MATSA, our confidence is predicated on the knowledge that we have high-grade material either already on the ROMPAD or exposed for imminent extraction and with fully restored access to the A4 open pit and expect to have access to Stage 1, the T3 open pit, in the coming weeks. Our life of mine planning process has also indicated that copper equivalent production at Mateo should increase to 60,000 tonnes in FY26, with a smoother production profile in the medium term, bringing forward valuable cash flow and maximising NPD. Detailed FY26 guidance will be provided when we report our full year results in August. More broadly, we continue to focus on the things we can control. and we're still working hard to mitigate the broader impacts of inflation at our operations. At NAPSA, a marginally lower projected throughput rate for FY25 and unexpected strength in the Euro to US dollar rate has necessitated a modest 4% increase in our underlying operating cost guidance to $78 per tonne of ore processed, with the level of underlying expenditure increasing by a more modest $8 million, or 2%, to $355 million. Conversely, those underlying operating costs remain below guidance at $38 per tonne of all process, despite the level of disruption caused by the floods, and we've retained annual guidance at $39 per tonne. While I can assure you that we're not becoming complacent and are always looking for ways to safely and sustainably squeeze out every penny, the cumulative 1% increase in our forecast underlying costs relative to initial guidance for FY25 will be more than a respectable outcome given the myriad of challenges faced by our teams. I should also note that we've reduced guidance for total capital expenditure by $11 million, primarily to reflect timing differences at Mateo, and increased planned expenditure at Black Butte by $6 million to $18 million to reflect the expanded scope of the successful drilling program that is now nearing completion. So bringing this together, the proven resilience of our business and strong pricing for our metals delivered an unaudited group sales revenue of $283 million and underlying EBITDA of $126 million for a further $45 million reduction in net debt in the quarter to $243 million, bringing the cumulative reduction in net debt over the past 12 months to $238 million, equivalent to a run rate of around $60 million per quarter. Suffice to say, while we're being challenged and will continue to be, our talented team, high-quality operations and increasingly strong balance sheet leaves us well-placed to navigate and prosper in the currently volatile macroeconomic environment. And finally, before I go to questions, I did want to provide a quick update on the power outage that impacted Spain, Portugal and France just after 12.30pm local time yesterday. While the cause of the outage that temporarily shut down our operations is as yet unknown, I can confirm that power has been restored to Andalusia and we expect to commence a full restart of operations at the start of day shift today. Again, our team has managed the situation well, drawing on emergency generators to provide power to ancillary services as they safely evacuated our mines, which of course was the number one priority in the circumstances. With that, can we please go to questions? Thank you.

Thank you. If you wish to ask a question, please press Star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press Star 2. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Ben Moyens with Jarden. Please go ahead.

Thank you. Good morning, Brendan and Sam. I might just start with the retention of the fiscal 25 production guidance metrics please and I appreciate the courageous decision to keep them unchanged despite the numerous challenges that the business has faced at both assets year to date. So maybe just sort of teasing out some of the numbers there, it looks like you require about 17,000 tonnes of copper equivalent in bots and about 26 at MATSA for the final quarter. So firstly, Mateo, just back calculating, it looks like you need a grade of about 1.2% to 1.25% copper, which would be a material step up, and retention of those recoveries about 94%. Note in your introductory comments about having a lot of high-grade ore on the ROM pad or open for imminent extraction, but maybe we can just explore just some of those metrics a little bit further and your confidence in those numbers, please.