Sandfire Resources Ltd · ASX:SFR
Sandfire Resources — BMO Global Metals & Mining Conference 2017
37 slides from Sandfire Resources's conference presentation, Mar 1, 2017
Slide 1: A debt-free Australian copper-gold producer with a strong growth outlook
BMO Global Metals & Mining Conference, Miami, Florida 27 February – 1 March 2017 ► Consistent, low-cost production Karl Simich, MD and CEO ► Debt-free, growing free cash-flows ► Strong exploration and development pipeline A debt-free Australian copper-gold producer with a strong growth outlook
Slide 2: Important Information and Disclaimer
Important Information and Disclaimer 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 b
Slide 3: Introduction – Key Investment Points
Introduction – Key Investment Points ► ASX-200 Australian copper-gold producer – AU$1 billion market cap ► High-grade, high quality project portfolio – in Australia and USA ► Safe, consistent operational performance – spanning 5 years ► +300,000t of copper, 170,000oz of gold – revenues approaching U
Slide 4: Investment Highlights
Investment Highlights Market Capitalisation ASX Stock Market Index Issued Capital Dividends S&P 157.7M Shares 11c 5c ~$1.08B at $6.85 200 Cash and Deposits Debt FY16 Share Price 1HFY17 BOARD $107M $50M Nil $6.85 Derek La Ferla Non-executive Chairman 31 Dec 2016 31 Dec 16 31 Jan 16 16 Feb 2017 Karl S
Slide 5: Summary of Key Assets
Summary of Key Assets ► DeGrussa Copper-Gold Operations in Western Australia ► Ultra high-grade Monty Deposit (70%-owned) – Feasibility Study Q3 2017 on proposed new satellite mine ► Dominant 4,180km2 footprint in world-class Doolgunna VMS province – multi-pronged exploration programs underway ► Ext
Slide 6: Our Core Values
Value cost- consciousness Work with in feam communities members for mutual benefit ‘Act safely and welneere fo Attract and ; | retain the best environment people Foster technical excellence Reward and performance innovation Encourage teamwork, respect and integrity Page: 6
Slide 7: Financial Performance
Financial Performance Page: 7
Slide 8: Strong Financial Performance, Disciplined Capital Management
Strong Financial Performance, Disciplined Capital Management FINANCIAL FY 2013 FY 2014 FY 2015 FY2016 ► Strong financial performance throughout OVERVIEW: Revenue $507.3M $525.7M $548.6M $497.2M commodity price cycle Operating Cash-flow* $272.4M $249.5M $250.1M $166.5M Net Profit After Tax $88.0M $78
Slide 9: Strong First-Half Result Driven by Higher Prices, Lower Costs
Strong First-Half Result Driven by Higher Prices, Lower Costs ► Net profit more than doubled to $35.9M ► Sales revenue of $248.0M ► Strong cash-flow from operating activities of $96.7M ($112.8M prior to payments for exploration and evaluation expenses) ► DeGrussa Mine segment earnings before net fin
Slide 10: DeGrussa Copper-Gold Operations, Western Australia
DeGrussa Copper-Gold Operations, Western Australia Page: 10
Slide 11: DeGrussa Mine – Consistent, Reliable, Low-Cost
DeGrussa Mine – Consistent, Reliable, Low-Cost Sandfire’s cornerstone asset – a high grade, high margin copper-gold mine ► Location 900km north of Perth in Western Australia ► Production +300,000t Cu, +170,000oz Au to date +1.6Mtpa via long-hole open stoping ► Mining 40km of underground development
Slide 12: DeGrussa Mine – Consistent, Reliable, Low-Cost
DeGrussa Mine – Consistent, Reliable, Low-Cost Five successive years of consistent, safe and profitable production Milling rates maintained at 1.6Mtpa and recoveries targeted at ~92% (LOM) Decline development completed to LOM design: mine development now focused on level development Record f
Slide 13: Robust Underground Mine – All Lenses Now On Stream
Robust Underground Mine – All Lenses Now On Stream ► Mining rate set to continue at 1.6Mtpa ► Production now sourced from all four lenses (DeGrussa, C1, C4, C5) ► Blending of mine ore feeds allows process optimisation ► 40km of mine DeGrussa Underground Mine Tonnes (Mt) Copper (%) Gold (g/t) Contain
Slide 14: The Copper Market
The Copper Market 14
Slide 15: Tightening Copper Market – Driven by Disruption and Demand
Tightening Copper Market – Driven by Disruption and Demand Supply disruption is back…. ► Recent rally in copper driven by supply disruption (affecting ~10% of global supply) ► UBS forecasting deficit of ~500,000t for 2017 ► Demand also playing an important role, driven by Grid & Power and Appliances
Slide 16: Tightening Copper Market – Driven by Disruption and Demand
Tightening Copper Market – Driven by Disruption and Demand Chinese demand contines to strengthen…. China’s transition from an investment-led to a services-based market means more electrical appliances, more EV’s, and more renewable energy = greater consumption of copper wiring Source: Official Chine
Slide 17: The Emerging Opportunity in Copper – Latest Developments
The Emerging Opportunity in Copper – Latest Developments …as the supply side continues to tighten... ► Many analysts predicting copper supply deficit as early as this year ► Rising concerns over supply disruptions: - Strike action at Escondida Mine in Chile, the world's biggest copper mine, over wag
Slide 18: Exploration and Growth Pipeline
Exploration and Growth Pipeline Page: 18
Slide 19: An Outstanding Track Record of Growth through Exploration
An Outstanding Track Record of Growth through Exploration As at 8 November 2016: DeGrussa C4 and C5 Discovery DeGrussa / C1 Discovery First diamond hole DGDD-001 Monty JV Discovery intersects 53.2m at 17.3% Cu, 2.5g/t Au Discovery hole and 25.1m at 3.4% Cu and 1.6g/t Au Five high-grade, high-value V
Slide 20: Exploration – It’s in our DNA
Exploration – It’s in our DNA $8M Exploration Budget ► Underpinned by strong ongoing cash-flows, Sandfire has invested up to $30M a year in exploration for the past five years: - $20M at DeGrussa-Doolgunna (Western Australia) – FY2017 - $8M on our exploration initiative on Australia’s Eastern Seaboa
Slide 21: Doolgunna VMS Province – Exploration Overview
Doolgunna VMS Province – Exploration Overview ► Greater Doolgunna region: 1,600km2 including 65km strike length of prospective VMS lithologies ► Recent farm-in deal with Enterprise Metals (ASX: ENT) to earn up to 75% interest in tenements to the south ► New ground acquisitions and joint ventures ► A
Slide 22: Development Pipeline – Monty Deposit
Development Pipeline – Monty Deposit ► Sandfire is Manager of the Springfield JV – interests Sandfire 70% / Talisman 30% ► Ultra-high grade VMS deposit discovered mid-2015 10km ► Maiden JORC 2012 Indicated and Inferred Mineral Resource estimate * – 1.05Mt at 9.4% Cu, 1.6g/t Au: - 99,000t of copper,
Slide 23: Development Pipeline – Monty Deposit
Development Pipeline – Monty Deposit ► 16.42km2 Mining Lease Application lodged ► High-level studies completed ► Preferred box-cut location selected ► Feasibility Study well advanced – $3.9M (100%) budget: ► Metallurgical testwork for comminution and flotation ► Geotechnical and structural geology s
Slide 24: Springfield JV – Unlocking the Next Discovery Opportunity
Springfield JV – Unlocking the Next Discovery Opportunity ► Diamond drilling targeting potential depth extensions to the Monty deposit ► Ongoing down-hole electro- magnetic (DHEM) surveying of all deep RC and diamond holes ► Continued systematic aircore drilling over the Southern Volcanics ► Structu
Slide 25: Doolgunna Exploration – 100%-owned Ground
Doolgunna Exploration – 100%-owned Ground ► Extensive ongoing RC and aircore drilling focused on the Homestead area and Red Bore East prospect ► Seven geochemical targets being tested with RC drilling at Homestead ► Updated geological model through Homestead and Red Bore prospect in progress Page: 2
Slide 26: Australian Regional Exploration Projects
Australian Regional Exploration Projects Targeting world-class discoveries in Australia’s premier exploration provinces EXPLORATION: Northern Territory ► Active drilling by JV partners in Borroloola tenements EXPLORATION: Queensland Base Metals ► 2,400km² in Mt Isa-Cloncurry province ► 100km strike
Slide 27: NSW – A Significant Focus for East Coast Exploration
NSW – A Significant Focus for East Coast Exploration ► Significant land-holding in Lachlan Fold Belt ► Acquisition of Temora Project recently completed ► Focus on integrating different generations of data covering a known mineralised belt with historical mining ► Drilling planned at number of porphy
Slide 28: Queensland – Targeting World-Class Discoveries
Queensland – Targeting World-Class Discoveries ► Fertile geological province prospective for Tier-1 deposits – numerous targets for Broken Hill Type (BHT) and IOCG deposits ► Targeting areas of shallow cover – masks potential large systems but presents us with a great opportunity ► Limited explorati
Slide 29: Black Butte Copper Project
Black Butte Copper Project Page: 29
Slide 30: Investment in Tintina Resources – Black Butte Copper Project
Investment in Tintina Resources – Black Butte Copper Project ► 61% stake in copper development company Tintina Resources (TSX-V: TAU) – ~$24M invested to date ► Developing the Black Butte Copper Project, central Montana, USA ► Advanced, high quality copper project in stable jurisdiction: ► NI 43-101
Slide 31: Black Butte Copper Project, Montana: Key Facts
Black Butte Copper Project, Montana: Key Facts ► Located ~20 miles north of White Sulphur Springs ► Outstanding opportunity for Sandfire to work with Tintina and local stakeholders to assist in the development of a significant long-term copper mine using world best practice ► Potential investment of
Slide 32: Black Butte Copper Project, Montana: Key Facts
Black Butte Copper Project, Montana: Key Facts ► Located on private ranch land – land and water rights are leased to Tintina by local ranchers and farmers working together with the company to better their community ► Tintina founders included local geologists with a strong connection to the land ► T
Slide 33: Black Butte: Modern Mining at its Best
Black Butte: Modern Mining at its Best ► Very small surface footprint out of Sheep Creek Valley – will be 100% reclaimed ► Highly engineered underground mine ► Mine design, layout and geology ensures that water quality and quantity will be protected ► Stringent monitoring and approval process ► Recl
Slide 34: Black Butte: Modern Mining at its Best
Black Butte: Modern Mining at its Best above sea level One of the highest grade copper deposits being permitted and developed anywhere in the world UPPER ZONE Highly efficient modern 573 M lbs (260 kT) of copper; 2.8% copper grade underground mine (measured & indicated) utilizing single main acc
Slide 35: Summary – Positioned for Growth and Success
Summary – Positioned for Growth and Success ► Consistent low-cost production ► Strong balance sheet – net cash position ► Growing free cash-flows ► Committed to organic growth via exploration ► Unlocking the potential at Doolgunna ► Developing a growth pipeline for the future Sandfire is a high-marg
Slide 36: Thank you. Questions.
2017 BMO Global Metals and Mining Conference, Miami, Florida 27 February – 1 March 2017 Karl Simich, MD and CEO Thank you. Questions.
Slide 37: Mineral Resource, Ore Reserve and Mine Plan
Mineral Resource, Ore Reserve and Mine Plan Table 1 – December 2015 Comparison of the Underground Mine Plan, Mineral Resource and Ore Reserve Contained Copper Contained Gold DeGrussa Underground Mine Tonnes (Mt) Copper (%) Gold (g/t) (t) (oz) Mine Plan 8.1 4.4 1.7 357,000 443,000 Ore Reserve 8.0 4.4
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