Sandfire Resources Limited has delivered a strong H1 FY26 performance with record sales revenue and a return to a net cash position, while advancing key projects including the Kalkaroo Copper-Gold earn-in agreement.
- Record H1 FY26 sales revenue of $672 million
- Return to net cash position of $13 million from prior net debt
- Underlying earnings more than doubled to $107 million
- Progress on Kalkaroo Copper-Gold project earn-in and Black Butte PFS
- Sustainability initiatives include increased renewable energy use and community engagement
Strong Financial Performance Amid Operational Challenges
Sandfire Resources Limited has reported a robust set of financial and operational results for the first half of fiscal year 2026 (H1 FY26), underscoring its position as a leading copper and base metals miner. The company achieved a record sales revenue of $672 million, marking a 17% increase compared to the prior corresponding period. This growth was supported by buoyant commodity prices and high-margin operations, despite a slight 5% dip in copper equivalent production to 72.1 kilotonnes, which remains on track with full-year guidance.
Underlying earnings more than doubled to $107 million, reflecting strong cash conversion and disciplined cost management. The company also reported an underlying EBITDA margin of 45%, maintaining operational resilience amid inflationary pressures such as higher power tariffs and labour costs. Notably, Sandfire transformed its balance sheet, returning to a net cash position of $13 million as of 31 December 2025, a significant turnaround from $288 million net debt at the end of 2024.
Operational Highlights and Production Outlook
Sandfire’s two main assets, MATSA in Spain’s Iberian Pyrite Belt and Motheo in Botswana’s Kalahari Copper Belt, delivered solid performances. MATSA maintained an annual processing rate of 4.6 million tonnes, producing 46.4 kilotonnes of copper equivalent, representing 48% of the mid-point of annual guidance. Motheo processed 2.8 million tonnes, producing 25.7 kilotonnes of copper equivalent, with production weighted towards the second half of FY26 due to planned access to higher-grade ore at the T3 and A4 mines.
The company’s guidance for FY26 remains unchanged, targeting copper equivalent production between 149 and 165 kilotonnes. Operating costs are expected to be $86 per tonne at MATSA and $44 per tonne at Motheo, with capital expenditure increased slightly to $240 million to support ramp-up activities, including the Kalkaroo Copper-Gold project.
Advancing Growth Projects and Strategic Alliances
Sandfire continues to advance its growth pipeline, notably securing an exclusive right to earn an 80% interest in the Kalkaroo Copper-Gold project in South Australia through a staged earn-in agreement with Havilah Resources. The company plans to complete a pre-feasibility study (PFS) within 18 to 24 months, supported by a $10 million capital allocation in FY26 for initial ramp-up activities. The Kalkaroo project offers potential for a large, long-life, low-cost operation, with significant exploration upside in the surrounding Curnamona Province under a $30 million regional exploration alliance.
In the United States, Sandfire’s Black Butte Copper Project is progressing with a PFS confirming a strong economic case for development. The project is expected to produce approximately 35,000 tonnes of contained copper annually in its initial years, with further potential to extend mine life through the Lowry deposit.
Sustainability and Safety Commitments
Sandfire’s commitment to sustainability remains central to its operations. The company sources over 70% of its electricity from renewable sources, with new solar photovoltaic facilities under construction at MATSA and planned at Motheo. Safety performance improved, with the total recordable injury frequency rate (TRIF) reduced to 1.3, although the company continues to focus on mitigating high potential incidents.
Community engagement and social licence are priorities, with initiatives including establishing a community investment fund committing 0.5% of group EBITDA annually. Gender diversity targets are being met, with female representation increased to 26.4% overall.
Capital Discipline and Shareholder Returns
Sandfire’s capital management framework prioritises maintaining a strong balance sheet and optimising free cash flow. The company has paused shareholder dividends to build a more meaningful net cash position but remains focused on maximising total shareholder returns through disciplined investment in exploration, development, and potential share buybacks.
Looking ahead, Sandfire aims to increase copper equivalent production by 2% in FY26 and continue to reduce net debt. The company’s strategic focus on sustainable growth, operational excellence, and disciplined capital allocation positions it well to navigate market cycles and deliver long-term value.
Bottom Line?
Sandfire’s H1 FY26 results mark a pivotal step in its growth journey, balancing strong financial returns with strategic project advancement and sustainability commitments.
Questions in the middle?
- How will commodity price volatility impact Sandfire’s FY26 production and cost guidance?
- What are the key milestones and risks for the Kalkaroo Copper-Gold project pre-feasibility study?
- When might Sandfire resume shareholder dividends given its capital management priorities?