Sandfire Resources Maintains FY26 Copper Equivalent Guidance with Lower Half Forecast and Cuts Capex by $15M
Sandfire Resources reported a Q3 FY26 copper equivalent production of 34.5kt, bringing nine-month production to 106.5kt. Despite operational challenges, the group maintains its FY26 guidance but now expects to deliver in the lower half of the range, alongside a $15 million reduction in capital expenditure.
- Q3 FY26 copper equivalent production of 34.5kt, totaling 106.5kt for nine months
- Operational constraints at MATSA and delayed ore transition at Motheo impacted production
- FY26 copper equivalent guidance unchanged but expected in lower half of 149kt–165kt range
- Capital expenditure guidance reduced by $15 million to $225 million
- Net cash position improved to $76 million as of 31 March 2026
March Quarter Production and Operational Challenges
Sandfire Resources Limited (ASX:SFR) reported a Group copper equivalent (CuEq) production of 34.5 kilotonnes (kt) for the March 2026 quarter (Q3 FY26), contributing to a total of 106.5kt over the nine months to 31 March 2026. Production at the MATSA operation was impacted by unusually high rainfall and unplanned maintenance, resulting in a CuEq output of 21.7kt for the quarter and 68.0kt year-to-date. Meanwhile, Motheo delivered 12.8kt CuEq in Q3 FY26 and 38.5kt over nine months, with a delayed transition into higher grade ore despite record annualised ore mining and processing rates of 6.5 million tonnes and 6.1 million tonnes respectively.
The reduced throughput at MATSA led to a temporary increase in the operation’s underlying operating unit cost during the quarter compared to the first half of FY26, which had an outcome of $87 per tonne of ore processed. Sandfire’s unaudited net cash balance improved significantly to $76 million as at 31 March 2026, up $63 million from 31 December 2025, reflecting strong operating cash flow, tax instalments at Motheo, and cash payments related to the Havilah Resources transaction.
FY26 Guidance and Capital Expenditure Revision
The company maintained its FY26 Group CuEq production guidance range of 149kt to 165kt but now expects to deliver within the lower half of this range, which was originally set at plus or minus 5% of the midpoint of 157kt. MATSA is forecast to comfortably achieve CuEq production within the lower half of its 91kt to 101kt guidance, with the June 2026 quarter expected to align with the strong performance seen in June 2025. Motheo’s production is now expected at the bottom of its 58kt to 64kt range, with an anticipated strong increase in the June quarter as higher grade ore transition progresses and record mining and processing rates are sustained.
Underlying operating unit costs for FY26 are expected to remain materially aligned with guidance at $86 per tonne for MATSA and $44 per tonne for Motheo. However, Sandfire highlighted uncertainties related to the ongoing conflict in the Middle East, which could impact freight rates and other input costs, including energy-linked products, potentially affecting cost outcomes beyond FY26.
Capital expenditure guidance for FY26 has been reduced by $15 million to $225 million. This adjustment primarily reflects a slight delay in mobilisation and ramp-up activities at the Kalkaroo project and the timing of expenditure for the construction of a new tailings facility at MATSA.
Strategic Developments and Financial Position
Sandfire’s financial position strengthened with a net cash balance of $76 million as at 31 March 2026, supported by strong operating cash flows and strategic payments, including a $46.5 million cash payment to Havilah Resources following the execution of definitive transaction agreements. This follows the company’s earlier progress on the Kalkaroo Copper-Gold project earn-in agreement and a return to net cash in the first half of FY26, as detailed in their record H1 FY26 revenue and net cash position update.
Management will host a teleconference on 23 April 2026 to coincide with the release of the full March 2026 Quarterly Report, which will provide audited results and further operational insights.
Bottom Line?
Sandfire Resources’ operational performance in Q3 FY26 reflects weather and maintenance challenges, with guidance maintained but skewed to the lower half of the range and capital expenditure trimmed, underscoring the need to monitor external cost pressures and project timelines closely.
Questions in the middle?
- How will ongoing geopolitical tensions in the Middle East influence Sandfire’s freight and energy costs beyond FY26?
- What impact will the delayed ramp-up at Kalkaroo have on Sandfire’s medium-term production profile and capital allocation?
- To what extent can Motheo sustain its record mining and processing rates while transitioning to higher grade ore?
