Cobre’s Sierra Atacama turnaround reaches first cash-positive quarter

Sierra Atacama delivers its first cash-positive quarter

Cobre has put a measurable marker on its transformation from explorer to producer: Sierra Atacama generated positive operating cash flow in each of April, May and June, producing approximately US$1.62 million for the June quarter. Copper cathode output reached 879 tonnes on a 100% project basis, up from 771 tonnes in the March quarter, while leach recovery rose to 76% in June from 63% in January.

The figures come with an important accounting qualification. Cobre held a 42% interest in Sierra Atacama at 30 June 2026 and accounted for the project as a joint venture using the equity method, meaning the project’s revenue and operating result were not consolidated into the group’s financial statements. The operating statistics are unaudited management figures presented on a 100% project basis.

Group loss widens as acquisition and incentives reshape the accounts

Cobre reported a statutory loss after tax of A$15.6 million, compared with A$2.1 million a year earlier. The result included A$11.1 million of share-based payment expense, while Cobre’s share of Sierra Atacama’s equity-accounted loss was A$1.77 million. Cash at year end was A$19.8 million, up from A$4.6 million, although operating activities still consumed A$3.9 million across the full financial year as the Chilean investment and exploration programme absorbed capital.

The balance sheet now reflects a much larger business: total assets rose to A$104.3 million from A$42.7 million, while net assets increased to A$95.7 million. After year end, Cobre completed a further A$90 million placement at A$0.30 a share and said the funds would support increased ownership of Sierra Atacama, debt repayment, exploration, development and working capital.

Ownership and regional ore supply become the next tests

Cobre’s Chilean subsidiary had increased its Sierra Atacama ownership to approximately 54% by 31 August. The company also has a pathway to acquire a larger interest, including a control option that can be exercised by 31 December 2026 for US$12 million. Separately, agreements with two regional oxide miners are expected to supply 50,000 to 75,000 tonnes of ore a month at grades of 1.0% to 1.5% copper as deliveries ramp up from the December quarter. Cobre says this could add about 300 tonnes of monthly cathode production, but the forecast depends on the delivery and processing of that third-party feed.

The growth programme is substantial for an operation that has only recently demonstrated consecutive cash-positive months. Three rigs are working on a 40,000-metre drilling campaign aimed at converting the project’s foreign NI 43-101 estimate into a JORC-compliant Mineral Resource, expanding the open-pit oxide opportunity and testing the sulphide system beneath the existing mine. A plant upgrade to 1,500 tonnes a month is also planned, alongside underground development and staged starter pits.

Botswana preserves exploration exposure without the same capital burden

Cobre has not abandoned its Botswana portfolio. The company retains approximately 5,365 square kilometres in the Kalahari Copper Belt, with exploration principally supported by partners including BHP, Sinomine and Equinor. BHP’s Kitlanya earn-in can fund up to US$25 million of exploration, Sinomine is backing further Okavango drilling, and Equinor is collaborating on in-situ copper recovery work at Ngami. That structure allows Cobre to direct its own capital towards Sierra Atacama while retaining exposure to longer-dated exploration prospects.

For FY27, the central question is whether the early operational gains can survive the demands of scale. Cobre must lift and sustain production, clear the project’s remaining historical liabilities, convert the foreign estimate into a JORC resource and complete the ownership pathway, all while managing the dilution and execution risks that accompanied its expansion funding.