Sandfire Resources has extended high-grade polymetallic sulphide mineralisation at its La Juliana prospect in Spain, with drilling confirming 160 metres of strike and electromagnetic surveys indicating potential for at least 350 metres. The exploration result arrived alongside a steady first-quarter operating performance, with FY27 guidance retained.
- 22.5m at 15.4% zinc and 30.0m at 10.1% zinc from follow-up holes
- Mineralisation confirmed over approximately 160m of strike
- Downhole surveys indicate potential extension to at least 350m
- Q1 group copper equivalent production reached 38.9kt
- FY27 production, cost and capital expenditure guidance retained
La Juliana drilling expands the exploration prize
Sandfire Resources Ltd (ASX:SFR) has turned a promising discovery near its MATSA mining complex in Spain into a more substantial exploration story, with follow-up drilling at La Juliana intersecting thick zones of high-grade polymetallic massive sulphide on both sides of the original discovery hole.
Three of the new holes delivered the strongest results. CCM-91 intersected 22.5 metres at 0.9% copper, 15.4% zinc, 3.8% lead, 0.7 grams per tonne gold and 85.2 grams per tonne silver from 310.5 metres. CCM-92 returned 22.2 metres at 1.0% copper, 12.0% zinc, 3.8% lead and 127.4 grams per tonne silver from 415.8 metres, while CCM-94 produced 30 metres at 0.4% copper, 10.1% zinc, 4.9% lead, 0.9 grams per tonne gold and 114.4 grams per tonne silver from 323 metres.
The results have confirmed approximately 160 metres of mineralised strike. Downhole electromagnetic surveys suggest the massive sulphide body could extend across at least 350 metres, while the broader prospective geological corridor may run for up to 2 kilometres. Those figures remain interpretations from early-stage drilling and geophysics, not a mineral resource or reserve estimate. The reported intervals are downhole lengths and true widths are not yet known.
Second rig planned for MATSA exploration
La Juliana sits about 700 metres south-east of the Castillejitos orebody within the Aguas Teñidas operation, close to existing underground development and processing infrastructure. Sandfire said it would accelerate step-out drilling, conduct further electromagnetic work and mobilise an additional rig in the second half of FY27 to test the system’s scale, continuity and possible transition into more copper-rich zones.
The exploration result is particularly notable because the same drilling campaign also produced weaker outcomes. CCM-93 intersected 8.6 metres of lower-grade sulphides, while CCM-95 encountered trace sulphides, although its electromagnetic response pointed to a conductor below and to the west that was subsequently tested by CCM-92. Gold assays and the electromagnetic survey for CCM-92 are still pending.
Q1 production tracks the FY27 plan
Operationally, Sandfire produced 38.9kt of group copper equivalent in the September quarter, equal to 25% of the midpoint of its FY27 guidance. MATSA contributed 22.7kt and Motheo in Botswana delivered 16.1kt, with Motheo operating at its targeted 5.6 million-tonne annualised processing rate. The company retained its group production, cost and capital expenditure guidance.
Sandfire reported unaudited sales revenue of US$480 million and underlying EBITDA of US$272 million for the quarter, implying a 57% underlying EBITDA margin. Net cash was US$342 million at 30 September, down from US$353 million three months earlier after the company returned US$117 million to shareholders through its first fully franked dividend in four years.
Costs and energy remain the operating variables
MATSA’s underlying operating unit cost rose to US$95 per tonne, with the company citing a maintenance cycle, energy markets and the euro-US dollar exchange rate. It expects cost performance to improve as the exchange rate retraces and maintenance work is completed. Motheo’s unit cost fell to US$48 per tonne and its implied C1 cost was US$0.65 per pound, helped by negative treatment and refining charges and capitalised waste stripping.
That cost performance is not entirely insulated from market conditions. Sandfire said Motheo’s cost guidance assumes diesel prices return to pre-conflict levels in the second half of FY27, leaving fuel prices an explicit risk to the outlook. Dedicated solar facilities at MATSA and Motheo are scheduled to commission or ramp up during FY27, with Motheo’s 21MW facility expected to supply about 30% of the operation’s annual stationary power requirements once operational.
Bottom Line?
La Juliana is an encouraging near-mine discovery with potentially valuable infrastructure advantages, but its investment significance still depends on true widths, pending data and enough drilling to support a resource estimate.
Questions in the middle?
- Will pending CCM-92 geophysics and assays confirm the suspected western extension of the mineralised system?
- Can further drilling convert the interpreted 350-metre-plus strike into a coherent resource near existing MATSA workings?
- How resilient will Motheo’s FY27 cost guidance prove if diesel prices remain elevated?