Sandfire Resources DeGrussa Copper Mine. Picture: Michael Wilson/The West Australian.
Sandfire Resources' DeGrussa Copper Mine. Picture: Michael Wilson/The West Australian.

UPDATE 2pm: Sandfire Resources has posted a bottom line first-half profit of $33.5 million, down 57.6 per cent on the previous corresponding period.

The copper and gold miner attributed the result to depreciation and amortisation expenses amounting to $45.6 million and $14.2 million of additional exploration and evaluation expenses which were written off in line with its accounting policy.

Revenue was off 8.4 per cent to $249.6 million.

The company did not declare a dividend.

The result was based on metal sales totalling 30,098 tonnes of contained copper-in-concentrate and 14,437 ounces of gold.

Sandfire said it had $74.8 million in cash and deposits at the end of December.

Strong operating cash flow enabled it to complete repayments of $55 million against its project finance facility over the period.

About $230 million remained outstanding on the facility at the end of December, with a total of $100 million in quarterly repayments scheduled for calendar year 2014.

Managing director Karl Simich, said the company was on track for a strong second half financial performance, reflecting higher production levels for the March and June quarters in line with improving mined head grades and copper recoveries, and the improving commodity price environment.

"The first half marked the completion of our ramp-up to full production and the optimisation of the DeGrussa concentrator as we completed the campaign processing of transitional sulphide ore, which had previously restricted production levels," he said.

"This together with the deferral of a December shipment influenced the bottom line result, although it is important to note that our operating cashflow and underlying earnings remained strong.

"Our operations team has been working to optimise the remaining elements of the plant to ensure that we extract as much value as possible. This includes ongoing work to further lift our copper and gold recoveries and a concerted campaign to reduce costs and enhance margins.

"I am pleased to say that the fruits of this work are beginning to show through, and we have seen strong performance by the operation over the past six weeks.

"The completion of these programs will provide a powerful platform for continued improvement throughout the rest of the year."

Mr Simich said the company would ramp-up a range of drilling programs across its portfolio in the second half.

Shares in Sandfire closed down nine cents, or 1.45 per cent, at $6.14.

The West Australian

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