More cash=FY dividend? Reiterate Buy

Research evidence excerpt

More cash=FY dividend? Reiterate Buy

JunQ conference call

Key takeaways:

• FY27 Guidance has some conservatism built in. FY27 a “lower risk year

for Motheo”.

• Production across all four quarters to be relatively flat

• Cost inflation expected to be an “incremental” $1-2/t.

• Two shutdowns for Motheo in FY27: 2Q and 4Q

• No changes to the dividend policy

• Tax losses fully utlilised

FY27 Guidance

FY27 copper production guidance was broadly in line with consensus expectations, while

by-product guidance from MATSA was slightly stronger than anticipated. See Exhibit 6.

Sandfire is targeting a relatively flat production profile across the year despite planned

shutdowns at Motheo in 2Q and 4Q.

Consensus views FY27 guidance as incorporating a degree of conservatism, particularly

at Motheo. This reflects the strong FY26 exit run rate and the increasing contribution of

higher-grade ore from A4. Supporting this view, plant throughput has exceeded

expectations to date as A4 ore has proven softer than anticipated. However,

management noted that ore hardness is expected to increase with depth and that A4 is

inherently harder than T3, which is likely to place greater constraints on throughput as

mining progresses through the orebody. i.e. Motheo FY27 processing run rate guide

5.6Mtpa vs FY26 6.1Mtpa.

Against this backdrop, management reiterated that mine plan optimisation remains

focused on maximising net smelter revenue (NSR/t) rather than throughput alone,

suggesting value capture will continue to take precedence over volume growth in future

mine sequencing decisions.

No cost guidance yet, but Management indications point to modest inflation

The company will provide formal FY27 cost guidance alongside its FY26 results in

August.