Sandfire Resources: 4Q26 results: strong 4Q, but slightly weaker FY27 FCF outlook on costs, capex; downgrade to Neutral on valuation

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Sandfire Resources: 4Q26 results: strong 4Q, but slightly weaker FY27 FCF outlook on costs, capex; downgrade to Neutral on valuation

s. Copper equivalent (CuEq) production of 47.7kt came in 4% ahead J.P. Morgan Securities Australia Limited/ J.P.

of our estimate of 45.9kt, driven by a particularly strong MATSA performance Morgan India Private Limited

on record throughput alongside improved grades/recoveries QoQ. As a result, Zane Guo

MATSA unit costs of $86/t were 8% below our $94/t estimate, helped also by (61-3) 9633-4020

zane.guo@jpmorgan.com

a supportive EUR:USD (>90% of MATSA’s cost base is EUR-denominated). J.P. Morgan Securities Australia Limited

Motheo unit cost of $54/t was 17% above our $46/t on elevated price-linked

royalties, fuel cost increases and less deferred waste, along with higher A4 ore

proportion. Net cash finished the quarter ~5% above our expectations (working Key Changes (FYE Jun)

cap release), despite Group EBITDA of $343m printing ~4% below. Prev Cur Δ

Revenue - 26E ($ mn) 1,646 1,654 0.5%

• Outlook and projects. FY27 CuEq guidance of 150-166kt is broadly in line Revenue - 27E ($ mn) 1,946 1,892 -2.8%

with JPMe at 163kt prior to the update (we since move down to 158kt). Unit Adj. net income - 26E ($ mn) 359 345 -3.8%

costs are guided to rise only incrementally at both assets. Guidance assumes Adj. net income - 27E ($ mn) 542 487 -10.2%

Adj. EBITDA - 27E ($ mn) 1,190 1,096 -7.9%

elevated diesel through H1 FY27 and EUR:USD of 1.15. Capex is guided

~one-third higher YoY to over $300m. The drivers are accelerated Kalkaroo Half Yearly Forecasts (FYE Jun)

drilling, the Motheo T3 stage 4 cutback and a new MATSA tailings dam. Adj. EBITDA ($ mn)

Botswana's minimum mining tax rate rises 2.5% from 1 July 2026, a potential 2025A 2026E 2027E