ASX 200-listed Sandfire Resources (ASX:SFR) has extended its MATSA Syndicated Debt Facility by 2 years for the MATSA Copper Operations in Spain.
The company reports unanimous approval by the international banking syndicate has led to the extension of the MATSA facility loan tenor to 31 December 2028, with a revised amortisation profile. This follows Sandfire’s first update to the MATSA Ore Reserve Estimate released to the Australian Securities Exchange (ASX) on 28 July 2022.
Sandfire says the initial US$650 million MATSA facility formed an integral part of its funding package for the acquisition of MATSA. Within the first 12 months of Sandfire’s ownership, the company says MATSA completed scheduled repayments totalling US$198 million.
The revised amortisation profile for the remaining US$452 million facility schedules repayments of US$20 million, US$46 million, and US$73 million for the June 2023 quarter, FY2024, and FY2025, respectively, against a previously heavily front-ended repayment profile.
Additionally, Sandfire intends to extend its copper forward hedging program for MATSA by a year into mid-FY2026, targeting around 30% of scheduled payable production. The MATSA hedge book was originally set with a 3-year horizon covering 30% to 40% of copper and zinc production, but Sandfire notes the additional forward hedging position will restore that horizon for copper to over 2.5 years.
Commenting on the extension, Sandfire Resources Chief Executive Officer (CEO) and Managing Director Brendan Harris says: “Today’s extension of the US$452 million MATSA Finance Facility highlights the confidence that our banking syndicate has in MATSA’s 3 mines and centralised processing facility and marks another important milestone for our business.
“We greatly appreciate the support of our international banking syndicate and the important role they play as we continue to transform Sandfire into a global copper producer of significance”
We greatly appreciate the support of our international banking syndicate and the important role they play as we continue to transform Sandfire into a global copper producer of significance.”
Sandfire reports other commercial amendments have been completed in line with the usual terms for a facility of this nature. The company says the facility is supported by the cash flow and security of MATSA, with no recourse to Sandfire. Additionally, documentation to amend and extend the MATSA facility was endorsed by the Sandfire board for execution following authorisation by the group’s wholly owned subsidiaries.
Sandfire says MATSA is a ‘substantial’ polymetallic mining complex comprising 3 underground mines and a 4.7-million-tonne-per-annum central processing facility.
The operation lies in the Huelva Province of southwestern Spain, utilising modern technology and infrastructure within an ‘extensive’ mineral resource and exploration base.
The company expects MATSA will produce 98,000 tonnes of copper equivalent during FY2023, including about 56,000 tonnes of copper at a C1 unit cost of around US$1.84 per pound of copper.
Sandfire Resources is an international and diversified sustainable mining company focused on its portfolio of copper assets across the globe. These projects include the DeGrussa Copper Operations in Western Australia, the MATSA Copper Operations in Spain, and the Motheo Copper Mine in Botswana.
Sandfire also holds an 87% interest in the Black Butte Copper Project in central Montana, US, through Canadian listed company Sandfire Resources America (TSXV:SFR)
The company says the broader MATSA portfolio offers ‘exceptional’ exploration upside, and it expects the project to become the backbone of Sandfire’s business along with Motheo.
Images: Sandfire Resources Ltd
