ASX-listed Sandfire Resources has maintained its full-year production, cost and capital expenditure guidance after reporting group copper-equivalent (CuEq) production of 72 100 t in the first half of the 2026 financial year, representing 46% of the midpoint of its guidance range.

In its December 2025 quarterly report, the miner said production was now expected to be more heavily weighted towards the second half of the financial year following operational disruptions at its Motheo operation in Botswana.

Group CuEq production declined by 5% year-on-year to 72 100 t in the first half of the year, compared with 75 600 t in the prior corresponding period. Production at the MATSA mining complex in Spain remained steady at 46 400 t, while Motheo output fell 12% to 25 700 t.

At MATSA, Sandfire benefited from increased higher-grade polymetallic ore feed and improved flotation recoveries during the December quarter. At Motheo, rescheduled planned maintenance and reduced mobile fleet availability impacted output.

Sandfire CEO and MD Brendan Harris said production in the December quarter had been affected by operational issues at Motheo.

“Last week, we advised that CuEq production in the December quarter fell marginally short of our expectations, primarily because of the need to complete planned maintenance in our processing facility at Motheo ahead of schedule following the premature failure of an OEM specification grate in the SAG mill, and a temporary reduction in the availability of mobile fleet servicing our openpit mines,” he said.

Harris added that equipment relocation and accelerated waste stripping had also affected production.

“The latter impact was somewhat accentuated by our decision to fast-track the relocation of mobile equipment to A4 and ramp up deferred waste stripping following the early completion of dewatering activities that followed the extreme weather event of FY25, which is expected to further de-risk our plans to access the mine’s higher grade ore in H2 FY26 and FY27.”

Harris said the combination of these factors resulted in a 5% reduction in group CuEq production in the first half, although guidance had been retained.

“While these factors led to a 5% reduction in the group’s CuEq production in H1 FY26, we have retained annual production guidance and now expect a H1:H2 weighting of 46:54 as opposed to the 48:52 ratio suggested previously.”

Cost control remained a focus across the group, with MATSA and Motheo unit costs tracking in line with guidance.

“Our strategy and operating model have been intentionally designed to allow our teams to focus on the basics, and this approach has ensured that MATSA and Motheo’s Underlying Operating unit costs have remained well aligned with annual guidance in H1 FY26 at $87/t and $43/t of ore processed, respectively,” Harris said.

He cautioned that costs at Motheo were expected to rise as higher-grade A4 ore was processed.

“While our annual cost guidance has also been retained, it is important to remember that the increasing proportion of higher-grade ore that will be fed from Motheo’s A4 mine across H2 FY26 has additional haulage and handling requirements.”

During the quarter, Sandfire invested $10-million in regional and near-mine exploration across the Iberian Pyrite and Kalahari Copper belts, with drilling activity at Motheo restarting in December.

The company also continued to progress its growth pipeline, including the Black Butte copper project in the US and the proposed acquisition of an interest in the Kalkaroo copper/gold project in South Australia.

Harris said the prefeasibility study (PFS) at Black Butte had confirmed the project’s development potential.

“The recently completed PFS for the Johnny Lee deposit at the fully permitted Black Butte copper project [in the US] confirmed the economic case for the development of a high-grade, underground mine which will be underpinned by high-quality reserves and resources, and a leading approach to sustainable mining practices.”

He said Sandfire had begun reviewing the project’s position within the group’s portfolio.

“We have since commenced a review of the Black Butte project’s fit within the group’s global portfolio, which will primarily consider the materiality of the opportunity within the context of Sandfire’s own significant growth since the Group’s initial investment in the project in FY15.”

Sandfire also signed a binding term sheet with Havilah Resources to earn up to 80% of the Kalkaroo copper/gold project and establish an exploration alliance in the Curnamona province in South Australia.

“These agreements provide a pathway to unlock one of Australia’s largest undeveloped openpit copper/gold deposits and have the potential to replicate our successful entry into the Kalahari Copper Belt.”

The company generated unaudited sales revenue of $344-million and underlying operations earnings before interest, taxes, depreciation and amortisation (Ebitda) of $187-million in the December quarter. Underlying Ebitda for the group was $167-million, while net cash stood at $13-million at December 31, compared with net debt of $62-million at September 30.

Harris said Sandfire’s balance sheet was well positioned to support its growth strategy.

“While we have achieved our targeted balance sheet position and finished with $13-million of net cash as at December 31, 2025, it should be noted that the proposed transaction with Havilah contemplates a A$31.5-million cash payment upon the satisfaction of all conditions precedent, as well as a further A$15-million payment to support the initial phase of the exploration strategic alliance in the Curnamona province.

“Our talented people, strong balance sheet, modern mining complexes and exposure to a preferred suite of commodities, ensures the group is exceptionally well positioned to fund these commitments and prosper in the current environment.”