Sandfire Resources (SFR) is not the lone casualty of the current market collapse, with its peer group of mid-cap ASX listed Australian domiciled base metal producers down an average ~40% (incorporating IGO, OZL, SFR, and WSA). SFR has fallen the most, down ~50% year-to-date, and is now trading below the value of December Q cash ($201m) plus free cash generation from DeGrussa at current spot commodity prices out to the end of the mine life (mid-2022). The pipeline projects incorporating Botswana and Black Butte and exploration tenure are attributed no value in the current share price. Upon a market recovery, we see this value being reinstated, particularly as the Botswana Project approaches a Final Investment Decision (FID) in mid-2020 and given the likelihood of the Black Butte Project attaining a Record of Decision (RoD: mining approval) in the near term.
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