SFR reported lower copper production compared to our forecasts in the 2QFY25, however this was offset by an impressive operating cost performance. This enabled SFR to report Ebitda and cash flow in line with our expectations. Production guidance ranges remain unchanged, while operating cost guidance for Motheo has been reduced by 7% to reflect the strong performance. We have incorporated the lower costs at Motheo into our forecasts, which drives 3-5% upgrades to our medium-term earnings outlook. Stable production from MATSA and Motheo should enable SFR to continue to de-gear its balance sheet, with the company forecast to move to net cash by the end of 2025. We reiterate our BUY raging and lift our price target 4% to A$12.80.
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