Sandfire Resources Limited updated the MATSA Syndicated Debt Facility (MATSA Facility) concerning the MATSA Copper Operations.
The loan tenure of the MATSA Facility has been extended by two years, to 31 December 2028, after unanimous agreement by the international banking syndicate, with a revised amortisation profile. This comes after Sandfire published its first update to the Ore Reserve estimate for MATSA to the ASX on 28 July 2022.
MATSA is a large polymetallic mining complex that includes three underground mines as well as a 4.7Mtpa central processing unit. The enterprise makes use of cutting-edge technologies and infrastructure within a vast mineral resource and exploration base. For FY2023, MATSA copper equivalent (CuEq) output is estimated to be over 98kt, including roughly 56kt of copper at a C1 unit cost of around US$1.84/lb Cu.
Sandfire’s financial package for the acquisition of MATSA included the MATSA Facility, which was initially valued at US$650 million. MATSA completed planned repayments of US$198M during the first 12 months of Sandfire’s ownership. In comparison to what was previously a substantially front-ended repayment profile, the revised amortisation profile for the remaining US$452M facility plans repayments of US$20M, US$46M, and US$73M for the June 2023 Quarter, FY2024, and FY2025, respectively.
The Group plans to prolong its copper forward hedging program for MATSA by one year, to mid-FY2026, with a goal of about 30% of projected payable output. The MATSA hedge book was initially designed with a three-year horizon covering 30-40% of copper and zinc production, and the extra forwards hedging position will extend that horizon to more than 2.5 years for copper.
According to Sandfire, other commercial adjustments have been performed in accordance with the standard terms for a facility of this type. With no recourse to Sandfire, MATSA’s cash flow and security support the arrangement. The Sandfire Board approved facility papers to alter and extend the MATSA Facility after approval by the Group’s fully-owned subsidiaries.
“Today’s extension of the US$452M MATSA Finance Facility highlights the confidence that our banking syndicate has in MATSA’s three 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,” Sandire Managing Director and CEO Brendan Harris said.
