Sandfire Resources [ASX: SFR] is a leading Australian copper producer which operates the high-grade DeGrussa copper-gold mine in Western Australia.
Founded in 2003, the company focuses on discovering, developing and operating high-quality resource assets. At time of writing, the stock was up 3.29% for the day.
The reason for the rise
Recently Sandfire’s share price has been on fire. There are some good reasons as to why. Sandfire posted strong half-year results for the six months leading to 31 December, 2017. These included a gain of $296.2 million.
On top of these strong results, today Sandfire commenced drilling at the Lorella prospect in McArthur Basin.
This project is expected to take up to two weeks. Analysis results should be received and reported on in late May. If these results are positive, meaning an adequate amount of oxide copper is found, further drilling will take place.
Furthermore, US sanctions on Russian individuals and companies could have an ongoing effect on commodities globally. These sanctions only relate to aluminium at this point. They could easily be expanded to include copper.
What’s next for Sandfire?
If the sanctions are expanded to include copper, this could yield an even higher increase to Sandfire’s share price. Russia generates 4% of the global supply of copper. Sanctions would make the world more reliant on alternatives. Copper isn’t the easiest mineral to find either, and is even harder to mine economically. So companies like Sandfire have the potential for continued growth in the future.
Editor, Money Morning
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