Sandfire Resources (ASX:SFR): Is Spain-focused miner the best way to play the copper trade?

Sandfire Resources (ASX:SFR) is one of the ASX’s largest companies wth exposure to copper, and in our view the best. It has pulled off something very few miners can boast of, transitioning from one asset to another with minimal disruption to shareholder value.

Sandfire Resources’ history

Back in 2009, Sandfire was just another struggling explorer. But it stumbled across the DeGrussa copper deposit in WA. The high grade hits resulted in shares surging from 4c to over $2 in just a matter of months. It became an operating mine in 2012 and produced over 650,000 tonnes of copper and 380,000 ounces of gold over the next decade before closing in 2022.

The company knew time was running out and so it looked elsewhere. It build a new mine at Motheo in Botswana in 2020. In 2021, it raised $1.2bn to buy a copper mine in Spain MATSA that came with the promise to deliver 100,000 tonnes of copper equivalent per year for more than a decade. And finally, it has a development project at Black Buttee in the American state of Montana. Overall, it has a resource base of 172.4Mt @ 1.3% copper and 2.9% zinc.

But it is MATSA that is most exciting.

Source: Company

What’s so good about MATSA

MATSA lies within a favourable mining jurisdiction. We will concede that no company will say it is not in a favourable mining jurisdiction and even those that know deep down they are in bad jurisdictions will try and spin some positives.

Of course, Spain is unknown for many investors focused on ASX mining companies, but unknown is not necessarily risky. Spain (and the government in the local province of Andalusia that is in the country’s far south west near the border with Portugal) is a favourable jurisdiction with strong government support. There is established infrastructure – utilities, roads and the Huelva port. And it lies in the Iberian Pyrite Belt, one of the world’s largest volcanogenic massive sulphide systems.

MATSA is not actually a mine. It is a complex of 3 mines and a 4.7Mtpa central processing facility. And Sandfire owns a total of 48 concessions across ~3,280km2.

Here are some more things that are intriguing about MATSA: Turnover is lower than 3%, 22% of employees are women (over twice the local industry average), and the project contributes 5% of Huelva’s GDP. What’s more is that since Sandfire took ownership, there have been no fatalities (whereas there were under previous management) and the TRIF has gone down, all because of Sandfire’s changes to operations.

But most importantly, the company expects 90-100ktpa copper equivalent over the next 3 years and thinks there is further opportunity to increase metal production. The company anticipates a cost of ~$74-82/t ore processed from FY26 to FY28 and for further improvements to be made at both the production and cost lines.

It is important to note that MATSA is also prospective for zinc and it made 27% of revenues from zinc in 1H25. But it still made over 60% from copper.

It is a good time to be in copper

We’ve been bulls on copper for some time given its important industrial uses. Donald Trump’s threats to impose a 50% tariff on copper imports has caused a stir in the markets.

Of course, it will mean local copper will be more attractive, so good news for American miners. The question of what will happen to imports is another. And not just direct copper imports but finished goods that use copper from defence ammunition and hardware to regular consumer goods like phones. With the US heavily reliant on imports, some companies may just have to ‘pay the price’.

One way in which Trump may be good for Sandfire is that if its Montana project turns out to be anything, it could be quick to get off the ground. Rio Tinto strived to get its Resolution copper mine in Arizona for more than a decade, but only now under Trump has it been able to get the permitting done.

But in respect of MATSA, this will be an incentive for neighbouring European countries to support closer projects that won’t be subject to tariffs.

Conclusion

Sandfire is one of the best ways for investors to gain exposure to copper – at least among pure plays. While shares may be volatile in the short-term, we are confident in the company’s longer-term potential given the quality of its project and the future upside facing it from new exploration work there.

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