Dividends are a definite maybe

BH has broadly suggested to the WSJ dividends are on the horizon. This is 29 Aug, haven't seen it discussed :

Sandfire Resources Won't Jump the Gun on Shareholder Returns -- Interview

29/08/2025 12:32PM By Rhiannon Hoyle

Sandfire Resources' shrinking debt load puts it on course to resume shareholder returns in the not too distant future, although its chief executive cautions the company intends to tread carefully to protect its strengthening balance sheet. It has been three years since Australia-listed Sandfire paid a dividend, and analysts have forecast payouts could resume as early as February, when the miner reports its first-half results for fiscal 2026.

Speaking in an interview, CEO Brendan Harris said it is hard to say exactly when the copper miner will be in a position to restart returns, given uncontrollable commodity prices play a big role in how much it earns.

"Once we have excess cash on the balance sheet, if it's in excess of our requirements at that point, I would imagine we would contemplate returning capital to shareholders," he said. "Whether that happens early in the next calendar year, whether it happens post the end of the financial year, it is really difficult for us to predict."

Sandfire has been prioritizing paying off debts it took on to acquire the Matsa mining operations in Spain and advance the development of the Motheo copper mine in Botswana. Executives expect the miner to reach a prized net cash position during fiscal 2026. Still, Harris said Sandfire is mindful of not racing into capital returns.

"Once we get to net cash, we don't want to do anything that really undermines that," he said. "We'll only really contemplate additional returns to shareholders once we've got truly excess cash on the balance sheet."

Sandfire on Thursday reported a return to profitability. It said it made an annual net profit of $93.3 million in the year through June, versus a loss of $17.3 million the previous year. Sandfire had also reported a loss the year before that. It reported net debt of $123.3 million, down 69% from a year ago.

The miner benefited from higher prices for the metals it produces, including a 5% increase in its average realized copper price. Sandfire outlined a capital-management framework that it said will prioritize a strong balance sheet, including a preference for keeping a net cash position through economic and investment cycles.

"What we've wanted to do is give everyone the building blocks so they know how we will make decisions," Harris said. A franked dividend would be "a relatively straightforward option" if and when the board decides to distribute extra cash to shareholders, said Harris.

The miner has franking credits--an Australian tax benefit--valued at more than $260 million. "But once they're consumed, then ultimately we'll have to consider all of the various options if and when we are returning capital to shareholders," he said. That includes unfranked dividends and share buybacks, which would compete with other options to reinvest cash in the business, Harris said.

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I would rather they buy another Cu mine - Ha! easy to say - yet this statement points to SFR maturing into a consistent, profitable and productive business.

My guess is that SFR will achieve nil net debt sometime this quarter. It is difficult to accelerate its near-mine(s) exploration - drill, assay, review, replan, drill again can't be rushed.

A payout will attract divvy-hunters and boost the share price, but BH & team know nil net debt is not the same as no debt, debt facilities and a positive cash balance to play in the M&A game.

Ash