The Sandfire Resources Ltd (ASX: SFR) share price rallied to a near two-year high on the back of its latest quarterly update.
The Sandfire share price jumped 4.6% to $6.61 during lunch time trade. This makes it the third best performer on the S&P/ASX 200 Index (Index:^AXJO).
Only the Sparc Technologies Ltd (ASX: SPN) share price and Downer EDI Limited (ASX: DOW) share price were doing better.
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Sandfire share price outperforming other ASX miners
The Sandfire share price is also bucking the downtrend among ASX mining shares. The OZ Minerals Limited (ASX: OZL) share price fell 2.2% to $24.01 and the BHP Group Ltd (ASX: BHP) share price lost 0.1% to $48.32.
Investors got excited about Sandfire after management showed it was maximising the copper price bull run.
Production guidance at top-end of guidance
The copper miner is not only forecasting that production will hit the upper end of its guidance, but it held its cost estimate steady for FY21.
Sandfire's copper output reached 16,803 tonnes in the March quarter. That's up from the 16,390 tonnes in the previous quarter.
Gold production was weaker. That came in at 9,100 ounces in the latest quarter compared to 9,660 ounces in the three months to end December 2020.
Relief on cost gives extra boost to Sandfire share price
But it's copper that's the key focus. Management is aiming to produce 67,000 to 70,000 tonnes of the red metal this financial year.
Even though gold output dipped, Sandfire believes it can also hit the top end of its FY21 gold guidance of 36,000 to 40,000 ounces.
This might also be why management is sticking to its C1 cash cost estimate of between US80 cents and US85 cents a pound of copper, even though C1 cost came in at US87 cents a pound.
Copper miners usually sell the gold by-product to lower the cost of production.
The fact that Sandfire isn't warning of a cost increase is reassuring after fellow copper miner OZ Minerals lifted its cost estimates earlier this month.
Copper price heading for record highs
"The March Quarter has delivered exciting progress for Sandfire on a number of fronts, against the backdrop of continued strength in the copper price and a robust outlook for copper," said Sandfire Managing Director and CEO, Karl Simich.
"In recent weeks, several major investment banks have further upgraded their outlook, with Goldman Sachs in particular lifting its price target to US$15,000per tonne by 2025 on the back of global decarbonisation and a looming chronic supply deficit."
The price of copper is hovering around a 10-year high of US$9,852 a tonne. Strikes at mines in Chile and robust demand is driving the rally.
