Sandfire Resources (ASX:SFR) posted a "strong" free cash flow yield in the September quarter, Jarden Research said in a Wednesday note, adding that this is core to its investment thesis for the company.

The company reduced its debt by $51 million in the September quarter, helped by low production cost for copper. It also reported an all-in-sustaining cost of $2.75 per pound at the MATSA mine and $2.03 per pound at the Motheo mine compared with the average copper price of $4.18 per pound.

The investment firm expects Sandfire to generate $224 million in free cash flow in fiscal 2025 and $366 million in the fiscal year 2026, returning the firm to a net cash position in fiscal 2026.

Following the projected lowering of total costs for copper and zinc in the current fiscal year coupled with the debt reduction, Jarden Research raised Sandfire Resources' valuation by 4.5% to AU$9.50 from the previous AU$8.80 while keeping an overweight rating.

Price (AUD): $10.37, Change: $+0.08, Percent Change: +0.78%