Aeris Resources
Copper miner Aeris Resources has shown no signs of slowing down as it sets its sights on continued growth at Tritton, exploration at its Torrens project, and opportunities presented by mergers and acquisitions.
AERIS Resources is in its best position in six years and looking to expand in 2019 following a strong year, according to its executive chairman André Labuschagne.
It was a far cry from when Mr Labuschagne took the helm at Aeris in 2013, at a time when the company had a $US136 million debt and two operating mines, Mt Muro gold mine in Indonesia and Tritton copper mine in NSW, which were both making significant losses.
Mr Labuschagne said Aeris had focussed on restructuring the balance sheet over the last five years with great success.
It divested itself of Mt Muro, began paying down the debt and restructured the company, leading to increased production at the Tritton mine, which eventually became profitable again.
First discovered in the mid-1990s, the Tritton copper deposit is more than 20 million tonnes in size and now spans across multiple mines and an ore processing plant, which has a capacity of up to 1.8 million tonnes per annum depending on the hardness of the ore.
In November 2018, Aeris reported that its five year average annual copper production at Tritton had increased 19 per cent on the previous five years to 27,400 tonnes.
Total copper production in FY18 was 26,686 tonnes, up 14 per cent from 23,404 tonnes in FY17.
FY19 production guidance was 24,500 tonnes, with Q1 FY19 copper production of 6753 tonnes.
Mill throughput had also increased from 1.27 million tonnes per annum (mtpa) in FY13 to 1.6 mtpa in FY18.
Murrawombie underground mine was now in full production, the ventilation plant had been successfully commissioned, and a new crusher was installed in October.
A floatation circuit upgrade was also near completion.
In October 2018, Aeris completed a fully underwritten $35.1 million equity raise, and reduced debt to $US29 million from its original $US136 million in 2013.
Exploration
Speaking with The Australian Mining Review, Mr Labuschagne said capital constraints had limited exploration over the last five years, but the recent debt reduction had allowed Aeris to refocus its attention to extending the Tritton copper mine beyond the current reserves.
Aeris had also been freed up to focus on its strategic greenfields exploration program with the aim to find other Tritton-sized orebodies of more than 10mt.
The miner has a number of prospective exploration tenements in NSW surrounding the Tritton copper operations, collectively called the Tritton tenement package.
Six major geological complexes have already been identified within the package to date – Tritton, Girilambone, Budgery, Kurrajong, Miandetta and Exley.
An initial six drill hole campaign was completed at the Kurrajong prospect, 20km east of Tritton processing infrastructure, in 2018.
High-grade mineralisation has now been traced over 800m down-plunge and downhole EM surveys have inferred an extension of the strike.
A second phase drilling program of up to 12 holes had begun at Kurrajong, with drill results expected to be announced periodically.
“We have started to spend more money on exploration, we came up with new exploration strategies, and we started drilling at Kurrajong,” Mr Labuschagne said.
“We’ve moved the focus from survival into future growth, specifically around Tritton.
“We are very positive about the future; we’ve got a five year reserve life, which will produce an average of about 24,000 tonnes of copper.”
Mr Labuschagne said there was also significant potential for extensions to the current ore body.
“We’ve moved the focus from survival into future growth, specifically around Tritton.”
“The Tritton mine does extend at depth, which we will draw out over the next six to 12 months, and those north and south wing deposits will each extend the mine life by about five years,” he said.
“Then you’ve got Budgerygar heading to the north of Tritton; there’s already 1.6mt at 1.5 per cent resource.
“Just through that one area you can see significant opportunities for extensions.”
Strong down-dip continuity was a feature common across all known deposits within the tenement package.
There was also a prospective corridor between the Tritton mine and Budgerygar, though little drilling had been conducted yet.
Mr Labuschagne said mineralisation at Murrawombie also extended at depth, though like Budgerygar, little drilling had previously been conducted.
“We’re very positive that once we’re at the right level, we’ll draw that out and we’ll continue,” Mr Labuschagne said.
“From that perspective, we see a significant upside on the reserve, with potential for the Tritton operations.”
However, Mr Labuschagne said exploration had largely been focussed on the southern package, where 750,000 tonnes of copper had been discovered to date along a geological trend of 50km of strike.
While the northern half has been historically underexplored, recent mapping extended the prospective geological corridor by 65km.
Mr Labuschagne said Aeris had therefore begun airborne EM surveys over the northern package in late November, as well as a new tenement the company had applied for further north.
“That will really be our focus for exploration to the northern part of that package, and at the same time we will continue exploring Kurrajong towards that southern area,” Mr Labuschagne said.
“I think Tritton is well set for where we want it to be; there’s a huge opportunity and we are now focussed on creating that future mine.”
Breaking New Ground
Beyond the Tritton operations, Aeris was gearing up to begin a drilling program at its Torrens project after three native titles claims were quashed in the High Court on 19 October.
The Torrens anomaly is a coincident magnetic and gravity anomaly in the Eastern Gawler Craton Iron Oxide Copper Gold (IOCG) corridor in South Australia, which also hosts several large-scale deposits and world-class copper-gold operations such as Olympic Dam, Carrapateena, and Prominent Hill.
Aeris holds a 70 per cent interest and manages the project through a joint venture with Argonaut Resources, which holds a 30 per cent interest.
Mr Labuschagne believed Torrens had huge potential, with a footprint seven times bigger than Olympic Dam, however native title claims over Lake Torrens had previously held up the project.
The Federal Court dismissed the three claims in August 2016 and upheld the initial decision in March 2017.
On 19 October 2018, the High Court refused the three group’s application to appeal.
Mr Labuschagne welcomed the decision, and said it would have otherwise been a challenging way forward.
“Torrens has been a long drawn out court process and we’re very nearly out of that process,” he said.
“That was a key milestone for the company and the joint venture.”
Mr Labuschagne said with the legal challenge resolved and approval to drill 74 holes, Aeris was looking to begin its drilling program in the first half of FY19, and was confident of positive results.
“To the north-west you’ve got Olympic Dam and towards the south you’ve got Carrapateena; those are two of the biggest copper names in Australia, so it’s in the right address; it’s in the IOCG district in that corridor,” Mr Labuschagne said.
“It’s a pure exploration play – you never know what you’re going to find, but if you look at what’s there, it seen as a tier 1 potential.”
Beyond Organic Growth
Mr Labuschagne said with the Tritton operations and Torrens project on track, Aeris was now looking to continue growing its business.
“The company is now set, the operation at the Tritton mine is doing really well, we’re focussing on the future there, and Torrens is getting a bit of extra leverage in terms of the opportunity for exploration,” Mr Labuschagne said.
“But really sitting back and saying ‘where do we see ourselves in the next 12 to 14 months,’ we’ve always said that we are focussed on growing this business beyond Tritton.
“We always said we want to be a multi-mine, mid-tier company, focussing on operational excellence, because that’s our strength, so we’re now more focussed on, mergers and acquisitions.”
Mr Labuschagne said Aeris was already in the process of pursuing ‘ a few opportunities’ and would look both onshore and offshore.
“There’s a great opportunity for a mid-tier copper player in the market and that’s what our focus will be,” he said.
Aeris was currently Australia’s fifth largest, independent copper miner by volume produced.
“There’s a great opportunity for a mid-tier copper player in the market and that’s what our focus will be.”