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.

The Australian Mining Review - - CONTENTS - AMY BLOM

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.”

All im­ages: Aeris Re­sources.

Aeris Re­sources ex­ec­u­tive chair­man An­dré Labuschagne.

The Aeris team at Trit­ton.

Pro­duc­tion in­creased by 14 per cent from FY17 to FY18.

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