Aeris Resources Ltd

Good day to all attendees, morning, afternoon or evening. Welcome to the ARIS Resources June quarter call and presentation. ARIS Executive Chairman Andre Labochagne will be making a short presentation, after which there'll be time for questions. Before we get started, please keep yourself muted during the presentation. This will avoid any background noise. This is an interactive presentation. You can change your screen at any time using the controls in the top left. We will take questions at the end. To ask a question, please use the raise hand function now located at the bottom of your screen under reactions. If you wish for our moderators to read your question, please type them publicly in the chat. I'll now hand over to Andre Labouchagne, Executive Chairman of ARIS Resources. Andre.

Thank you, Peter. And good day, everyone, and welcome to the ARIS quarterly presentation. I guess firstly, I think it's just such a great feeling to start FY22 with zero debt, $97 million in the bank, and it's really allowing us to look at FY22 through a very different lens. So first up, I just want to thank all the shareholders, the executive team, and the team at the various mines in Eris, and also back for their patience over the last eight years. but I'm looking forward to a very different FY22 and hopefully you as shareholders and investors would see it the same way. With that, I'll jump into the presentation and sort of kick off with a normal, let me just see why this is not, there you go. Maybe just touch on the highlights of the last 12 months. As everyone, I assume, on the call will know, we did the Krakow deal. That integration was done and very successful. And as we have announced a while back, we achieved the guidance of 70,000 to 75,000 ounces at nearly 74,000 ounces for the year. And we bettered the oil sustaining cost at 14.83 an ounce at Krakow. Through the year, as we said, a lot of focus has gone into exploration, and we've seen significant uplift in resource updates. The new tailings dam is nearing completion, and that would be commissioned in August. And after the equity raise the other day, we are accelerating exploration at both the operations to significantly enhance and improve the life of mine plants for both. At Tritton, once again, achieved the revised guidance, very close to the original guidance of at all in sustaining costs of 370 a pound. We started budget-regarding the developments in place. Drilling is underway. And at this stage, what we're seeing is very successful, and we'll start the mining and budget-regarding FY22. The key... Excitement, of course, for everyone was the discovery of Constellation. That drilling is continuing. We keep on seeing it looking better than what we thought and has brought a lot of excitement to the business in terms of the future of that mine. At a corporate level, what a great result to close with over $100 million between cash and receivables. We, as we announced yesterday, and that's sort of the reason for this being on the last day of the announcement, we're now debt free after nine years. We're very lucky to get ANZ on board as a new financier and a support and supportive banker. And really it's moving away, as we've seen with FAG, was, as we said, very supportive, but it was expensive debt to now be debt free, but also being able to use the new facility of ANZ to release cash, to be able to do the final payment on the debt. And as you know, we've raised the $50 million. So a very, Exciting FY21. On the ESG side, as the company grows, we are putting a lot more focus on it from the safety point of view. Very disappointing, two lost arm injuries for the quarter. Both was unfortunate, soft incidents, but still not acceptable, and a lot of focus is going to get better at the safety. But overall, a 30% improvement over the last 12 months. On the environmental side, there were no incidents. We took the opportunity with the wet weather around Tritton to plant 600 trees and shrubs, and that's all part of the environmental rehabilitation plans moving forward. On the COVID side. Happy to report no significant impact at the two operations. We have seen a bit of an impact at Triton with the latest restrictions specifically around Orange and the short lockdown they had, but it's being managed and we haven't seen any significant impact other than a bit of a longer delay in the sampling results coming back. But as always, we continue to look and review all the guidelines as per the government directions. As some of you might have seen, we're very active on social network on both LinkedIn and Facebook. So please join a whole lot of these things. So a lot of work is going into supporting the communities with water. We're supporting events. We're keeping the community up to date on development of the various mines. We had a push for better at the business. That's all for support. And as far as I know, the corporate office won. So that's a good result. On the electric sector, So that loader you see there is our electric loader, which we got involved with a few years ago to sponsor the body that is being reworked a little. But we are working on a strategy as Triton grows on a strategy as how do we slowly and starting to move to better and lower emission strategies going forward. Our first sustainability report will be due in the December quarter. Very proud to say that that is a great piece of work the guys are busy doing. Moving on to the operating results. So the highlights for Triton. There was a significant improvement on both grade and tons coming from the Triton mine from the March quarter. As you remember, March quarter was quite low and driven by the paceful issues we had. That said, though, the cost for the quarter is higher. The main impact of that cost is increase in mining and development activity, and that's setting up the next level of production at Tritton for FY22, and then catching up on the backfill was a significant cost for the quarter. The Marwambi resource drilling, we'll talk a bit more about it in slides coming up, but It keeps on delivering Murrawambee. When we thought we were seeing lower grades and we're seeing the potential end of Murrow, the drilling came back and had some very spectacular results. On the guidance for FY22, in last year, we said the guidance for Tritton would be 21,000 to 22,000 tonnes of copper. So we're maintaining that level and the only sustaining cost between 395 and 430 tonnes. The main reason for that increase in oil and staining costs is driven by the lower tons, but also lower production of byproducts as a result of the lower grades we mine in FY22. At Krakow, they had another cracking quarter, nearly 20,000 ounces of gold. The team, they keep on getting better and delivering great results. There was a slight increase on the cost side in absolute numbers. That was driven by additional costs associated with development and ventilation, allowing us to get access to better quality stoves. So that has been a result of the cost. But overall, we achieved the guidance and the tailings dam at number two will be commissioned in August. It's nearly done. The guidance for FY22, originally when we bought Krakow, we had a forecast of 57,000 to 62,000 ounces. Now that we get a better understanding of the resource, the drilling we've done so far, we've lifted that back up to 67,000 to 71,000 ounces, more or less in the same range as this financial year. So a really great result as we get to know the asset better. We're going to see why the saints do this. Getting back to Constellation, this has just been one of those spectacular outcomes where we've seen nearly every draw or withdrawal has got a result. Originally, we thought it's a small high-grade deposit up in the higher end. What we're seeing, it's getting thicker and better, and we'll talk about some of those results. We got it now traced 1,150 metres higher. Down there, but the strike has also increased to more than 200 metres. And the two EM plates identified down the bottom, we're busy and we'll be drilling those soon. Looking at this shallow RC drilling program has delivered very, very good results. And as I said, the first I'll remember we drilled was three meters, I think, at 20% copper. And since then, we've seen this ore body getting thicker. And as we drill it, you can see some of those results, 8% copper, 8.2% and 4% coppers. That cycling is now over 200 metres. The whole concept here is, in terms of the mine planning, is to drill this out as quickly as we can to a resource, start to put a mine plan around it. You'll start off with an open pit mine and then go underground. And the whole aim is how quickly we can fast track this plan into the life of mine plan for Triton. Just looking at budgerigar, so we have got the access development in. That was about 600 meters of development. Drilling is underway. We've got two rigs, 45 holes has been done. We're waiting still for quite a few results. But the results we've seen so far in the intersections, we've seen some of them outside the regional design. So it does show that there's potential. And the results we've seen is according to expectations. So this mine will be in production in FY22. Moriwambi, as I said, originally when we started this, we thought we're going to get 1.3% copper out of it. And about three years life, this thing is now going for a long time. In the last six months, we thought, you know, that hanging wall, we're not sure what's the grades. And as the guy's drilling it out, it's getting better and better. So Marwambi keeps delivering in terms of expectations and will continue in the life of mine plants. I guess this is sort of just a touch. This has been in previous presentations, but it's really just trying to show you that I know the market is waiting for a live mine plan, and we are working on it, and we'll share it with you as soon as we practically can. But if you look at that, Padre guy is coming into production soon. Avoka tank is in this year, plans to come in. Marwambia has got an open pit. With the underground still strong, we're working out how do you mine those two together. And then all those exploration projects, we've got to allocate $15 million to exploration this year. And a lot of those projects will become into development ready within the next 12, 18 months. So a whole range of pipeline of projects, which all will become plan of the future, like one plan for Triton. So we'll share that with the market as soon as we can. Things move around a lot, so we have been working on it for a long time. Look at Krakow operations. The whole thing with Krakow was when we got in, it's about how do we push the mill to 650,000 tons. And in May this year, the guys had 57,000 tons, which is a new record for the plant. So it showed that it can do those sort of tons. The whole focus is on how do you increase underground mine life with additional tons. You can start to look at productivity, cost, cutoff grades. And the whole idea is how can you use all those parameters to actually create a bigger resource? And we are busy working. You'll see the next slide what we're doing. But it's all about creating that additional resource by re-looking at old areas and new areas. And we're spending $9 million in FY22 just on the near-mine exploration. Then in the new space, we call it new space, but it's greenfields exploration, it is about Prioritizing the targets, we've got Ballymore, which we're going to do some surveys on. We will start drilling in Boyard in the next quarter and start to see how that comes. So those are real great opportunities for new exploration targets and new tons or ounces to come into production. And $4 million is allocated to that. On the resource updates, most of the areas we've drawn so far has resulted in an upgrade. We are waiting for some results to come back, and you'll see in the next slide some of those, one of the areas we're busy with. In there, we will put a new reserve update out in August, so a whole new resource and reserve statement will come in and will be shared with the market in the next few weeks. This slide just shows you all the different areas, which has opened up because of the relook at cutoff grades and costs and associated. So you might find a lower grade coming into the reserve, but it's more tons. The fact that the mill can do those tons, you're still targeting your 70,000 ounces out of the mine, but it might be with some more tons. But it all goes about its high margin tons. So the red areas is where we're currently drilling. You'll see one of the slides. We are going to start to drill golden plateaus soon. We are going to do the black areas in Rosa's Pride and bring the Rosa's Pride into production plane pretty soon as part of our life of mine. This is just one of the examples. I don't know. This is just one of the examples of the underground resource drilling. So this was focused on extensions to the Crown temporary royal deposits. Some of them we're still waiting for results, but you look at the Crown, all of those intersections is outside of current resource envelope, and we've seen some pretty good results, which will definitely result in that becoming a future mining area for Krakow. At a corporate level, as I said earlier, what a nice way to close FY22, FY21, especially coming from where we've been in the last eight years with over 105, nearly $106 million between cash and receivables. Being able to say we've paid our debt back all back in July, having ANZ there with $35 million in a contingent instrument. Now, that is all used for environmental bonding, so they're basically guaranteeing the bonding. What that did is it released $20 million of restricted cash, which was actually cash backing those bonds, and that's the money we used to repay PAC. We also got a working cap facility with ANZ of $20 million, which is nice to have, but with the funding we have, surely I can't see that that would be necessary to use, but it's good to have that as a backup, and they can do FX and gold unsecured hedging lines for us if required. Just touching on the hedging side, the hedges, if you look at September quarter, the first two hedges, 833 tons and 667, that finishes in July. So basically, today is the last day for those hedges. And then we put new hedges in place. It's about 20% of production, 25% of production, sorry. at between $11,900 and $12,900. So we participate in any price movement between $11,900 and $12,900 a ton. That said, though, the current copper price hits at $13,100 a ton. What a spectacular price. But the reason why we've done these hedges, this is double the price it was 12 months ago. We do have a bit of capital we're going to spend in bringing all those projects into production for Triton, and we believe it's just prudent management to put some edges in place. We're not intending to put any more in place, but it's a good baseline to work from. On the M&A side, the key, as you've seen through all those projects we talked about at Triton and Krakow, that the organic growth is a priority, but I do see organic growth as our responsibility to do in any way. So there's a huge amount of upside for both those businesses. And as I've always said, we remain focused on M&A. We have been in quite a few processes since we bought Cracow, but The challenge now for us is you've got to average up. So whatever you get each value with a market cap now, it's today close to $500 million. It does allow you to look at better projects. So that is the aim for us to see what is a better fit. And as we grow the business, we grow with better quality acquisitions or mergers. I guess in summary, FY22 was a great year. Big transformation, good exploration, very great support, and thank you to Shell that's on the line for the $50 million placement. And there's always been the focus on M&A. Looking at FY22, Triton guidance, as we said, about the same in terms of what we always had. The big thing for Triton is moving Triton from, I call it a survival mode. 18 months ago, we nearly ran out of water, and it was really just all about how do we survive. where today it's all about how do we grow the business, how do we bring these new mines into production, how do we accelerate our exploration success we've had and actually see how do we create this significant longer life for Triton. We're at Krakow. We've already seen the work the guys have done on the exploration side, the fact that we can lift the guidance and manage our costs in the way the guys are doing it. We're going to allocate a lot of money on exploration, $13 million. Originally, remember, we said we're going to do $13 million over two years. We're now basically saying we're going to put it all in another 13 in this 12 months, and it's all about getting that reserve back up that you replace with your mine and slowly start to build that up, but also from a resource point of view, see how you get a significant better resource with all these opportunities. The... Can you just put yourself on mute? Thanks. On the tailings dam, that's ready by mid-August. It's going really well. There's a few delays due to rain, but everything is in place. And as I said, it's all about M&A as part of our growth strategy. I guess that brings me to the end of this presentation and open for any questions.