Aeris Resources Ltd

Good day to all attendees, morning, afternoon or evening. We apologise for the short delay in starting this webinar. Welcome to the ARIS Resources October quarter call and presentation. ARIS and Executive Chairman Andre Labouchagne will be making a short presentation after which there will be time for questions. Before we get started, you will automatically be muted during the presentation. This will avoid any background noise. We will take questions at the end. If you wish for our moderators to read your question, please type them publicly using the Q&A. If you want to ask a question, please use the raise hand function. I'll now hand over to Andre Labouchet, the Executive Chairman of ARIS Resources. Andre.

Good day everyone and welcome to the ARIS Resources first quarter FY22 activities report presentation. My apologies for the late start. Just sort of just having a bit of a look at FY22 and the highlights as it was announced in the annual report this week, as most of you on this call will know, it was a spectacular year for us in FY22. The production results were as expected from the mines. The consolation deposit kept on growing and it's still looking very, very good. We'll talk a bit more about that. And then on the balance sheet, every single area in the balance sheet has improved, including by the end of July, we were debt free and we had $97 million in the bank. What FY21 has set us up to do is actually to look at how do we grow this business further. It will turn Triton from a a surviving business to a growth business. It will keep on focusing on extending the life at Cracow. But most importantly, it's all about creating that additional life as we move this business forward. Getting into the first quarter results. At Cracow, they did 4,691 ounces at an only sustaining cost of $19.51, in line with our guidance. The monthly throughput has achieved a record tons in August. That's an annualized throughput of 700,000 tons, which historically this mine has done about 550 to 570. And the whole aim, as we would have discussed before, was as we get into Krakow, it's all about how do we extend the life? How do we put more tons through the process plant? And the guys have done an amazing job to push that to over 58,000 tons in August. As we would have spoken before in FY21, we now have commissioned the tailings storage facility number two at Krakow, and it's actually looking really, really good, and the time team has delivered on budget and on time delivering that storage facility. On the exploration side, we still got the three rigs going underground. We're now focusing on surface drilling with two rigs drilling on surface. And it's all, we'll talk a bit more in the presentation, but it's all about creating that extended underground mine, but also starting to look at other projects to bring them forward into the production plan. Tritton had a below average production for the first quarter, 4,534 tonnes. It was not significantly below our internal budget, so it's always budgeted to be a soft quarter at all the sustaining cost of 473 per pound. As I said earlier, Tritton is moving into a growth phase and we'll put $50 million into developing three new projects and new sources at Tritton. We have started a VOCA tank. We'll talk a little bit more about that. Constellation keeps on extending. It's now slightly extended over 300 meters or up to 300 meters. And we now moving back into the greenfields exploration and really focusing on that northern part of the tenement package. The closing cash balance, what a corporate level was $75 million. PAG has been repaid and after nine years, we debt free and we would have talked about in the last quarter, but that was an amazing outcome. And we now got new facilities in place with ANZ, who's now our primary banker going forward. On the ESG side, safety, we had one last time injury for the quarter cracker. One of the employees received minor burns, but he was back at work and no further issues. We had zero last time injury at Fritton. And as you can see, we slowly clawing back that injury frequency rate. There was no environmental incidents. And on the COVID side, We have got all the measures in place. We have seen specifically at Triton that it did impact on the production and the manning levels at Triton with the lockdowns in New South Wales. That is now being managed, but we are working through all the challenges specifically at Triton around COVID. We are very proud to have released yesterday our first sustainability report. That demonstrates Eris's commitment to transparency, integrity and a sustainable performance. That is how we pride ourselves and how we run our business, how we earn our license to operate and really put our commitment in to how do we see the future at a sustainability level. It is on our website. It has been released yesterday. Please feel free to read it and any feedback is welcome. But we now will report on that on an annual basis, and we'll show progress on what we're doing on all the different levels in our sustainability of the business. Getting to a bit more details into the highlights for Twitter, production was lower than planned. You can see there's lower tons than grade. The tons was mainly impacted by COVID restrictions following availability of many levels, but the grade was impacted due to lower grade being mined than what was expected. We did do a great reconciliation investigation into it. We now understand where the low grades are coming from, and we have adjusted the plan accordingly going forward for the rest of this financial year. The available evoker tank has commenced. You will see some photos. We have changed our only sustaining cost guidance by 15% and it's all due to the sea freight rates. 18 months ago, we would have paid 35 US dollars a ton for concentrate freight. Currently, it's close to $100 a ton. And we don't see in the short term, a big clawback on those rights. And that impacts around 15 cents a pound, or around five to $6 million in cash in additional rights. We kept our production forecast at 21 to 22, but we have, as I just said, increased all the sustaining costs. At Cracow, production was in line with the previous quarter, a little bit more tons, lower grade, but was mainly impacted by grade. It was all due to mining sequence, and it's all come down to when we take certain high-grade and low-grade stoves out. Those forecasts at both costs and guidance remain in place for FY22. Looking a bit more detail at Tritton, I think this is an important slide which we're trying to get across to the market to show the future of Tritton. As I said, Tritton is moving from a survival mine to a growth mine and where we sit today, we're currently mining the Tritton and Marwambi underground mines. We just started a VOCA tank. We started budgerigar. And you can see when those operations get into the blue, that's when they get into production. So, over the next two years, both Triton and Mara will start to slow down. But in that period, we bring into production Triton, budgerigar, VOCA tank, and Mara open pit. Then we'll finish off exploration of Constellation and bring that into production, the same with Currajong and Badri. The key takeaway on this slide is as Tertullo Mara drops off, better quality, high-grade production profiles will come into production. And by the end of FY26, there will be five operations in production with substantial life and substantially better grades when it comes to mining. So as I said, you look at Triton, it's a transformation. It's going to a growth phase. We're investing capital now. And as I said, this year we'll invest $50 million. But all those projects, as they come online, will create a substantial improved life and better quality tons for Triton. This is just a few pictures of a VOCA tank. So the VOCA tank decline is going into an old decline. The work has started. That's a photo of the first cut taken earlier this week or actually end of last week. We see first production coming out of a VOCA tank in quarter four FY23. So between now and then, it's all about development and getting it ready. When you look at Constellation, you all would have seen these slides quite a few times. This is just over the last 12 months, just getting bigger and better. We now got a clear 850 meter down plunge identified. There's another 300 meters identified through EM plates. We will drill holes through those EM plates and test them down plunge. the there's a clear oxide and a transition all bodies. And you can see some of those results from the RC drilling which we've done. We've now done 103 assays has been received back. You can look at some of the latest ones 48.7 meters at 2.5% copper plus 1.2 gold. That is just spectacular results. We now will put a, we're now drilling that to a targeting a resource, a maiden resource by the December quarter, trying to start to get the concept. We've launched a concept study for the development of a bokeh for Constellation, starting with an open pit going underground. And within the next 12 months, we'll have a clear plan on exactly how that will be mined and coming into production. But if you look at that previous slide I put up, the target is to have this into production within a two-year timeframe from where we are today. Then you look at , which is the one we also started. The drilling there is going really well. You can see some of the results, really good grades coming out of that. We're now doing, by quarter end, we had 33 resource definition holes drilled to a 40 by 40 spacing to get it to an indicated mineral resource. And we expect mining to produce all tons in quarter four FY22. So once again, as Triton goes deeper and the grade drops starting to drop off, we're bringing these higher grade, lower cost tons into production from budgerigar. Then Marwambi has always kept on delivering. We're now drilling the, testing the hanging wall at Marwambi. We're drilling that to a 40 by 40 meter spacing as well to get it into an indicated mineral resource. But you can see there some really good results, 25 meters at 2.3% copper with a six meter through thickness. So that is all sort of drilling ahead of us trying to see how far we can extend Marwambi. So we're always trying to extend Marwambi as far as we can and keep on drilling it out. It's one of those deposits which we mine and drill nearly only about six to 12 months ahead of ourselves. But at this stage, we are planning to bring in the Marwambi open pit as well into production in the next 12 months. Then we go and have a look at Krakow. As I said, we are pushing that multi to target of 650. The team at the mine did an annualized production. If you take August and annualize it at 700,000, so 650 is very achievable. The all the focus there is how do we improve the near mine production, keep the drilling. We've got three drill rigs going underground. We've allocated $9 million budget in FY22 to extending those near mine targets. But a lot of priority has now moved on to look at Ballymore and Boyard to see how does the, we call it the new space look and prioritizing those targets to bring them in. We have also started drilling at Coldham Plateau, which is a deposit which has been mined before, very large deposit. And the idea now is to bring into production as quickly as we can within this financial year, but also starting to look at how do we get Golden Plateau into production within the next 12 to 24 months as we move forward with the Krakow plan. You've seen this slide quite a few times. This is all just the different areas we're testing. All the ones in red is where we're drilling. All the ones in black is where we will still test. Rosa Sprite on the right-hand side, that will now become one of part of the production plan for this financial year. And it's all about bringing in and bringing forward some of those tons into the production. And Golden Platter, which you can see on the top, of that slide units, an old open pit with underground potential extensions. And there's a lot of work being done on exploration on that deposit. This is an example of Rose's Pride, the IC drilling. You can see some of those results, four meters at five gram a ton. We are getting it ready so we can bring that into production in FY22. As we always said, you know, you've got to look at Krakow just beyond the current working, so the western field is where we're currently working. Now, that western field is a 2 million-ounce system. The Krakow Southwest has got a data analog towards that, so that has been propertized. Ballymore and Boyard is currently under investigation and work has been done to start drilling within those areas. So we are focusing, keep the focus on the greenfields exploration or the new space as we call it going forward. At a corporate level, the cash has gone down from usable and cash and receivables $105 million to 75. That was planned, only $5 million of that was not planned. And it's all, the bulk of that is on the back of big capital spend happening in the business. We have repaid debt with cash, which we had. We also had the final payment for the cracker acquisition project. for the stamp duty, which was $4 million. So the cash going down is not unexpected. 5 million of that is on the back of the production at Tritton. But there was always also quite a significant amount of concentrate at the port, which is not accounted for anyway in the system. Hedging currently we got about 1,650 tonnes per quarter hedged. be in between $11,900 and $12,900 a ton. So it's currently slightly below the current copper price, but it's still within a very good close range, but it's only about 25 to 30% of the production on a monthly basis. On the debt side, as I said, TAG has been repaid in July. We now got ANZ as our primary banker with a worth $20 million working gap facility and then a $35 million contingent instrument facility, which is purely for the use of environmental bonds, specifically for Triton and Krakow. As always, we are folks in M&A. We always said we want to go this business further. We are looking for copper gold. We're looking specifically in Australia at this point in time. We're happy to go offshore, but it's a risk reward thing for us. We are operators in essence, so we're always looking for producing assets first, development-ready assets second, and then if there's some bolt-on assets to the current operations. We will be looking and we will be trying to see what's available to keep growing this business beyond just accounting to assets. And that was always a clear strategy from us going forward in the business. So I guess in summary, FY21, we talked about it was a great year. FY22, first quarter was a bit disappointing for Triton, but we're still very confident that we'll achieve the production guidance. We have changed the cost guidance a little, but that's purely driven by uncontrolled trade rates. We are very excited about the transformation from survival to growth at Triton and the way we set up for it. And of course, exploration in this year, between the two months spent $28 million in exploration just on the two assets. So I guess from our point of view, great start, disappointing for where we start off with Triton, but it's not a difficult situation. We're still achieving the forecasting guidance and looking forward to FY22 where we'll start to see the benefits of the growth of FITM going forward. Thank you very much.