Aeris Resources Ltd

Okay. Good morning, everyone. I think we can kick off the quarterly presentation for ERIS resources. Just a few suggestions. So there's a chat room. If you want to put questions in the chat room, we will answer them at the end of the presentation. You can also select the raise hand option, and then we will unmute you to ask questions. We will kick off the presentation. The second quarter was in line with what we have seen in the first quarter with 10,200 tons of copper equivalent production. The cost was, again, well managed at $4.93 a pound. It's down from the first quarter. Cash and receiver was stable and the operational cash flow from operations has improved quarter on quarter. Krakow once again had a very good quarter, well managed on both production and costs. And we can see that Krakow will continue with their performance. Although we have seen lower production from Triton at 3,900 tons of copper, there was a few challenges for the quarter, which we'll go into a bit more detail, but they've all been addressed and we're still seeing Triton achieving its annual guidance. And we'll go into detail as we talk through. Mount Collin, another good quarter, 1,900 tons of copper that was produced at an all-state cost of 284. That is nearly the end of Mount Collin. There's still some tons which will be processed in this quarter, but the mining has ceased by the end of November last year. Jaguar starting to look very promising. We presented to the board the final scenario of how we would want to start it up. And we have approved by the board the advancing the studies to feasibility study level. And we'll get into a bit more details. Consolation drilling, very successful drilling. We'll talk a bit on some of the results. And as you would have seen on Friday, we have now renewed the ANZ facility for another six months. And that is just giving us enough time to put the new facilities in place, but also start to look at a few strategic initiatives we will launch. We have launched already and we'll talk about it as we move through the presentation. This is just a standard slide. You can see we're still forecasting Triton Gardens around 20 to 25,000 tons holding Krakow Gardens. Mount Colin would be on track You can see that the resources there for Barbara, Jaguar and Stockman, those are the main projects we're working on. We'll talk about Barbara and the North Queensland assets when we get to that discussion. And really the focus is on the good cash we're generating out of Krakow to enable the copper strategy in the business as we move forward. At Tritton, the challenges for the quarter related to labor shortages, specifically over the Christmas period. We had a rising mine failure at Tritton where we actually flooded the bottom of the mine for a while. And that has now been addressed, but that put us out of mine, being able to mine at the Tritton deeps within the quarter. Also the delay from the overseas or the international delivery of the budget guard pumps for Paceful has been delayed. That is actually being commissioned and is in working order now. So for the quarter, all these challenges we had has been addressed and that's the reason why we're very confident about achieving the guidance for Triton. One of the key reasons why the the Triton will see a good second six months, specifically the last three months, is the open pit ore coming in from Marwambi. The open pit mining will start this month, and we're basically immediately in ore, and by hitting the fourth quarter of the month, the mill will run at full capacity. It's a 1.8 million ton process plant, so you can see that we will get to that 350, 400,000 tons. for Triton when we start, the model won't be put. 70-hole drill program at Constellation really gave us good results. You can see some of those results at copper at 15% and 5% copper on some of those intersections. But what it has made very clear to us is actually there's some areas in there with very good gold grades. And you can see some of those gold grades of nearly four gram a ton and one gram a ton. Looks like there's an area towards the left with higher grade and it drops off a little over the time. So very good results. We're busy finishing off the assaying and targeting to put a mineral resource update out by quarter three, and really trying to then put the feasibility study together so that we can bring the feasibility study to market as soon as we can. At Krakow, Once again, a very good quarter, about the same gold production as the first, cost well managed, capital well managed, and significant cash flows above budget purely driven by price. And one of the things we're working on now is using some seismic data, which has been done a while back, redefining build targets and starting to step out to identify new greenfield targets specific at Krakow. Now the team there has done an amazing job to turn the mine to this position and really taking the advantage of the high copper price, which then assist in delivering, as I said earlier, the copper plans. Mount Colin, that photo you see there is the final footprint. That is now being finished. The mining is done. We have removed all the pumps out of the mine. We're busy doing some rehabilitation work. All the tons mined is at Ernest Henry. And as of the last one, and you can see that we've seen significant improvement in recovery, up to 85%, and also the grades to the mill has improved in the last run we did. At the end of the quarter, we had about 140,000 tons remaining to be processed and basically the last tons are getting processed as we speak at Innes Hendry and then the mining and processing for Mount Collin will be finished or finished in this current quarter. What we have made a decision though, is we talked a lot about Barbara over the years as a future project. It is a strong future project, but it is a small, short life mine. And as part of the strategy to clean up the business, to make it less complex, make sure we allocate capital where there's good returns and long-term returns, we have made the decision to divest the North Queensland assets. That would include the Barbara project and the tenements and Mount Colin as it is today. That process has been kicked off and it's clearly for us, we're looking at copper assets in the business with long life and all the assets to have long lives and really focus on where we spend capital that the significant long-term returns for projects. And that's why we are so focused on the Constellation project at Triton, the Jaguar restart and Stockman. And that really, we believe, give us that opportunity for long life assets. Jaguar, the restart, as I said, has been delivered to the board. Really strong, attractive economics. The base plan is to start off with the restart of the Bentley mine, focus on the turbo high-grade lens, and we will do some infrastructure upgrades. We will restart the mine with a peaceful plant. We will upgrade the ventilation so we can maximize production out of the Bentley mine. And then we will start to step out to other potential opportunities, which include old Jaguar mine, the Teutonic ball, old open fit mine and Triumph, which is a new deposit. As you can see on the right hand side, We've spent a lot of work trying to look at base metal targets in and around the current mines. And there's eight targets identified. And as part of the restart plan, there would be a exploration target program to identify and to test these targets as we move forward. The Stockman project, as we said, the test work is underway. We've seen some encouraging results from the test work, which on the Albion specific test work across the Allbody. The test work we're currently doing is to finalize the cost and capital for the Albion process, but also to understand what is the recovery opportunities across the Allbody, because the first round of test work was only from one hole. We're now doing test work across the Allbody. We have kept the engineering designs. Now that we know the Albion is the process we would want to go down, we are making some rotation upgrades or changes in the main process facility because we think there's ways to have a smaller footprint and potentially a lower capital footprint or a capital cost for the restart of Stockman. At a corporate level, cash and receivables at 33 million. It's down from 39 the last year, but it's really just the timing of concentrates. But the cash and closing cash balance has been maintained at 26 million. stable quarter on quarter. And also, we have put another $3 million into cash back bonds, which the restricted cash or the cash which now sits in government bonds is at $15 million. As I said earlier, cash flow from operations has improved significantly quarter on quarter. We still have the $40 million debt facility with Washington, Seoul, Paterson. And as I said earlier, the ANZ facility has been renewed for another six months. And we are quite far advanced with various parties on the refinancing initiatives. That will allow us to get the new financing in place, but it also allows us to work on, for example, the divestment on the North Queensland assets, which will bring down that facility in any way, the requirement for bonding, and will release some of the cash which currently sits in bonding facilities. So what's the next quarter? Obviously, Triton is a major focus for us. We have launched a review or a program where we've got external consultants to help with the improvement on productivity and efficiencies at Triton. Now that we can get back into budget, go with a baseline working, the startup of the Marwambi Pit, which will start in the next few weeks. And that will bring a lot of tons into Triton. At Krakow, it's really business as usual for Krakow. The team is doing a really good job, but it is about starting to look at the exploration opportunities outside the current Western Wayne field. As I said, we'll finish off Mount Collins stockpile. We'll run the divestment process for North Queensland and we will finish off the feasibility study for Jaguar restart so that we can really get to a position where we know what is the best and when can we restart the Jaguar mine. I guess just in summary, we are now down to, for this last quarter, we still have three producing operations. We will now have two. There's clear, good projects, development projects, lot of work done on new discoveries and consolation keeps on getting better and better. And really, consolation is key for the future life for Triton. And the plans are to start that within the next 18 months. That is the summary of the quarter for Eris. I'm happy to take any questions. I see we already got a question in the chat. If anyone wants to ask a question, please do the hand raise, and then I'm happy to unmute you for that part. We've got a question here from Peter Cooper. Peter is asking about, we generated 33 million in operating cash, we spent 25 million on capital. What was the CapEx spend in prior years? We had spent big CapEx on venture, fundraising, tailings, facility, et cetera, et cetera. Peter, the $25 million, a lot of that is going into capital development, specifically at the operations at Avoca Tank to advance and bring forward some Avoca Tank tons. A lot of money was spent on the Paceful plant to get that up and running. And also, we spend quite a substantial amount of money on exploration, specifically at Constellation. So it is part of the growth plan. It's part of investing. We've also spent quite a bit of money in the mobilization for the open pit. And the next three to six months will see us spending quite a bit of money on the open pit restart plans. I've got Dan. Dan, I'll unmute you. Just give me a second. Dan, can you? Can you hear me? Yep, I can. How are you doing? Awesome.

Good, good. Yourself? Good, thanks. Just a few questions for me. I just wanted to touch on, I guess, Krakow, like if I was to look at the last reserve statement that was printed, you know, obviously kind of outlined a bit of a shortened mine life now, as we all know, you know, reserves are a lot lower than resources at that asset. And, you know, the production over that period was, obviously hasn't all come from that reserve basis, come from other places as well. I just wanted to maybe just get an indication of, is there anything you can kind of point to to give us a bit more confidence in what mine life is at that asset, particularly at current gold prices? I imagine you're bringing in some more marginal or historically marginal stopes that are quite economic at those prices. So I just wanted to see if you could give them a directional look you know, mine life at Krakow?

Sure. Look, good question. I mean, we have spent quite a bit of time in the last three to six months, you know, with a high gold price to go and do a full review of the resource and specifically in that Western Wayne field. And we have already added about 80,000 ounces of additional coal gold into the mine plan over the next 18 months or two years. So just from the work we've done around the cut of grades and the potential to go back into some of those is significant potential. And there's still work to be done. So it's not done yet. So, good result on that. Within the western rain field, for example, we're doing some drilling in and below the current workings, and it keeps on extending. So, four years ago, we bought the mine with two years in life, and four years later, we're sort of saying, well, we think there's at least four years' life with the opportunities we see at home. at Krakow and the continuation of those Western Wayfield ore bodies. But good work has been done to really look at the higher gold price and see what else can we actually bring into the production profile.

Okay, awesome. And maybe just something over to Triton, obviously reiterated guidance of that asset, which requires quite a large second half in FY25. Maybe you can just help us unpack what assumptions we should be making in there. Obviously, you've got the open pit material coming in kind of end of Q3 in Q4. Is that assuming a step up in milling rates as well? Like if I assume underground rates are relatively holding through that period, the open pit volumes just go on top of that milling rate. Is that a fair assumption?

That is a fair assumption. We will, in the fourth quarter, the mill will nearly run at full capacity. And that is just because of the tons we see coming into production from the pit. So the pit will be where we'll get the most. And also, we should see now more production come out of Badgerigar with a paceful now in place and then being done. So there will be a movement for better grade and tons coming from Badgerigar. We've seen some really good results at at Avoca Tank. We're getting really good grades and tons out of Avoca Tank currently. And the team are working there as well on a new development program to speed up development as we move forward. But really, on your assumptions, the key one will be the open pit tons coming into the mill in the fourth quarter.

And just to clarify, the full run rate for the plant, that's the 1.7, 1.8 million tonne per annum rate?

Yeah, that is sort of the capacity of the plant.

Have you done any, because it hasn't run at that rate sustainably for a couple of years, has there been any, I guess, preparation work going into that to make sure that it's capable of producing at that rate after a couple of years?

Look, we have put the Jameson cells in. We've had a crusher replacement a while back. There's nothing there in the plant. What we're currently doing actually with the process plant is we run it for three weeks on one week off. So a lot of maintenance are getting done in the week where it's often when it really runs at a high rate for the other three weeks. So it is getting tested quite often to run it at full capacity.

Okay, and a final one for me, just Barbara, I was just wondering if you could maybe talk about some of the options for the divestment process there and what that could look like.

The divestment, we're running a process basically where we will target the North Queensland and has been approached by a few of the North Queensland explorers, producers up there. We have got a good, close relationship with Glencore, who's obviously interested not to buy the assets, but to be part of the solution for people up there. Really, we will package it all up and sell it as a package. There is interest from various parties for certain areas, so we might look at it once we run the process if we split it up. But clearly for us, the people who work for us has all been either absorbed back into areas or has been made redundant. The contractors are all off site, all the equipment is off site. some of the equipment you can use at the other operations has been or are underway to be moved to both Krakow and Triton. But clearly we see the value for us by focusing on the longer life assets in the business and focusing on the restart of Jack and Stockman as a priority.

Yep. Yep. Okay. Well, thank you very much.

All right. Thanks, Dan. Paul Kainer of Paul, I'll unmute you.

Yeah, hi, Andre.

Can you hear me all right? Good. How are you doing?

Yeah, good, mate. Good. Just a quick couple of questions from my side. Yeah, and following on from Dan's question there on guidance at Tritton, just running a bit unders there on capital spend year to date. And I guess that mainly surrounds Murrawambi and the pre-strip there, right? So are you still on track to, I guess, get to that midpoint of growth CapEx or has a bit of that slipped into FY26 at all?

At this stage, Paul, we are on track. The plan for the Mara Pit originally was to start to kick it off in December. But with the plans which the guys has come up with accelerating and the different stages of the pit, there was no requirement to start early and the work which the guys are doing shows that clearly... there's going to be a faster strip done and mining done than was originally thought. So at this stage, it might move between quarter and quarter, but still forecasting to spend most or all of the capital as per the plan for FY25.

Yeah, too easy and maybe coming in a little bit lower than the midpoint if it slips into next year. That's fine. And then second question just on Bentley and that restart and feasibility study. I guess where will efforts be focused in the very near term in terms of that mining sequence? And I guess next question following on from that is do you think you could sort of get those mining rates up there at the Bentley mine similar to previous rates that you're running at? Or maybe it's going to be a bit lower given the issues that you've experienced or the geotechnical issues you've experienced in that asset?

So look, the guys are still working on some of those, but at a high level, we are targeting plus 450,000 tons for a fall from the start. And to achieve that, two things need to happen. The one is you've got to put baseball in to help the due take challenges we had before we close it down. And the other one is a ventilation upgrade. With the current restrictions on ventilation, you can probably only do 350,000, 400,000. If we spend a bit of money on a ventilation shaft, it will unrestrict your tons and the capacity we are trying to get to is to get to 550,000 tons. So in the next month or two, that work will be finished off by the mining engineers and and the project's team, but we're really very focused on when you start it up, you've got to try to target that 450,000, 550,000 ton, and that will make it a very feasible restart.

Yeah, no, that's very clear. Thanks, Andre. That's it from me. Appreciate the call.

Thank you. I got another question here. from Toby, will the Washington Salt Patterson debt facility be refinanced before August maturity, or is it a possibility it needs to be extended? So, Toby, it's early days. We do have an option with Salt Patterson's to extend by 12 months. That is a a viable option for us. But as part of this refinancing, working on the ANZ, obviously there might be opportunities to look at different ways to deal with Saul Patterson. But right now, we do have the option to extend by 12 months. Adam is asking a question about the ANZ facility, which we announced on Friday that this requires a $10 million cash backing over two installments. Adam, the first one was paid on Friday, and the next $5 million will be paid towards 2020. at the end of February. So both of those currently being managed through the business cash flows. I don't see any more questions. No more hands. I'll give it a minute and then if anyone else want to ask a question, please feel free. Just select the hand or put the question into the chat room. All right. Thank you, everyone. Really appreciate your time for taking time out to listen to our quarterly. We are available for questions afterwards as well. So please feel free to reach out. Thank you very much.