Aeris Resources : APPENDIX 4D AND HALF YEARLY REPORT

24 February 2017‌‌‌‌‌‌‌‌‌‌‌‌‌‌

ASX / MEDIA RELEASE

AERIS RESOURCES LIMITED (ASX: AIS)‌‌ Appendix 4D (Rule 4.2A.3) Financial Report For the half‐year period ended 31 December 2016

Results for announcement to the market (All comparisons are to the half‐year ended 31 December 2015)
$'000‌‌	Up/Down	% movement
Revenue	78,952	Down	14%
Gross Loss	(6,617)	Down	22%
Net loss after income tax (NPAT)	(22,695)	Down	81%

Audit

This report is based on the consolidated half‐year financial report which has been reviewed.‌‌

Acquisitions and disposals

There were no acquisitions or disposals in the period.‌

Commentary on results for the period

Please refer to the review of operations and financial result sections detailed in the director's report which is included in the attached half‐year report for the period ending 31 December 2016.

Dividends

The Directors do not recommend payment of a

dividend. No dividend was paid during the half year or the

corresponding period. Consequently there is no record date.

Net tangible assets per share (fully diluted)

The net tangible assets per share were 1.16 cents for 31 December 2016 and 3.55 cents for 30 June 2016.

Additional 4D disclosures

Additional disclosure requirements can be found in the Directors' Report and consolidated financial report attached to this report.

For further information, please contact:

Mr. Andre Labuschagne Executive Chairman

Tel: [phone], or visit our website at www.aerisresources.com.au

Media: Annette Ellis Cannings Purple

Tel: [phone] [phone]

Aeris Resources Limited Interim report for the period ended 31 December 2016

Directors' Report

Your Directors present their report on the consolidated entity consisting of Aeris Resources Limited (the Company) and the entities it controlled at the end of, or during the half-year ended 31 December 2016 and where required, the previous corresponding period for the half-year ended 31 December 2015.

Directors

The Directors of the Company in office during the financial period and up to the date of this report were:

Current Directors at date of the report

Andre Labuschagne Alastair Morrison Michele Muscillo

Marcus Derwin

Principal Activities

The principal activities of the consolidated entity for the period ended 31 December 2016 were the production and sale of copper, gold and silver and the exploration for copper and gold. Other than as referred to in the review of operations, there were no significant changes in those activities during the financial period.

Dividend

The Directors do not recommend payment of a dividend for the period to 31 December 2016. No dividend was paid during the period.

Operating and Financial Review

Operations

During the period under review, the key focus has been on implementing a number of major projects which will underpin an extension of the life of the Tritton Operations; namely

• incorporating "Tritton Deeps" into the Ore Reserve estimates for the Tritton Deposit;

• the associated Tritton Ventilation Shaft; and

• the Murrawombie Underground Mine.

During the reporting period the Aeris Board approved the development of "Tritton Deeps", which will extend mining operations at the Tritton Orebody 175 metres below the current workings. The drilling campaign completed in early 2016 on Tritton Deeps enabled an updated Ore Reserve estimated on the Tritton Deposit (as at 30 June 2016) to be announced during the reporting period and resulted in a 32% increase in contained copper metal compared to the prior corresponding period. The orebody is still open at depth and will be defined through future drilling as mining progresses deeper.

Construction of the new ventilation shaft at the Tritton mine commenced during the fourth quarter of FY2016 and will support current production volumes at Tritton and the planned deeper mining operations (Tritton Deeps) at the Tritton Orebody. When completed, the shaft will extend from surface to existing RL4385m exploration drive, a total of 880 metres, representing a total capital investment of more than $11 million. During the reporting period the pilot hole for the shaft was completed and by the end of the reporting period back- reaming of the 5 metre diameter shaft had progressed approximately 225 metres vertically. The ventilation shaft is expected to be operational in the fourth quarter of FY2017.

The development of the Murrawombie underground mine (Murrawombie) continued in the period. Production from Murrawombie was lower than planned due to worse than expected geotechnical conditions in the upper level 101 lode ore body and a delay in grade control drilling due to lack of sufficient electrical power, prior to mains power being connected. The mining method in the 101 lode orebody has now been changed to "bottom-up" mining using backfill. Production rates are expected to ramp up in the second half of FY2017.

The Tritton Operations produced 12,404 tonnes of Copper in Concentrate, which is lower compared to the previous corresponding period (December 2015: 15,254 tonnes of Copper in Concentrate) and is predominantly due to the slower than expected production ramp-up at Murrawombie.

The Tritton underground mine continued to perform strongly during the period. A problem early in the period with oversize rocks impacting on extraction rate and dilution were rectified through modifications to drill and blast designs. In response to changes in the geometry of the orebody, mining has successfully transitioned to multi-level stopes. Copper grades were lower than planned due to changes in stope extraction sequence in response to a backlog in paste backfill volumes. The backlog resulted from a number of blockages in paste lines. The blockages have now been cleared and it is expected that the backlog will be cleared during the third quarter of the financial year 30 June 2017.

Mining at the North East / Larsen mine was completed during the period with the mine being placed on care and maintenance.

Ore processed during the period was 808,476 dmt compared to 852,202 dmt at 31 December 2015 and was influenced by the lower ore tonnes mined. Consistent milling operations enabled good metallurgical performance with increased copper recovery of 94.71% compared to 94.1% at 31 December 2015.

The Tritton Operations continues to focus strongly on cost management with A$ C1 unit cost for the period (A$ 2.48/lb) being only slightly higher than the prior corresponding period (A$ 2.40/lb), despite copper produced being 19% lower.

The total recordable injury frequency rate (TRIFR) is 20.49 as at 31 December 2016 and consistent with the prior corresponding period (20.4). There was a single reportable environmental incident during the period with a leak in a breather valve on the water pipeline between the Murrawombie and Larsen Pits. The NSW authorities were notified and the Company continues to work with the authorities with respect to rectification works.

Exploration

Aeris currently holds 184,600 hectares in the prospective Tritton VMS district and this is made up of six exploration and three mining leases (Tritton Tenement Package). Six major mafic complexes have been identified within a sequence of sedimentary rocks with a combined strike length of greater than 100km. The Tritton Tenement Package has to date yielded more than 375kt of copper.