Aeris Resources : ASX APPENDIX 4E AND ANNUAL FINANCIAL REPORT

Aeris Resources Limited ABN 30 147 131 977‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌ Preliminary Final Report - 30 June 2017‌‌‌‌‌‌ Lodged with the ASX under Listing Rule 4.3A‌‌‌‌‌

Appendix 4E - Aeris Resources Limited

For the year ended 30 June 2017

Results for Announcement to the Market	$'000
Revenue from continuing operations	Decrease	13%	to	168,098
Gross loss	Increase	80%	to	(4,240)
Loss before income tax from continuing operations	Increase	197%	to	(26,982)
Net loss for the year attributable to members	Increase	250%	to	(33,299)
Dividends / Distributions
The directors did not declare a dividend in either of the years ending 30 June 2017 or 30 June 2016.
Key Ratios Basic earnings per share (cents)	30 June 2017 (23.8)	30 June 2016 17.1
Diluted earnings per share (cents) Net tangible assets per share (cents) (Fully diluted)	(3.6) 0.1	2.4 3.6

Financial and Other Information

AUDIT

This report is based on the consolidated annual financial report which has been audited.

FINANCIAL REPORT

The attached annual financial report meets the disclosure requirements not specifically identified in this document. The terms used in listing rule 4.3A reconcile to the financial report as follows:

Required Presented

Statement of financial performance Consolidated statement of comprehensive

income

Statement of financial position Consolidated balance sheet

Statement of cash flows Consolidated statement of cash flows

Statement of retained earnings Consolidated statement of changes in equity

ACQUISITIONS AND DISPOSALS

There were no acquisitions or disposals in the Group during the financial year ending 30 June 2017, other than that mentioned below:

Disposal of non-core assets

The Company announced on 19 May 2017 that it completed the sale of its non-core Blayney Exploration Project in New South Wales to LFB Resources NL, a wholly owned subsidiary of Regis Resources Limited (ASX: RRL). The Blayney Exploration Project fell outside the Tritton Copper Operations' tenement package.

REVIEW OF OPERATIONS AND ACTIVITIES

TRITTON COPPER OPERATIONS

Aeris Resources Limited's (Aeris or the Company) Tritton Copper Operations commenced three major capital projects during the financial year ended 30 June 2017, to set up the 100% owned Tritton Copper Operations for the coming years. The three capital projects were:

• Construction of a Ventilation Shaft at the Tritton Underground Mine;

• Commissioning of the Murrawombie Underground Mine; and

• A strategic 2 year, $7.5 million greenfields exploration program on our Tritton tenement package.

The ventilation shaft will enable the Tritton Underground Mine to be extended to at least RL4000m, at production rates of 1mtpa or better. The raisebore for the Tritton Ventilation Shaft broke through on 20 April 2017. Civil works on the surface have been completed, the ventilation fans are installed and are targeted to be operational by the end of the September 2017 quarter. The 864 metres deep, 5 metre diameter shaft is a world record (length and diameter) for the Atlas Copco 91R raisebore rig and also one of the largest single-pass ventilation shafts in Australia.

Development of the Murrawombie Underground Mine commenced during the financial year with full production rates expected to be achieved during the 2018 financial year. The mine is approximately 25 kilometres from the Tritton processing plant and replaces the North East / Larsens mine, where mining activities ceased early in the financial year, as the second ore source for the processing plant.

In July 2016 the Aeris Board approved a two year, $7.5 million strategic greenfields exploration program, focusing on discovering "Tritton" sized orebodies (+10Mt) (see ASX Announcement dated 28 July 2016). The first stages of this strategic greenfields exploration program involve using high power electromagnetic (EM) geophysics technology. This has involved using moving loop EM technology which is able to "see" 400m-500m below surface, compared to the 200m depth of the equipment previously used on the tenement package, and airborne EM survey, which is able to cover large areas but not "see" as deep.

The moving loop EM program commenced in December 2016 and was 50% completed by the end of the financial year. The program has identified three new anomalies, including two which are within 5 kilometres of our Tritton processing infrastructure. The airborne EM survey was completed in the March 2017 quarter on the northern and southern extremities of the Tritton tenement package with numerous new anomalies being identified. The results to date from both the moving loop and airborne EM programs are highly encouraging.

Key production statistics for the year are recorded below:

PRODUCTION	UNIT	FY2017	FY2016
ORE MINED	TONNES	1,457,406	1,693,951
GRADE	Cu (%)	1.66%	1.86%
ORE MILLED	TONNES	1,467,244	1,700,860
GRADE MILLED	Cu (%)	1.67%	1.88%
RECOVERY	Cu (%)	94.84%	94.31%
COPPER CONCENTRATE	TONNES	99,567	125,469
COPPER CONCENTRATE GRADE	Cu (%)	23.35%	24.01%
CONTAINED COPPER IN	TONNES	23,253	30,122
COPPER CEMENT PRODUCED	TONNES	151	303
TOTAL COPPER PRODUCED	TONNES	23,404	30,425

Aeris' Tritton Copper Operations produced 23,404 tonnes for the year ending 30 June 2017 (FY2016: 30,425), a 23% reduction on the previous financial year. The result was impacted by lower ore production at both the Tritton and Murrawombie underground mines.

Production at the Tritton Underground Mine was impacted during the financial year by a backlog of unfilled stope voids. A series of blockages in the paste backfill pipelines experienced in early FY2017 and paste reticulation issues caused the backlog of voids. The effect of the issues with the paste fill reticulation was lower ore tonnes available during the year. After consultation with a paste fill specialist, changes were made to the mix recipe for the paste backfill, reducing its viscosity and making it less sensitive to blockages on long runs through the paste fill reticulation system. These changes have been successful in stabilising the performance of the paste backfill system, allowing catch up on the backlog of stope voids. Backfilling of the empty voids was back on plan by the end of the 2017 financial year, with production rates expected to be back to normal levels by the end of the first Quarter FY2018.

Development of the Murrawombie Underground Mine commenced during the financial year. Difficult ground conditions were encountered in the upper levels of the mine, impacting on stope production. The solution has been to change to a bottom-up mining method. This resulted in lower ore production than planned during the year whilst developing deeper into the mine. The first stopes under the new mining method were commenced during the fourth quarter of FY2017. The mine is expected to ramp- up to full production during FY2018.

Revenue from the Tritton Copper Operations for the year was $168.098 million, 13% reduction compared to the prior financial year. The lower revenue was due to the lower copper tonnes produced, as outlined above, and sold during the year, partially offset by a higher average copper price in Australian Dollar terms compared to the previous financial year ($A7,683 per tonne compared to $A6,296).

C1 Unit cash costs for the financial year averaged A$2.60/lb (FY2016 A$2.53/lb). The increase compared to the previous financial year is due to the lower copper production.

OUTLOOK

Aeris is targeting production of 27,000 tonnes of copper at its Tritton Copper Operations for the 2018 financial year.

The two year $7.5 million greenfields exploration program on the Company's highly prospective 1,800km2 tenement holding around the Tritton Copper Operations, which commenced during the 2017 financial year, will continue into the coming year as we seek to discover Tritton-scale (plus 10 million tonnes) orebodies.

ADDITIONAL 4E DISCLOSURES

Additional disclosure requirements can be found in the consolidated financial report attached to this report.