Established Australian copper-gold producer and explorer, Aeris Resources Limited (ASX: AIS) (Aeris or the Company) is pleased to provide this corporate update.

Aeris' Executive Chairman, Andre Labuschagne, said 'We have made the tough but appropriate decision to place the Jaguar Operation onto care and maintenance, with operations ceasing in September. Between the operational challenges, lower zinc price and cost inflation it became obvious that the best value for our shareholders was to pause production at Jaguar. We firmly believe this decision provides the greatest opportunity for shareholders to realise value from Jaguar over the medium term.'

'Jaguar has a significant metal inventory across four deposits, and an underutilised processing plant. Leaving the metal in the ground until we have an optimised restart plan, at higher production rates, was clearly the better alternative than continuing a loss-making operation. We will now commence feasibility work on restart options.' 'FY24 production guidance is forecast to be 40kt - 50kt copper equivalent1 with minimal contribution from Jaguar and down from 51.5kt2 in FY23. Of particular note, Tritton copper production is forecast to increase significantly on the back of the higher grade Avoca Tank and Budgerygar mines developed in FY23.' 'In order to wind-down Jaguar in an orderly manner whilst progressing our multiple growth projects we have bolstered the Company's working capital position with a 2-year, $50m secured loan from our major shareholder, Washington H Soul Pattinson (WHSP), which replaces the ANZ $20 million Working Capital Facility. This facility supports Aeris' plans without dilution to shareholders and demonstrates WHSP's commitment to the business.'

Jaguar Update

Over the course of FY23, Jaguar was impacted by multiple factors. Operationally, production was constrained by availability of stoping fronts and low development rates in the Bentley mine. Lower production results have been compounded by cost inflation along with a 20% decline in zinc price over the last two quarters. The mine also experienced three mining induced seismic events in the last quarter, which further disrupted production and prevented access to high-grade stopes. To ensure safe operations can be maintained, Aeris has halted all operations in the Bentayga mining area until further geotechnical assessments can be made. The low development rates, due largely to equipment congestion and ventilation constraints, mean that decline access to the Turbo deposit has also been delayed. Without access to Turbo, ore production was forecast to drop considerably at the end of Q1 FY24. Under these operational and financial parameters, Jaguar was forecast to make a significant operating loss in FY24. The decision to pause production at Jaguar and place it on care and maintenance from September 2023 has been made to limit cash outflows and preserve the considerable in-ground resource value. Jaguar Operations will cease mining operations in August and complete processing of ore stockpiles soon thereafter, at which point the operation will transition to care and maintenance. The operation will remain on care and maintenance, at least through FY24, until a restart can be justified at improved economics.

There remains an 8 million tonne Mineral Resource1 with a significant metal inventory of copper, zinc, gold and silver across the four main deposits at Jaguar Operations: Bentley (including Turbo), Jaguar, Triumph and Teutonic Bore. As well as these deposits, Aeris has identified numerous exploration targets on the tenement, prospective for VMS deposits and primary gold mineralisation. Aeris continues to believe in the value and potential of the Jaguar Operation and considers that in the right operating environment and with the right business plan it will make a substantial positive financial contribution to the Aeris group. Studies will now commence on a re-start strategy to exploit the multiple mineral resources at higher production rates, targeting 600-700ktpa, to fill an upgraded mill and improve operating cost efficiencies.

Funding

Cash flow for the final quarter of FY23 has been impacted by the reduced production out of Jaguar and deferral of the Mt Colin processing run in June, along with lower zinc prices and general cost inflation across the business. The first half of FY24 will not only include closure costs (payment of creditors and workforce separation costs) related to Jaguar but also $18 million capital investment on a new tailings facility at Cracow and re-commencement of resource drilling at the Constellation deposit. To ensure sufficient working capital liquidity to deliver on FY24 plans, Aeris has secured a $50 million working capital facility (Facility) with its major shareholder, Washington H Soul Pattinson (WHSP). The Facility is non-dilutive to shareholders, with no equity or production-linked components. The WHSP Facility will replace the ANZ $20 million Working Capital Facility

Contact:

Mr. Andre Labuschagne

Tel: +61 7 3034 6200

About Aeris

Aeris Resources is a mid-tier base and precious metals producer. Its copper dominant portfolio comprises four operating assets, a long-life development project and a highly prospective exploration portfolio, spanning Queensland, Western Australia, New South Wales and Victoria, with headquarters in Brisbane. Aeris has a strong pipeline of organic growth projects, an aggressive exploration program and continues to investigate strategic merger and acquisition opportunities. The Company's experienced board and management team bring significant corporate and technical expertise to a lean operating model. Aeris is committed to building strong partnerships with its key community, investment and workforce stakeholders.

(C) 2023 Electronic News Publishing, source ENP Newswire