Aeris Resources : QUARTERLY ACTIVITIES REPORT - JUNE QUARTER 2016

Quarterly Activities Report For the period ended 30 June 2016

About Aeris Resources

Aeris Resources Limited (ASX: AIS) is an established copper producer and developer with multiple mines and a 1.8 Mtpa copper processing plant at its Tritton Copper Operations in New South Wales, Australia.

In FY2016 Aeris' Tritton Operations achieved record production of 30,425 copper tonnes of copper metal exceeding the previously upgraded guidance for FY2016 of 29,500 copper tonnes. Forecast copper metal production in FY2017 is 28,000 copper tonnes.

The Company also has an exciting portfolio of highly prospective exploration projects creating a pipeline for future growth, including advanced projects at its Tritton Operations.

Aeris' Board and Management team is experienced in all aspects of mining and corporate development.

Aeris has a clear vision to become a mid- tier, multi-operation company - delivering shareholder value through an unwavering focus on operational excellence.

Contacts:

Andre Labuschagne Executive Chairman

Suite 22, Level 2 HQ South Tower 520 Wickham Street

Fortitude Valley, Brisbane QLD 4006

T [phone]

F [phone]

[e-mail] www.aerisresources.com.au

JUNE QUARTER HIGHLIGHTS

OPERATIONS:

• Record Production of 30,425 tonnes of Copper, exceeding previously upgraded production guidance of 29,500 tonnes
• New underground mine at Murrawombie on track
• FY2017 copper production targeted at 28,000 tonnes

  CORPORATE:

• Cash and receivables of $19.1M at the end of the quarter

  POST 30 JUNE 2016 DEVELOPMENTS:

• Tritton Deeps development approved by Aeris Board
• New $11M Ventilation Shaft at Tritton commenced
• Ramp-up of Greenfields exploration activities at Tritton with $7.5M targeted over next two years
• Access to Tranche 2 (US$10M) of Working Capital Facility triggered by approval of Tritton Deeps

Aeris Resources Limited ABN 30 147 131 977

Level 2, HQ South Tower, 520 Wickham Street, Fortitude Valley, Brisbane QLD 4006 Australia Post: Box 14, 520 Wickham Street, Fortitude Valley, Brisbane, QLD 4006 Australia

E: [e-mail]: [phone] F: [phone]

aerisresources.com.au

Managing Director's Commentary on FY2016

It gives me great pleasure to recap on what has proven to be a watershed year for the Company.

At an operational level the Tritton Operations has once again bettered its initial and then upgraded guidance by producing 30,425t of copper. This is the third consecutive year of record copper production at Tritton and is a testament to not only the technical ability of the team but also the strong spirit of teamwork and innovation that exists as we continually seek ways to improve productivity and reduce costs.

Graph 1 - Tritton Operations Annual Production

Tritton Operations Annual Production (tonnes)

33,000 1,800,000

30,000

1,600,000

27,000

1,400,000

24,000

1,200,000

21,000

1,000,000

18,000

800,000

15,000

600,000

FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16

Contained Copper (LHS)

Ore Milled (RHS)

During the year we replaced the ageing haulage truck fleet at Tritton with new, higher capacity trucks, resulting in significant improvements in both maintenance costs and haulage productivity.

In March 2016, the Aeris Board approved the development of the Murrawombie underground mine, which is expected to reach full production capacity in the second half of FY2017. Murrawombie will replace the North East/Larsens mine which ceases operations in early FY2017. The Murrawombie deposit is the largest known concentration of copper metal on Aeris' tenements outside of the Tritton deposit and was therefore the logical option to supplement the Tritton Mine. The mine has a seven year life at production rates up to 650,000 tonnes per annum.

At the beginning of FY2016 we commenced an exploration drilling programme at the Tritton Mine seeking to confirm continuity of copper mineralization from 4,200mRL to 4,000mRL (Tritton Deeps), which is below current workings. The Company recently announced (see ASX Announcement dated 28 July 2016) that development of Tritton Deeps had been approved by the Aeris Board. Development of Tritton Deeps will help to underpin an extension of the mine life at the Tritton Operations until 2023.

As we continue to mine deeper at the Tritton mine the ventilation circuit will require upgrading. Work has recently commenced on a new $11.25M ventilation shaft. This shaft will be 880m deep and 5m in diameter and is expected to be completed by the end of the first quarter of calendar 2017.

Whilst significant funds will be invested this coming financial year in extending the mine life through developing the Murrawombie mine and the ventilation shaft at Tritton we are also cognisant of the need to continuing to explore. The Company holds 1,800km2 of tenements around the Tritton Operations in what we consider to be a highly prospective region for discovering more copper orebodies. Over the next two years we are planning to spend $7.5M as we reinvigorate our greenfields exploration activities at Tritton, seeking to find more "Tritton" sized (+10Mt) orebodies (see ASX Announcement dated 28 July 2016).

On the corporate front, it was also a year of significant achievements. In August 2015 the Company (then Straits Resources Limited) announced that it had signed binding agreements with its current financier (Standard Chartered Bank (SCB)) and a new financier (Special Portfolio Opportunity V Limited (PAG SPV)) to restructure and substantially reduce the SCB debt and for PAG SPV to provide the Company with a US$25M Working Capital Facility. This was an important step for the Company as it resulted in the SCB debt being reduced by 55% to US$50M (to be repaid in 7 years) whilst also providing financial flexibility through the Working Capital Facility. The debt restructure was approved by shareholders on 15 December 2015.

The debt restructure also resulted in SCB and PAG SPV taking substantial equity stakes (60% and 15% respectively on a fully diluted basis) in the Company through the issue of Convertible Preference Shares. In addition, we were also able to redeem / convert the US$7M in Convertible Notes held by Credit Suisse at a substantial discount.

With the completion of the debt restructure being the last major milestone in the turnaround of the Company that started in 2013, we felt it was an appropriate time to focus on the future and with that re-launch the Company with a new name, Aeris Resources Limited (Aeris).

Having established a sound production and financial footing, the next step for Aeris is to seek opportunities to grow, both organically and through M&A.

Q4 FY2016 Quarterly Activities Report Safety, Environment and Community

There were two lost time injuries during the quarter. An employee was involved in a serious motor vehicle accident in an attempt to avoid a kangaroo and an operator suffered a finger injury while trying to clear a blockage at the primary crusher.

The total recordable injury frequency rate (TRIFR) is 23.2 as at 30 June 2016. Aeris continues to prioritise the safety of its work force and aims to sustain this rate of improvement through a focus on improving safe behaviours.

There were no reportable environmental incidents during the quarter.