Aeris Resources : QUARTERLY ACTIVITIES REPORT - MARCH QUARTER 2017

Quarterly Activities Report For the period ended 31 March 2017

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 23,000 - 24,000 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

MARCH QUARTER HIGHLIGHTS

OPERATIONS:

• March quarter copper production of 5,048 tonnes. Impacted by:
  • Lower tonnes and grade from Tritton due to backlog of unfilled stope voids
  • Lower stope tonnes from Murrawombie whilst changing mining method
• Raiseboring of Tritton Ventilation Shaft breaks through surface on 20th April
• Copper production guidance for FY17 revised to 23,000 - 24,000 tonnes
• Grade control drilling on 102 lode at Murrawombie showing opportunity for extensions and higher grade pods

  EXPLORATION:

• High power electromagnetic geophysical survey continued over the Tritton and Kurrajong corridors (25% completed)
• South Australian ERD Court grants native title authority to Torrens Joint Venture (Aeris 70%)

CORPORATE:

• Cash and receivables of $5.0M at the end of the quarter

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

Q3 FY2017 Quarterly Activities Report Safety, Environment and Community

There was one lost time injury during the quarter. A fitter severely injured two of his fingers, whilst troubleshooting a fault on a jumbo drill.

The operation recorded a spike in safety incidents during January. Hot summer weather historically has resulted in an increase in incidents, and this year has been similar. Road conditions on the Tritton mine decline were also a problem at times, due to erosion from paste fill pipeline flushing water. The majority of injuries were low potential muscle strain or sprains: however more significant injuries were also recorded including the lost time injury.

During the summer we significantly increase our coaching and surveillance of employees to ensure they are not dehydrated or fatigued, these being contributing factors in safety incidents. Despite this effort we still experienced the increased number of incidents. The new ventilation shaft at the Tritton underground mine should improve ventilation conditions coming into next summer. Our safety plan is also being modified to develop additional actions to avoid similar problems next summer. We have also raised the priority on decline road maintenance.

There were no environmental incidents during the quarter.

In the previous quarter we reported an environmental incident: a water leak from a pipeline breather valve that discharged pit water to a local drainage channel. Investigations have been completed and reports submitted to the NSW authorities. We have been advised by the authorities that there will be no action taken against the Company in relation to this incident. Procedures to avoid any repeat have been implemented. Sampling and then monitoring of the vegetation and soils in the locality of the spill, as recommended by specialist environmental consultants, is being completed and results reported to authorities as requested. No long term impact is expected.

Tritton Copper Operations (NSW)

PRODUCTION

Copper production for the March quarter was lower than planned at 5,048 tonnes. Mined ore production was the constraint on the copper output.

Tritton mine suffered from limited availability of production stopes as a result of a backlog of unfilled stope voids due to problems with the paste fill reticulation system. This required a resequencing to stopes with a lower ore grade than those originally planned to be mined.

Due to the change to a "bottom-up" mining method (as outlined in the December 2016 Quarterly Report), the Murrawombie mine is still effectively in the development stage and had limited stoping capacity available during the quarter to compensate for the Tritton mine problems.

Tritton Underground Mine

Tritton mine production was below plan for the quarter, impacted by a backlog of unfilled stope voids. A series of blockages in the paste backfill pipelines experienced in previous quarters and continued paste reticulation issues in this quarter have caused the backlog of voids. Tritton stope production schedules are sensitive to the on-time backfilling of empty stope voids. In an ore body with a small working area relative to its production targets, the result of a backlog of unfilled stope voids can be significant in the short term.

The effect of the issues with the paste fill reticulation was lower ore tonnes available during the quarter. In order to maximise ore production rates during this period there has been a resequencing of stopes, however these replacement stopes have a lower ore grade than those originally planned to be mined.

Relocation of a section of the paste backfill distribution pipeline contributed to the paste reticulation problems. These relocation works are now complete. After consultation with a paste fill specialist consultant, we have also made changes to the mix recipe for the paste backfill, reducing its viscosity and making it less sensitive to blockages on long runs. Recent performance of the backfill system has been stable allowing catch up on the backlog of stope voids. There is excess capacity within the Tritton paste fill system, enabling the backfilling of empty voids to be back on plan by the end of the current financial year.

Murrawombie Underground Mine

As outlined in the previous quarterly report (December 2016), ramp-up of the Murrawombie underground mine was being delayed due to different geotechnical conditions in the upper level 101 lode ore body than originally anticipated, which required a change in mining method to bottom-up stoping with backfill support. The impact in the current financial year of this change in mining method is a reduction in stoping tonnes available whilst development to the bottom of the mine occurs.

Development of the main decline and ore body access was the priority at Murrawombie mine during the quarter. The decline has now reached the top levels of the main 102 lode ore body. However, introduction of a second jumbo and crew into the mine has been delayed until we have more headings available.

The change in mining method, in conjunction with various infrastructure commissioning issues has resulted in delayed grade control drilling and therefore refinement of the mine design. Grade control drilling commenced as soon as suitable locations became available. The geology information is being processed as quickly as practical to support detailed stope design in both the upper level 101 lode ore body and the deeper and larger 102 lode ore body.