Aeris Resources : QUARTERLY ACTIVITIES REPORT - SEPTEMBER QUARTER 2016

Quarterly Activities Report For the period ended September 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

SEPTEMBER QUARTER HIGHLIGHTS

OPERATIONS:

• September quarter copper production of 6,380 tonnes
• Tritton Deeps development approved by Aeris Board
• Ventilation Shaft at Tritton underground mine commenced
• Ramp-up of Greenfields exploration activities on Tritton tenement package with $7.5M targeted over next two years

  CORPORATE:

  • Cash and receivables of $7.8M at the end of the quarter

• 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

Q1 FY2017 Quarterly Activities Report Safety, Environment and Community

There were no lost time injuries during the quarter.

The total recordable injury frequency rate (TRIFR) is 19.97 as at 30 September 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.

Tritton Copper Mine (NSW)

PRODUCTION

Copper production for the September quarter was 6,380 tonnes. During the quarter, the Tritton underground mine (Tritton) transitioned to multi-lift stopes. Mining production and grade at Tritton were negatively impacted by oversize rocks in stopes, which slowed down extraction of broken ore and impacted on dilution. The North East mine closed during the quarter as the last ore was extracted in September. The Murrawombie underground mine development continued in the quarter with production expected to ramp-up during FY2017.

Ore processing performance was higher than previous quarter at 408,828 dmt milled with copper recovery at 94.32%.

The processing plant was shut down for three days in July for crusher maintenance, and for two days in September, as a result of SAG mill maintenance brought forward. The processing plant was also impacted by power outages at the start of the quarter.

Tritton Production Statistics
SEP 2015 QTR	DEC 2015 QTR	MAR 2016 QTR	JUN 2016 QTR	SEP 2016 QTR
MINED TONNES	430,244	424,445	417,244	422,018	400,627
GRADE Cu (%)	1.88%	1.86%	1.94%	1.75%	1.67%
ORE MILLED TONNES	397,798	454,404	441,630	407,027	408,828
GRADE MILLED Cu (%)	1.91%	1.86%	1.90%	1.84%	1.65%
RECOVERY Cu (%)	93.97%	94.23%	95.18%	93.76%	94.32%

COPPER CONCENTRATE PRODUCED

TONNES 30,210 33,241 33,004 29,014 27,363

COPPER CONCENTRATE GRADE

Cu (%) 23.58% 24.02% 24.18% 24.24% 23.19%

CONTAINED COPPER IN CONCENTRATE

TONNES 7,123 7,985 7,981 7,033 6,345

COPPER CEMENT PRODUCED

TONNES 60 86 92 65 36

TOTAL COPPER PRODUCED TONNES 7,183 8,071 8,073 7,098 6,380

PROJECTS

Ventilation shaft

During the previous quarter, Aeris commenced construction of a new ventilation shaft at the Tritton mine to support operations as they progress deeper, following the orebody. When completed, the shaft will extend from surface to the existing RL4385m exploration drive, a total of 880 metres, representing a total capital investment of more than $11 million. The vent shaft is targeted to be operational at the end of the March quarter in 2017. This significant investment will enable the recently announced Tritton Deeps project to be developed below the RL4385m exploration drive and prolong the Tritton mine life.

The project is progressing well although with some technical issues. Electrical power outages have disrupted progress and a backup diesel power pack was mobilised to site. The pilot hole encountered an open fault at 800m depth that stopped drilling progress due to loss of water returns. Pressure grouting of the fault from the mine was nearly completed by end of the quarter and breakthrough of pilot hole to the mine is expected in October.

Murrawombie

On 21 March 2016, the Company announced that the Aeris Board had approved the development of the Murrawombie Underground mine

Mine development was well advanced by the end of the quarter. Electrical power, main ventilation and pumping infrastructure were all installed and operating during the quarter. Stope mining of the minor lodes in the upper part of the mine had commenced to provide ore production while the decline is advanced down to the main ore body, (102 lode mineralisation).

Production from the minor lodes in the upper part of the mine is expected to be variable due to the partially oxidized rock mass near surface. Hence priority is given to advance of the capital access decline to allow future bottom up mining of these lodes, with stabilizing backfill.

Equipment fleet replacement

Improving reliability of the mine equipment fleet, through strategic equipment replacement and improved maintenance practices, has continued to be a high focus. In FY16, seven new 63 tonne underground trucks, a CAT Loader and a drill rig were added to the fleet. The final truck was delivered and another loader was also added to the fleet during the September quarter.