Aeris Resources Outlines FY25 Production and Cost Guidance
AERIS RESOURCES LIMITED (AIS) Share Update July 2024 Monday 29th
Aeris Resources Releases FY25 Production and Cost Guidance
Aeris Resources Limited (ASX: AIS) has announced its production and cost guidance for FY25, highlighting stable copper and gold production alongside increased growth capital investment, particularly at the Tritton mine.
Instant Summary:
- Group copper equivalent production forecast: 40 - 48kt
- Tritton copper production forecast: 21 - 25kt
- Cracow gold production forecast: 40 - 49koz
- Increased growth capital investment at Tritton
- Lower group operating costs compared to FY24
FY25 Production and Cost Guidance
Aeris Resources Limited, a well-established Australian copper-gold producer and explorer, has released its production and cost guidance for the fiscal year 2025. The company expects group copper equivalent production to be between 40 and 48kt, consistent with the FY24 production of 42kt. This stability is attributed to ongoing operations across its key assets, including Tritton and Cracow.
The guidance indicates a forecast for Tritton copper production to increase to 21 - 25kt from 19.7kt in FY24. This increase is driven by a simplified mining plan focusing on higher grades from Avoca Tank and Budegrygar. Additionally, gold production at Cracow is expected to range between 40 and 49koz, maintaining similar levels to FY24.
Operating and Capital Costs
Operating costs for the group are forecasted to be lower than FY24 levels due to the completion of mining at North Queensland. Specifically, group mining costs are projected to be between $172M and $210M, processing costs between $69M and $85M, and site G&A costs between $35M and $42M. The company also forecasts lower treatment and refining charges (TC/RCs) and product handling costs.
Capital costs will see a notable increase in growth capital investment, particularly at Tritton, where the Murrawombie pit cutback will be a significant focus. Sustaining capital costs are expected to be between $64M and $79M, while growth capital will range from $38M to $49M, a substantial increase from $21.5M in FY24.
Asset-Specific Guidance
For Tritton, the company forecasts copper production to increase, with operating costs remaining in line with FY24 levels. Growth capital investment will be significantly higher, particularly for the Murrawombie pit cutback.
At Cracow, production and operating costs for FY25 are expected to be broadly similar to FY24. However, growth capital will be materially lower compared to the previous year, which saw significant investment in the tailings dam upgrade project.
For the Mt Colin mine in North Queensland, mining and processing are expected to continue through Q2 FY25, after which the operation will transition to care and maintenance. This transition will result in significantly lower operating and capital costs for the site.
The stable production forecast and increased growth capital investment at Tritton are positive indicators for Aeris Resources. The focus on higher-grade mining at Tritton and the completion of significant capital projects at Cracow are expected to enhance operational efficiency and output. However, the transition of Mt Colin to care and maintenance may have a neutral to slightly negative impact on overall production figures.
Investor Reaction:
Analysts are likely to view the increased investment at Tritton positively, as it indicates a commitment to long-term growth and operational efficiency. The stable production forecasts for copper and gold should reassure investors of the company's steady performance. However, the transition of Mt Colin to care and maintenance may raise some concerns about future production capacity.
Conclusion:
Investors should keep an eye on Aeris Resources' execution of its growth capital projects, particularly at Tritton. The company's ability to maintain stable production while reducing operating costs will be crucial for sustaining investor confidence. The increased focus on high-grade mining and efficient capital allocation are promising signs for the future.