Aeris Resources Limited · ASX:AIS
Aeris Resources — Merger or Acquisition (April 2022)
82 slides from Aeris Resources's merger presentation, Apr 28, 2022
Slide 1: Transformational Acquisition and Capital Raise
Not for release to US wire services or distribution in the United States Transformational Acquisition and Capital Raise 28 April 2022
Slide 2: Important Information and disclaimer
Not for release to US wire services or distribution in the United States Important Information and disclaimer This investor presentation is dated 28 April 2022 and has been prepared by Aeris Resources Limited (“Aeris” or the “Company”). By attending an investor presentation or briefing, or accepting
Slide 3: Important Information and disclaimer
Not for release to US wire services or distribution in the United States Important Information and disclaimer Investment risk All investments in securities are subject to known and unknown risks, including an investment in Aeris shares. Some of these risks are beyond the control of Aeris and its dir
Slide 4: Important Information and disclaimer
Not for release to US wire services or distribution in the United States Important Information and disclaimer Disclaimer To the maximum extent permitted by law, Aeris and the Lead Manager (Bell Potter Securities Limited) and each of their respective related bodies corporate, shareholders and affilia
Slide 5: Important Information and disclaimer
Not for release to US wire services or distribution in the United States Important Information and disclaimer JORC code It is a requirement of the ASX Listing Rules that the reporting of ore reserves and mineral resources in Australia comply with the Joint Ore Reserves Committee’s Australasian Code
Slide 6: Table of contents
Not for release to US wire services or distribution in the United States Table of contents 1. Transaction Summary & Highlights 2. Overview of Round Oak Minerals 3. Update on Aeris 4. Equity Capital Raising 5. Key Risks 6. International Offer Restrictions 7. Underwriting Agreement Summary Appendices
Slide 7: 1. Transaction Summary & Highlights
1. Transaction Summary & Highlights
Slide 8: A transformational acquisition, creating Australia's next mid-tier base and precious metals producer
Not for release to US wire services or distribution in the United States A transformational acquisition, creating Australia’s next mid-tier base and precious metals producer ⚫ Aeris to acquire Round Oak Minerals (“ROM”), an Australian-based copper and zinc producer, from Washington H. Soul Pattinson
Slide 9: Significantly increase scale and mine life, providing immediate uplift in cash flow
Not for release to US wire services or distribution in the United States Significantly increase scale and mine life, providing immediate uplift in cash flow to establish a financial base to support growth ⚫ Consistent with stated strategy to acquire advanced base metals assets in Australia 1 “On str
Slide 10: Diversified portfolio of four producing mines and a long life development asset
Not for release to US wire services or distribution in the United States Diversified portfolio of four producing mines and a long life development asset with exploration upside across the portfolio Mt Colin Mine (100%) Mine Type U/G Cu, Au FY22F Production (CuEq)1 9.7kt Cracow Operations (100%) FY23
Slide 11: Long mine life profile
Not for release to US wire services or distribution in the United States Long mine life profile Multiple assets with proven track record of mine life extensions including two long life assets Group mine life profile FY FY FY FY FY FY FY FY FY FY FY FY FY 22 23 24 25 26 27 28 29 30 31 32 33 34 ⚫ 8+ y
Slide 12: Material improvement in all metrics
Not for release to US wire services or distribution in the United States Material improvement in all metrics Mineral Resources (kt, CuEq)1 Ore Reserves (kt, CuEq)1 FY23F Production (kt, CuEq)1 1,094 418 63 219% 426% 81% 28 751 35 339 343 79 35 343 79 Pre-Transaction Post-Transaction Pre-Transaction
Slide 13: Attractive and diversified commodity mix post Transaction
Not for release to US wire services or distribution in the United States Attractive and diversified commodity mix post Transaction Aeris Round Oak Aeris (pro forma) 15% 27% FY23 Production 36% by Commodity 35kt 28kt 56% 63kt 29% (kt CuEq)1 64% 13% 60% 11% 13% 19% Ore Reserves by Commodity 79kt 339kt
Slide 14: Enhanced portfolio and scale improves investor relevance
Not for release to US wire services or distribution in the United States Enhanced portfolio and scale improves investor relevance Aeris benchmarking against ASX listed peers indicates re-rating potential FY23F Production (kt, CuEq)1, 2 Market capitalisation5 187 8,928 112 2,132 87 63 1,444 47 35 556
Slide 15: The right skill-set to drive value creation
Not for release to US wire services or distribution in the United States The right skill-set to drive value creation Board of Directors Andre Labuschagne – Executive Chairman Sylvia Wiggins – Non-Executive Director Robert Millner – Non-Executive Experienced mining executive with a career A senior ex
Slide 16: Transaction summary
Not for release to US wire services or distribution in the United States Transaction summary ⚫ Aeris Resources Limited (“Aeris” or the “Company”) has entered into a binding share purchase agreement to acquire 100% of the shares on issue in Round Oak Minerals Pty Ltd (“Round Oak” or “ROM”) from Washi
Slide 17: Forward plan
Not for release to US wire services or distribution in the United States Forward plan Aeris’ key focus is to upgrade mining inventory to extend production forecast and continued exploration to add mine life across portfolio ⚫ Current 8+ year mine life from known deposits ⚫ Updated 4 year production
Slide 18: 2. Overview of Round Oak Minerals
2. Overview of Round Oak Minerals
Slide 19: Diversified Australian Portfolio
Not for release to US wire services or distribution in the United States Diversified Australian Portfolio Attractive project portfolio comprising two key operating hubs and a flagship development project Jaguar, WA (Operating) Northwest Queensland (Operating) Stockman, Victoria (Development) Mine Ty
Slide 20: Established production assets with a strong operating track record
Not for release to US wire services or distribution in the United States Established production assets with a strong operating track record Established production assets Round Oak Production (kt CuEq)1 ⚫ Broad portfolio of copper and zinc production assets in Australia 40.4 Successful development of
Slide 21: Jaguar Operations
Not for release to US wire services or distribution in the United States Jaguar Operations High-quality asset producing zinc and copper concentrates, also containing significant precious metals credits Overview of Jaguar Operations Location of Jaguar Operations ⚫ Established underground zinc, copper
Slide 22: Jaguar – Proven track record of mine life extension
Not for release to US wire services or distribution in the United States Jaguar – Proven track record of mine life extension Strong history of resource replacement and reserves conversion to extend mine life All units are in kt, CuEq 300 308 284 290 Mineral 263 275 250 244 267 267 251 238 Resources
Slide 23: Jaguar – mine life extension opportunities
Not for release to US wire services or distribution in the United States Jaguar – mine life extension opportunities Targeting numerous potential mine life extensions following recent success Extension opportunities Bentley Ore Body ⚫ Bentley orebody remains open down plunge to the south ⚫ Recently d
Slide 24: N-W Queensland Operations
Not for release to US wire services or distribution in the United States N-W Queensland Operations Established copper production hub located in highly-endowed Mt Isa and Cloncurry regions Asset Mt Colin Barbara Other Exploration Open pit completed Status Operating Exploration Underground study compl
Slide 25: Mt Colin
Not for release to US wire services or distribution in the United States Mt Colin Cash-generative mine with two year mine life • Shear-hosted Cu-Au deposit located 60km from both Cloncurry and Mt Isa; underground development commenced August 2018 with first ore mined in May 2019 • Current annual pro
Slide 26: N-W Queensland – Barbara Deposit Overview
Not for release to US wire services or distribution in the United States N-W Queensland – Barbara Deposit Overview Potential for underground operations following successful open-pit mine Barbara underground potential Barbara Long Section Looking West • Open pit mine from April 2019 to December 2020
Slide 27: N-W Queensland – regional Cloncurry exploration
Not for release to US wire services or distribution in the United States N-W Queensland – regional Cloncurry exploration Potential to replicate success at Mt Colin and Barbara to discover more high-grade Copper-Gold deposits Regional Tenements Hazel Creek ⚫ Hazel Creek comprises a number of explorat
Slide 28: Stockman – high grade, long-life development project
Not for release to US wire services or distribution in the United States Stockman – high grade, long-life development project Attractive development operation targeting first production mid-FY25 ⚫ Stockman is a high-grade, polymetallic development project located near Indicative Production (kt, CuEq
Slide 29: Stockman – exploration potential
Not for release to US wire services or distribution in the United States Stockman – exploration potential Excellent near mine and regional exploration potential with numerous drill-ready targets Stockman Exploration Targets ⚫ Extensive surface sample geochemistry dataset established for the project
Slide 30: 3. Update on Aeris
3. Update on Aeris
Slide 31: Tritton Copper Operations
Not for release to US wire services or distribution in the United States Tritton Copper Operations Established copper mine in highly prospective region ⚫ Established underground copper mines and 1.8 Mtpa processing plant in Tritton production profile (kt, Cu) 1 Western NSW – Operating since 2005 wit
Slide 32: Tritton Copper Operations - 8+year mine life on known deposits
Not for release to US wire services or distribution in the United States Tritton Copper Operations - 8+year mine life on known deposits Project Producing Developing / Feasibility / Constructing Exploration Tritton Murrawombie Budgerygar1 Avoca Tank Murrawombie Open Pit Constellation Budgery Kurrajon
Slide 33: Tritton Copper Operations - Targeting +30ktpa copper production in FY25
Not for release to US wire services or distribution in the United States Tritton Copper Operations - Targeting +30ktpa copper production in FY25 FY22 Life of Mine Exploration ✓ FY22 Cu production guidance ✓ 8+ year mine life from known deposits ✓ Avoca Tank - depth extension maintained: 18.5kt - 19.
Slide 34: Cracow Gold Operations
Not for release to US wire services or distribution in the United States Cracow Gold Operations A high-grade, low-cost gold mine in Queensland, Australia with a proven operating history Location 500km NW of Brisbane, Queensland Cracow production profile (koz) Ownership 100% Tenement Package 18 MLs +
Slide 35: Cracow Gold Operations Known deposits – conceptual development plans
Not for release to US wire services or distribution in the United States Cracow Gold Operations Known deposits – conceptual development plans Project Producing Development Ready Exploring Western Field U/G Deposit Roses Pride Golden Plateau Klondyke-Royal (near surface) Eastern Field Surface Targets
Slide 36: Cracow Gold Operations – Focus on near-mine exploration
Not for release to US wire services or distribution in the United States Cracow Gold Operations – Focus on near-mine exploration ⚫ Three rigs drilling underground ⚫ Multiple untested targets 36
Slide 37: 4. Equity Capital Raising
4. Equity Capital Raising
Slide 38: Transaction and funding
Not for release to US wire services or distribution in the United States Transaction and funding Terms Aeris has entered into an agreement (“SPA”)2 to acquire 100% of Round Oak for total consideration of $234 million: ‒ $80 million cash at completion to be funded by equity Capital Raising Transactio
Slide 39: Equity Capital Raising Details
Not for release to US wire services or distribution in the United States Equity Capital Raising Details Fully underwritten equity Capital Raising comprising a Placement and Entitlement Offer (“Offer”): ─ a 1 for 4.22 pro-rata, accelerated, non-renounceable entitlement offer to rise ~$56m (“Entitle
Slide 40: Equity Capital Raise Timetable
Not for release to US wire services or distribution in the United States Equity Capital Raise Timetable Key events Indicative dates (2022) Trading halt and announcement of Transaction and equity Capital Raising Thursday, 28 April Placement bookbuild1 and Institutional Entitlement Offer opens Thursda
Slide 41: Pro forma capital structure
Not for release to US wire services or distribution in the United States Pro forma capital structure Aeris standalone Capital Raising adjustments Acquisition adjustments Pro forma Aeris (as at 31 March 2022) Cash $m 72.01 111.7 (103.1)8 80.6 Borrowings $m -1 - - - Net debt / (cash) $m (72.0) (111.7)
Slide 42: 5. Key Risks
5. Key Risks
Slide 43: Key risks
Not for release to US wire services or distribution in the United States Key risks Introduction • There are risks involved with participating in the Offer and holding Shares in Aeris Resources Limited (the “Company”, “Aeris”, "we" or "us"). Certain of these risks are specific to an investment in the
Slide 44: Acquisition risks
Not for release to US wire services or distribution in the United States Acquisition risks Acquisition risks Aeris has undertaken financial, operational, business and other analyses of whether to pursue the Acquisition. There is a risk that such analyses, and the estimates and assumptions made by Ae
Slide 45: Acquisition risks (cont'd)
Not for release to US wire services or distribution in the United States Acquisition risks (cont’d) Change of control risk Some of the agreements and commercial arrangements with respect to the ROM assets may contain assignment restrictions, change of control clauses or similar mechanisms that may b
Slide 46: Risks related to an investment in Aeris
Not for release to US wire services or distribution in the United States Risks related to an investment in Aeris COVID-19 The global economic outlook is facing uncertainty due to the current COVID-19 (Novel Coronavirus) pandemic, which has been having, and is likely to continue to have, a significan
Slide 47: Risks related to an investment in Aeris (cont'd)
Not for release to US wire services or distribution in the United States Risks related to an investment in Aeris (cont’d) Operational and cost risk The Company is a producer of copper and gold which is sold under commercial contracts. The Company’s immediate plans and objectives are dependent upon a
Slide 48: Risks related to an investment in Aeris (cont'd)
Not for release to US wire services or distribution in the United States Risks related to an investment in Aeris (cont’d) General economic conditions Changes in the general economic climate in which Aeris operates may adversely affect the financial performance of Aeris. Factors that may contribute t
Slide 49: Risks related to an investment in Aeris (cont'd)
Not for release to US wire services or distribution in the United States Risks related to an investment in Aeris (cont’d) Health and safety risk As with any mining project, there are health and safety risks associated with the Aeris’ operations in Australia. While Aeris regularly and actively review
Slide 50: Risks related to an investment in Aeris (cont'd)
Not for release to US wire services or distribution in the United States Risks related to an investment in Aeris (cont’d) Contractual and joint venture risks Aeris’ ability to efficiently conduct its operations in a number of respects depends upon third party product and service providers and contra
Slide 51: Risks related to an investment in Aeris (cont'd)
Not for release to US wire services or distribution in the United States Risks related to an investment in Aeris (cont’d) Additional requirements for capital The Company’s capital requirements depend on numerous factors. Depending on such factors as: • the continuation of receipt of operating revenu
Slide 52: Risks related to an investment in Aeris (cont'd)
Not for release to US wire services or distribution in the United States Risks related to an investment in Aeris (cont’d) Risk of not taking up Entitlement Offer Entitlements cannot be traded on ASX or privately transferred. If eligible retail shareholders do not take up all or part of their availab
Slide 53: 6. International Offer Restrictions
6. International Offer Restrictions
Slide 54: International Offer restrictions
Not for release to US wire services or distribution in the United States International Offer restrictions This document does not constitute an offer of new ordinary shares ("New Shares") of the Company in any jurisdiction in which it would be unlawful. In particular, this document may not be distrib
Slide 55: International Offer restrictions
Not for release to US wire services or distribution in the United States International Offer restrictions Singapore This document and any other materials relating to the New Shares have not been, and will not be, lodged or registered as a prospectus in Singapore with the Monetary Authority of Singap
Slide 56: 7. Underwriting Agreement Summary
7. Underwriting Agreement Summary
Slide 57: Underwriting Agreement Summary
Not for release to US wire services or distribution in the United States Underwriting Agreement Summary Term Summary Outline of Underwriting The Company has engaged Bell Potter Securities Limited ABN 25 006 390 772 (Underwriter) as the underwriter for the Entitlement Offer and Placement (including t
Slide 58: Underwriting Agreement Summary (cont'd)
Not for release to US wire services or distribution in the United States Underwriting Agreement Summary (cont’d) Termination • a statement in the offer materials is or becomes misleading or deceptive in a material respect, or the offer material omits any material information it is required to contai
Slide 59: Underwriting Agreement Summary (cont'd)
Not for release to US wire services or distribution in the United States Underwriting Agreement Summary (cont’d) Termination • certain information provided by or on behalf of the Company to the Underwriter in relation to the Offer (and the associated due diligence process) is or becomes misleading o
Slide 60: A. Mineral Resource and Ore Reserve Statements
A. Mineral Resource and Ore Reserve Statements
Slide 61: Tritton Mineral Resource
Not for release to US wire services or distribution in the United States Tritton Mineral Resource June 2021 Tonnes (kt) Cu (%) Cu (kt) Au (g/t) Au (koz) Ag (g/t) Ag (koz) Tonnes (kt) Cu (%) Cu (kt) Au (g/t) Au (koz) Ag (g/t) Ag (koz) Tritton Underground Avoca Tank Measured 3,500 1.3 45 0.1 11 3.6 40
Slide 62: Tritton Mineral Resource
Not for release to US wire services or distribution in the United States Tritton Mineral Resource December 2021 Budgerygar Deposit Au metal Resource Category Tonnage (kt) Cu (%) Cu metal (kt) Au (g/t) Ag (g/t) Ag metal (koz) (koz) Measured - - - - - - - Indicated 720 1.7 12 0.4 10 10.3 240 Inferred
Slide 63: Tritton Mineral Resource
Not for release to US wire services or distribution in the United States Tritton Mineral Resource December 2021 Constellation Deposit Cut-off Cu Au Ag Mineralisation Resource Tonnage Cu Au Ag grade metal metal metal type category (kt) (%) (g/t) (g/t) (Cu%) (kt) (koz) (koz) Measured - - - - - - - Oxi
Slide 64: Tritton Ore Reserve
Not for release to US wire services or distribution in the United States Tritton Ore Reserve 2021 Tritton Tenement Package June 2021 Tonnes (kt) Cu (%) Cu (kt) Au (g/t) Au (koz) Ag (g/t) Ag (koz) Tritton Underground Proved 1,800 1.2 21 0.1 4 3.0 170 Probable 0 0.0 0 0.0 0 0.0 0 TOTAL 1,800 1.2 21 0.
Slide 65: Cracow Mineral Resource and Ore Reserve
Not for release to US wire services or distribution in the United States Cracow Mineral Resource and Ore Reserve 2021 Mineral Resource Cracow Tenement Package 2021 Ore Reserve Cracow Tenement Package June 2021 June 2021 Tonnes (kt) Au (g/t) Au (koz) Ag (g/t) Ag (koz) Tonnes (kt) Au (g/t) Au (koz) Cr
Slide 66: Round Oak Mineral Resources
Not for release to US wire services or distribution in the United States Round Oak Mineral Resources Jaguar Operation at 1 May 2021 plus Dec 2021 Resources for Resource for Mt Colin (Northwest Queensland) Turbo and Bentayga Hanging Wall Resource Tonnes Copper Zinc Lead Silver Gold NSR_M Cu Zn Pb Ag
Slide 67: Round Oak Ore Reserves
Not for release to US wire services or distribution in the United States Round Oak Ore Reserves As at May 2021 Operation Resource Tonnes NSR Zn Cu Au Ag Zn Cu Au Ag Class (kt) (A$/t) (%) (%) (g/t) (g/t) (kt) (kt) (kozs) (Mozs) Proved 301 316 8.2 1.3 1.1 130 24.7 3.9 10.6 1.3 Jaguar Probable 367 350
Slide 68: Competent Persons Statement – Aeris assets
Not for release to US wire services or distribution in the United States Competent Persons Statement – Aeris assets Competent Person’s Statement – Aeris Mineral Resources Mr Cox confirms that he is the Competent Person for the Mineral Resource estimates in respect of Tritton and Cracow summarised in
Slide 69: Competent Persons Statement – Round Oak assets
Not for release to US wire services or distribution in the United States Competent Persons Statement – Round Oak assets Competent Person’s Statement – Mineral Resource (Bentley Deposit) The information contained in this report that relates to Mineral Resource Estimates for the Bentley, Turbo and Ben
Slide 70: Competent Persons Statement – Round Oak assets (cont.)
Not for release to US wire services or distribution in the United States Competent Persons Statement – Round Oak assets (cont.) Competent Person’s Statement – Ore Reserves (Bentley Mine) The information contained in this report that relates to Ore Reserves for the Bentley Mine is based on informatio
Slide 71: B. Copper Equivalent Calculation
B. Copper Equivalent Calculation
Slide 72: Copper equivalent calculation
Not for release to US wire services or distribution in the United States Copper equivalent calculation Copper Equivalent Calculation In this presentation, production is presented on a recovered CuEq metal produced basis and AISC costs are presented on a payable CuEq metal sold basis. Recovery Factor
Slide 73: C. Material Assumptions for Production Targets and Exploration Targets
C. Material Assumptions for Production Targets and Exploration Targets
Slide 74: Material assumptions for Tritton Production Target
Not for release to US wire services or distribution in the United States Material assumptions for Tritton Production Target Criteria Commentary Exploration Target and • The Production Target is based on 44% Ore Reserve, 4% Measured, 20% Indicated, 29% Inferred Mineral Resources and 2% Exploration Ta
Slide 75: Material assumptions for Tritton Production Target
Not for release to US wire services or distribution in the United States Material assumptions for Tritton Production Target Criteria Commentary Cut-off parameters • Ore Reserve cut off grade for the operating mines are based are set using detailed budget information. Cut-off grades for the future mi
Slide 76: Material assumptions for Tritton Production Target
Not for release to US wire services or distribution in the United States Material assumptions for Tritton Production Target Criteria Commentary Environmental factors or • The Tritton, Budgerygar, South Wing, Murrawombie and Avoca Tank deposits are located within approved Mining Licences. assumptions
Slide 77: Material assumptions for Stockman Production Target
Not for release to US wire services or distribution in the United States Material assumptions for Stockman Production Target Criteria Commentary Exploration Target and • The Production Target is based on 100% Probable Ore Reserve. Mineral Resource • The Production Target includes ore sourced from th
Slide 78: Material assumptions for Stockman Production Target
Not for release to US wire services or distribution in the United States Material assumptions for Stockman Production Target Criteria Commentary Metallurgical factors or • The Wilga and Currawong mine ore will be treated at the proposed Stockman ore processing plant by sulphide flotation methods. Th
Slide 79: Material assumptions for Stockman Production Target
Not for release to US wire services or distribution in the United States Material assumptions for Stockman Production Target Criteria Commentary Environmental factors or • The Stockman project mines and processing plant are located on a granted mine license MIN5523. The TSF is located on a separate
Slide 80: Turbo Exploration Target at Jaguar Operation
Not for release to US wire services or distribution in the United States Turbo Exploration Target at Jaguar Operation Summary of Turbo Exploration Target lower Base Upper The exploration target is derived from modelling extensions of the known mineralisation outwards Tonnes (mt) 0.75 1 1.25 on 60m i
Slide 81: Spectre Exploration Target at Jaguar Operation
Not for release to US wire services or distribution in the United States Spectre Exploration Target at Jaguar Operation Summary of the Spectre Exploration Target lower Mid Upper Current drill spacing is on a ~60m spacing and as clearly demonstrated elsewhere in the Bentley Tonnes (m) 0.25 0.5 0.75 m
Slide 82: Competent Persons Statement – Exploration Targets
Not for release to US wire services or distribution in the United States Competent Persons Statement – Exploration Targets Competent Person’s Statement – Turbo and Spectre Exploration Targets David Potter confirms that he is the Competent Person for the Exploration Target in respect of the Turbo and