Aeris Resources Limited · ASX:AIS
Aeris Resources — Straits Resources — Corporate Update (August 2015)
38 slides from Aeris Resources's corporate update, Aug 18, 2015
Slide 1: Straits Resources Debt Restructure: A New Beginning
Straits Resources Debt Restructure A New Beginning Established Copper Producer • Solid Project Pipeline • Exploration Upside ASX: SRQ 18 August 2015
Slide 2: Disclaimer
Disclaimer Forward-Looking Information Certain statements contained in this press release constitute forward-looking statements or forward-looking information. The words “intend”, “may”, “would”, “could”, “will”, “plan”, “anticipate”, “believe”, “estimate”, “expect”, “target” and similar expressions
Slide 3: Company Snapshot
Company Snapshot Established and growing copper producer (28,000tpa guidance FY2016) Tritton Operations performing at record levels Board and management team with a proven track record and clear vision and strategy Exciting portfolio of advanced growth projects Extensive landholding in a highly pros
Slide 4: Company Turnaround
Company Turnaround New Management Team commenced December 2012 Improved operational performance Reduced overheads, secured the future Record production at Tritton Corporate Office downsized and Cost reduction strategies at Tritton relocated implemented Investing in people and equipment Tritton gener
Slide 5: Position Pre Debt Restructure
Position Pre Debt Restructure ► US$111M Bridge Loan Facility with SCB due to expire (29 July 2015) ► US$7M Convertible Notes with Credit Suisse • US$3.75M matures November 2015 • US$3.25M matures November 2016 (50% mandatory convertible at 3 cents) • 10% interest rate • Convertible at 3 cents per sh
Slide 6: Background to Debt Restructure
Background to Debt Restructure ► Mid-2013 – Advised SCB that Straits would not be able to meet scheduled step-up in repayments from August 2013 ► September 2013 – lower repayment structure agreed for 9 months after which debt would be restructured ► June 2014 – Copper Swap Facility converted to Brid
Slide 7: Refinancing
Refinancing 7
Slide 8: Overview of Debt Restructure (SCB)
Overview of Debt Restructure (SCB) SCB US$111M debt reduced to US$50M senior debt facility: ► 5% cash interest with 2 year payment holiday ► 10% PIK interest year 1; 12.5% year 2; and 7.5% thereafter ► 7 year term with a bullet payment SCB to be issued with redeemable convertible preference shares:
Slide 9: Overview of Debt Restructure (SCB)
Overview of Debt Restructure (SCB) Copper Price Participation Agreement with SCB: ► Small additional payment at high copper prices ► SCB to receive on a cumulative basis: • 5% of incremental copper revenue when copper price between A$8,000/t and A$8,749/t; plus • 10% of incremental copper revenue wh
Slide 10: Overview of Debt Restructure (PAG) - New Funding
Overview of Debt Restructure (PAG) - New Funding PAG to provide a revolving priority debt facility of up to US$25M: ► 2 tranches: A) US$15M available on close of transaction B) US$10M available on confirmation of Tritton Deeps resource upgrade ► 3 year term ► 5% cash interest and 6% PIK interest ► N
Slide 11: Overview of Debt Restructure (Other)
Overview of Debt Restructure (Other) Management: ► Both SCB and PAG requested and made transaction conditional on key management staying to deliver on business plan and growth strategy ► Key management can earn, through the issue of options over five years, up to 10% of Straits post-restructuring fu
Slide 12: Pro Forma Debt and Equity Structure
Pro Forma Debt and Equity Structure Current Debt restructure Pro forma3 Debt Structure (US$M) Current SCB facilities 111.1 (111.1) - Leases / other1 3.8 - 3.8 CS convertible notes 7.0 (7.0) - New SCB Facility - 50.0 50.0 Total Debt 121.9 (68.1) 53.8 PAG Revolving Priority Debt Facility 25.0 Pro form
Slide 13: Straits - Post Debt Restructure
Straits - Post Debt Restructure Post Debt Restructure Straits will have: ► A sustainable debt position ► Access to additional funding ► A strong performing operation at Tritton • generating positive operating cashflows • long mine life • significant exploration upside ► Leverage to copper price ► Ma
Slide 14: Next Steps to Completion of Restructure
Next Steps to Completion of Restructure ► Credit Suisse convertible note restructure ► Independent Expert’s report ► Shareholder Notice / Explanatory Memorandum ► Shareholder Meeting – target mid-October ► Completion of Restructure ► Consolidation of shares ► Rename company Restart as an established
Slide 15: Established Copper Producer
Established Copper Producer 15
Slide 16: Tritton Operations: Cornerstone Asset
Tritton Operations: Cornerstone Asset Proven copper producer Multiple mines Established infrastructure Long mine life Portfolio of growth projects Large copper inventory Exploration upside Proven copper field Large portfolio of exploration targets/prospects 16
Slide 17: Tritton Operations
Tritton Operations Reliable and growing copper production Tritton Copper Production 1.6mtpa Processing Plant tonnes 35,000 Multiple ore sources: currently mining the 30,000 Tritton and North East/Larsens deposits 30,245 28,000 25,000 26,422 Setting new mining and processing records 23,936 23,962 23,
Slide 18: Tritton Operations: Turnaround Strategy
Tritton Operations: Turnaround Strategy Tritton Copper Production 9,000 8,000 7,000 Refocus on planning, people and maintenance: 6,000 Tonnes 5,000 Production: UP 4,000 3,000 • New quarterly production record of 8,352 tonnes 2,000 in Mar Qtr 2015 1,000 0 Unit Costs: DOWN • Includes significant inves
Slide 19: Tritton Operations: Two Underground Mines
Tritton Operations: Two Underground Mines Tritton underground mine: 1.3mtpa @ 1.9% Cu North East / Larsens: 300ktpa @ 1.8% Cu 19
Slide 20: Tritton Operations: 1.6 mtpa Processing Plant
Tritton Operations: 1.6 mtpa Processing Plant Record throughput 94% recovery 24% copper concentrate grade 20
Slide 21: Tritton Operations: Maintenance & Fleet Strategy
Tritton Operations: Maintenance & Fleet Strategy 2013 /14 - significant investment in operating maintenance and fleet rebuilds 2014 /15 - focus on fleet availability to underpin production Process plant debottlenecking continues – plans to increase throughput to 1.8mtpa 21
Slide 22: Tritton Operations: Established Infrastructure
Tritton Operations: Established Infrastructure Mobile fleet workshop Paste fill plant for Tritton U/G Road Haulage 22
Slide 23: Large Pipeline of Growth Projects to Extend Mine Life
Large Pipeline of Growth Projects to Extend Mine Life 23
Slide 24: Tritton Deeps
Tritton Deeps Depth extensions to Tritton orebody – single largest opportunity for significant ore reserve conversion: Ore Reserve 5Mt @ 1.8% Cu* Mineral Resource 11Mt @ 1.8% Cu* Current Ore Reserve extends to 4,200mRL Mineral Resource extends to 4,000mRL Mineralisation remains open at depth Multi-p
Slide 25: North East / Larsens
North East / Larsens Targeting additional resources to extend mine life Ore Reserve 0.9Mt @ 1.6% Cu* Mineral Resource 1.3Mt @ 1.8% Cu* Deposits located in north of Girilambone Complex Near-mine resource definition drilling planned seeking to extend the deposits and LOM Typical for small mines – expl
Slide 26: Murrawombie Underground
Murrawombie Underground PFS completed Ore Reserve: U/G 3.3Mt @ 1.3% Cu* Mineral Resource: 8Mt @ 1.4% Cu** Largest copper inventory outside Tritton Deposit: 110,000t contained Cu *As at 30 June 2014. **Includes Mineral Resources for Murrawombie Open Pit 26
Slide 27: Avoca Tank
Avoca Tank PFS completed Ore Reserve: 680kt @ 2.5% Cu* Mineral Resource: 903kt @ 2.6% Cu* North of Girilambone Complex and located 2km north of current mining at North East/Larsens Provide higher grade supplementary feed for Tritton Operations Mining lease application being prepared Deposit open bel
Slide 28: Murrawombie Open Pit Extension
Murrawombie Open Pit Extension PFS completed Ore Reserve: 0.7Mt @ 1.2% Cu* Modest expansion (cut-back) of Murrawombie Open Pit Cut-back to access 700kt of sulphide ore Mining of pit expansion to assist with final closure of heap leach pads and save on mine rehabilitation costs Scheduled to follow un
Slide 29: Excellent Exploration Potential
Excellent Exploration Potential 29
Slide 30: Significant Ground Position In Proven Copper Field
Significant Ground Position In Proven Copper Field “Besshi” style VMS orebodies generally occur in clusters Tritton region hosts “Besshi” style VMS deposits Mining to date has been from Girilambone and Tritton complexes – multiple deposits discovered in each Huge exploration potential: • Multiple ne
Slide 31: Proven Exploration Success
Proven Exploration Success Two complexes mined to date characterised by one large deposit (10-20Mt) with multiple smaller (1-5Mt) deposits 31
Slide 32: Target Rich Tenement Package
Target Rich Tenement Package 32
Slide 33: High Potential Targets: Kurrajong
High Potential Targets: Kurrajong EM signature twice the size of Tritton All recent holes intersected mineralisation Three holes indicated grades above 2% Cu Next stage is drilling program to better define target Target 10Mt at >2% 33
Slide 34: High Potential Targets: Avoca Tank Repeats
High Potential Targets: Avoca Tank Repeats Avoca Tank Ore Reserve (as at 30 June 2014): 680kt @ 2.5% Cu, 0.8g/t Au VMS deposits typically occur in clusters Remainder of the magnetic high complex is under- explored Recent aircore drilling delivered exciting results adjacent to known orebody RC drilli
Slide 35: High Potential Targets: Greater Hermidale
High Potential Targets: Greater Hermidale Along strike from Tritton Significant strike extent Exciting recent results Anomalous Cu adjacent to EM anomaly Drill program planned to test targets 35
Slide 36: High Potential Targets: Carters
High Potential Targets: Carters Exciting results from limited drilling Hard work completed – ready to drill Many untested targets in close proximity to Carters 36
Slide 37: Investment Rationale: Poised for Growth
Investment Rationale: Poised for Growth Established and growing copper producer (28,000tpa guidance FY2016) Tritton Operations performing at record levels Board and management team with a proven track record and clear vision and strategy Exciting portfolio of advanced growth projects Extensive landh
Slide 38: Thank you
Thank you Straits Resources Limited Level 2, HQ South Tower, 520 Wickham Street, Fortitude Valley 4006 Brisbane QLD, Australia E: info@straits.com.au T: +61 7 3034 6200 F: +61 7 3034 6290 www.straits.com.au 38