Aeris Annual Report 2022

Aeris Resources Limited
Notes to the consolidated financial statements
30 June 2022
22. Financial instruments (continued)
Sensitivity
Based on the financial instruments held at 30 June 2022, had the Australian dollar weakened/strengthened by 10%
against the US dollar with all other variables held constant, the consolidated entity's profit for the year would have been
$0.329 million higher (2021 profit: $1.485 million lower) or $0.269 million lower (2021 profit: $1.215 million higher),
mainly as a result of foreign exchange gains/losses on translation of cash and cash equivalents, interest-bearing loans,
receivables and payables denominated in foreign currencies. There would have been no impact on equity.
The carrying amount of the consolidated entity's foreign currency denominated financial assets and financial liabilities at
the reporting date were as follows:
Assets
Liabilities
2022 2021 2022 2021
$'000 $'000 $'000 $'000
US dollars 3,372 8,529 50 27,803
(ii) Commodity price risk
Commodity price risk is the risk of financial loss resulting from movements in the price of the consolidated entity's
commodity outputs.
During the financial years ended 30 June 2022 and 30 June 2021, a portion of the consolidated entity's revenue from
mining activities was cash flow hedged through unsecured gold and copper hedges.
Gold hedging
In December 2021, Aeris undertook gold hedging for 21,000 oz (1,750 oz per month from November 2021 to October
2022), at A$2,538.54/oz. During the year ended 30 June 2021 gold hedging was undertaken for 36,000 oz (3,000 oz per
month from July 2020 to June 2021) at A$2.536.25/oz.
Copper hedging
In July and August 2021 Aeris had also settled previous hedging undertaken namely:
● 833 tonnes per month at a forward Price of A$9,228 ending July 2021
● 667 tonnes per month through a Zero net Premium Option Collars where Aeris buys puts (strike price A$10,000/t)
and sells (strike price A$11,100/t) call options to form a collar structure with zero premium payable, ending July
2021
Aeris also entered into unsecured copper hedging arrangements with Macquarie Bank Limited on 13 July 2021. The
hedges covered the period from August 2021 to June 2022 in scheduled monthly deliveries of 550 tonnes (6,050 tonnes
in total). The hedges were through Zero net Premium Option Collars, where Aeris buys puts and sells call options to form
a collar structure with zero premium payable:
● The strike price of the put options is A$11,900/t; and
● The strike price of the call options is A$12,900/t.
During the year ended 30 June 2021, Aeris undertook the following copper hedges:
● 9,000 tonnes (1,500 tonnes per month from August 2020 to January 2021) at A$9,096.80/t;
● 5,000 tonnes (833 tonnes per month from February 2021 to July 2021) at A$9,228/t; and
● 4,000 tonnes (667 tonnes per month from February 2021 to July 2021) through a Zero Net Premium Option Collar,
where Aeris buys put options and sells call options to form a collar structure with zero premium payable, with:
- a strike price of the put options at A$10,000/t; and
- a strike price of the call options at A$11,100/t.
AERIS ANNUAL REPORT 2022
(iii) Interest rate risk
Interest rate risk arises as a result of the re-pricing of investments, interest bearing receivables and borrowings and is
affected by the length of the re-pricing period.
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