Aeris Annual Report 2022

SIGNIFICANT CHANGES IN
THE STATE OF AFFAIRS
During the financial year ended 30 June 2022, the
primary operating assets of Aeris were its Tritton Copper
Operations, located near the town of Nyngan in central
New South Wales, and the Cracow Gold Operations
located near the town of Theodore in Central Queensland.
On 28 April 2022, Aeris announced the transformational
acquisition of Round Oak Minerals from Washington
H.Soul Pattinson Limited (WHSP) and a A$117 million
equity raise. Round Oak Minerals is an Australian focused
resources company with its primary assets being:
• Jaguar Zn/Cu mine in Western Australia;
• Mt Colin Cu mine in North-West Queensland; and
• Stockman Cu/Zn development project in Victoria.
The transaction completed on 1 July 2022. A$100 million of
the A$117 million equity raise (placement and entitlement
offer) was received by 30 June 2022, with the balance being
received on 1 July 2022. On completion of the equity raise
the company had also obtained approval at the EGM held
on 24 June 2022 to consolidate every 7 ordinary shares into
1 ordinary share. The consolidation took effect in July 2022.
REPAYMENT OF DEBT AND ESTABLISHMENT
OF ANZ BANKING FACILITIES
In July 2021, the consolidated entity repaid the outstanding
balance (US$20.25 million) of its senior debt (Tranche A
(Working Capital) Facility) with Special Portfolio Opportunity
V Limited (SPOV) (a subsidiary of a fund managed by PAG).
Also in July 2021, the consolidated entity entered into
a financing facility agreement with Australia and New
Zealand Banking Group Limited (ANZ) for it to provide:
• A$35 million Contingent Instrument Facility;
• A$20 million Working Capital Facility, and
• Unsecured gold hedging lines.
The ANZ facilities have subsequently been renewed with
the Contingent Instrument Facility increased to A$45 million.
GOLD AND COPPER HEDGING
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; and
• 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.
Gold hedging
In December 2021 Aeris undertook gold hedging for
21,000oz (1,750oz per month from November 2021
and October 2022), at A$2,538.54/oz, and represents
approximately 30% of targeted production at its
Cracow Gold Operations over that period.
In February 2022 Aeris entered into further unsecured
A$ gold hedges with ANZ for 30,000 ounces (1,750oz per
month from March to October 2022; 3,500oz per month for
November and December 2022; and 1,500oz per month
from January to June 2023) at an average forward price
of A$2,635.57/oz.
Cracow gold production is hedged approximately
70% to the end of calendar 2022 and 30% for the first half
of calendar 2023.
The net position of copper and gold hedges settled
during the financial year ended 30 June 2022 totalled
A$7.269 million.
ADVANCING AERIS
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