Aeris Annual Report 2022

MATERIAL BUSINESS RISKS
Aeris prepares its business plan using estimates of production and financial
performance based on a range of assumptions and forecasts. There is
uncertainty in these assumptions and forecasts, and risk that variation
from them could result in actual performance being different to expected
outcomes. Aeris acknowledges that business risks have the potential to
change over time and continually reviews key risks and uncertainties that
have the potential to impact the business.
The uncertainties arise from a range of factors, including
the nature of the mining industry, and general economic
factors. The material business risks faced by the Group
that may have an impact on the operating and financial
prospects of the Group at period end are outlined below.
PRODUCT SALES AND COMMODITY PRICE RISK
Aeris derives its revenues mainly from the sale of copper
and gold and/or associated minerals. Consequently,
Aeris’ potential future earnings, profitability and
growth are influenced by the demand for and
price of copper, gold and associated minerals.
Copper and gold are globally traded commodities and
their prices over time may rise or fall. Commodity prices
fluctuate and are affected by factors including supply and
demand for mineral products, hedge activities associated
with commodity markets, the costs of production and
general global economic and financial market conditions.
These factors may cause volatility which in turn, may
affect Aeris’ ability to finance its operations and/or bring
Aeris’ products to market. Aeris may enter into hedging
arrangements from time to time to partially protect
against changes in commodity prices. When these
arrangements expire, there is no guarantee that the
Company will be able to secure replacement hedging
arrangements on terms satisfactory to the Company.
Aeris’ prospects and market value will be influenced from
time to time by the actual and prevailing views on the
short-term and long-term prices of these commodities.
EXCHANGE RATE RISK
A number of the Company’s commercial arrangements,
including copper sale arrangements and finance
arrangements, are based on US dollars. The Company
also acquires equipment from overseas using foreign
currency. Accordingly, the revenues, earnings, costs,
expenses, assets and liabilities of the Company may be
exposed adversely to exchange rate fluctuation. Further,
the future market value of the Company’s Shares may
fluctuate in accordance with movements in the exchange
rates and interest rates.
MINERAL RESOURCES AND ORE RESERVES
In order to calculate Mineral Resources and
Ore Reserves, estimates and assumptions are required
about a range of geological, technical and economic
factors. Estimating the quality and/or grade of the
Mineral Resources and Ore Reserves requires the size, shape
and depth of mineral and ore bodies to be determined
by analysing geological data such as drilling samples.
This process may require complex and difficult geological
judgements and calculations to interpret the data.
As the economic assumptions used to estimate
Mineral Resources and Ore Reserves change from year
to year, and as additional geological data is generated
during the course of operations, estimates of
Mineral Resources and Ore Reserves may change from
year to year. Changes in reported Mineral Resources
and Ore Reserves may have either a positive or negative
impacton the consolidated entity’s financial results.
ADVANCING AERIS
51