Aeris Resources Ltd (ASX:AIS) has implemented changes to the mine plan at its Tritton Copper Operations in New South Wales with a new 'quality over quantity' strategy resulting in the company meeting production guidance in FY22.
There has been an improvement in production since the new “turnaround” strategy was implemented just over six months ago and in FY22 there were 18,581 tonnes of copper produced at an AISC of A$5.10 per pound.
Production was within guidance of 18,500-19,500 tonnes while AISC was above the FY22 guidance of $4.60-$4.85 per pound.
Meanwhile, the company’s Cracow Gold Operations in Queensland produced 53,920 ounces during the 12 months, below FY22 guidance of 56,000-59,000 ounces.
AISC was A$1,911 per ounce, which was above the guidance range of $1,775-$1,825 per ounce.
Tritton delivers
Aeris’ executive chairman Andre Labuschagne said: “Our turnaround strategy at Tritton continues to deliver with 5,126 tonnes of copper produced in the June quarter, enabling the production guidance to be achieved.
"Unfortunately, Cracow again underachieved on its production targets, primarily due to lower gold grades realised.”
“Significant achievements”
"Despite a challenging operating environment, including COVID impacts, a tight labour market and inflation-related price increases, there were numerous significant achievements for Aeris in FY22,” Labuschagne said.
"Tritton recognised the need to change operating strategy mid-year and has delivered improved production performance.
"Life extension (Budgerygar and Avoca Tank) and exploration projects (Constellation) at Tritton were progressed during the year and the Golden Plateau deposit at Cracow is an evolving exploration story that we are quietly excited about.
"And let’s not forget the transformational acquisition of Round Oak Minerals, which means we start FY23 with four operating mines, a long-life development project in Stockman, strong cash balance and no debt.
"Our focus is now well and truly on delivering across our portfolio in FY23.”
Tritton turnaround
During the December quarter, Aeris recognised that the ‘fill the mill’ operating strategy for Tritton was impacting production targets due to low-grade ore feed from the Tritton mine.
Subsequently, the Tritton team implemented changes to the mine plan, including increased cut-off grade for stope designs and a focus on dilution control.
This operating strategy has taken effect in the last six months, resulting in FY22 copper production being within guidance.
'Quality over quantity'
The new strategy of focusing on ore 'quality over quantity' will accelerate in FY23 with new, high-grade ore sources at Budgerygar and Avoca Tank coming online.
Aeris said Tritton AISC was slightly above the top end of guidance, primarily as a result of cost and labour market pressures, which were impacting the whole industry, but which the company was working hard to contain.
New employment policies to reduce labour turnover had been introduced, it said, and group-wide purchasing initiatives to reduce input costs were being implemented.
The company also progressed life extension projects at Tritton during the year to set the operation up for the future.
Drilling continued at the Constellation deposit with a maiden mineral resource declared in December 2021 and an update planned for the coming weeks.
Development of the Budgerygar and Avoca Tank deposits advanced in FY22 with both mines scheduled to contribute to production in the current financial year.
As well as improving head grade, these new ore sources will allow greater production flexibility and reduced variability.
Cracow challenges
The Cracow Gold Operations had a challenging year and as a result, FY22 production guidance was not achieved.
Mined gold grades underperformed compared to internal targets for FY22 due to the geology models overestimating grades in areas outside the high-grade core of the Western Vein Field deposits.
Aeris said it had undertaken a significant amount of work to address the issues, with geological models rebuilt to increase grade confidence and improve production planning for FY23.
Productivity in remnant mining areas was also lower than anticipated and planning assumptions for these areas have been revised.
The company said that the lower FY22 gold production was also the primary contributor to the higher than targeted AISC.
“In absolute dollar terms, opex and sustaining capex were below internal targets, reflecting a strong focus on cost management by the site team.
“Like Tritton, Cracow was also impacted by labour availability and general cost inflation.”
Life extension opportunities
The company continues to focus on life extension opportunities at Cracow and now has more priority targets than when the operation was acquired two years ago.
Drilling at the historic Golden Plateau deposit returned high-grade drill intersections and a maiden mineral resource is planned for the current quarter.
Golden Plateau offers the potential for a new, high-grade production source for Cracow in the near term to offset declining grades in the Western Vein Field.