The Aeris Resources Ltd (ASX: AIS) share price fell 16% after giving a market update that included a profit warning.
Aeris is a copper, gold and zinc miner in Australia.
Weak FY23 update
The business initially revealed some positive news.
It said that its Tritton project met its revised FY23 copper production guidance of 17,205 tonnes, with “good contributions from the newly commissioned high-grade Avoca Tank mine and higher grade ‘stopes’ (mine excavation steps or notches) at the Tritton mine in the June quarter. Copper production in June was 2,436 tonnes, which was Tritton’s best production month since 2019.
At the Cracow project, FY23 gold production of 48,220 ounces met guidance. Construction of the tailings dam lift “has commenced”, providing tailings capacity “for another three years.”
In North Queensland, mining activities at Mt Colin for the fourth quarter were “in line with plan”. Mt Colin was on track to be at the upper end of its revised FY23 copper production guidance of between 8kt to 9kt, but the 70kt processing run scheduled for June at the Ernest Henry processing plant was deferred by Evolution Mining Ltd (ASX: EVN) until the first half of July.
At the Jaguar project, production was below plan. Aeris Resources said that over the last few months, Bentley has experienced “three separate mining-induced seismic events in the lower levels of the mine. These events interrupted production activities and delayed access to higher grade stopes. The mine plans for Jaguar in FY24 “are being reviewed” because of these production impacts.
Profitability guidance
As a result of the Jaguar and Mt Colin operational issues, the company decided to remove its EBITDA (EBITDA explained) guidance for FY23.
However, it did say that operating and capital costs are expected to be “within guidance” and the company will update the market in the June quarterly activities report.
Final thoughts on the Aeris Resources share price
This is definitely not ideal for the company, particularly as the market tends to focus more on the shorter-term than the longer-term.
We’ll have to see what these developments mean for Jaguar, but the ASX miner could still have a positive longer-term future because of its exposure to copper (which is seeing growth demand because of decarbonisation) and then the business is looking to expand its mining portfolio.
It could be an opportunity for a two or three year resurgence as production and earnings come through, but I wouldn’t expect a big rise over the next three months at the least because of the current issues.
