Australia's fifth largest copper producer, Aeris Resources Ltd (ASX:AIS) will up the pace of development at its Tritton operations near Nyngan in New South Wales, with a decision to develop the Murrawombie Underground copper mine.
First ore is expected be delivered to the Tritton processing plant in Q4, FY16.
Aeris, formerly Straits Resources operates multiple copper mines and a copper processing plant at Tritton, which together generated a hefty $92.8 million (+4%) in top line revenue for the half year to December 2015.
In FY2015, production from Aeris’ Tritton operations achieved record of 30,245 tonnes of copper metal.
The impetus to mine underground at Murrawombie is a positive feasibility study that projected a low capital expenditure, seven year mine life at up to 650,000 tonnes per annum based on an Ore Reserve of 3.3 million tonnes at 1.3% copper.
The Murrawombie deposit is located in the southern area of the Girilambone Complex close to the current operating Larsens and North East mines with most infrastructure already in place.
With site works commencing and the portal and 600 metres of the decline already established, Murrawombie will deliver first ore as early as the end of June.
Handily, production from Murrawombie will neatly replace current production from the Larsens and North East mines, which will finish in in July 2016.
The higher volume and longer life deposit will increase the supply of ore to the copper processing plant.
The $14.9 million in CAPEX for Murrawombie can be funded out of operating cashflows and a US$25 million working capital facility.
The deposit is the largest known concentration of copper metal on Aeris’ tenements outside the Tritton deposit and was previously mined in the 1990s as an open pit until it as put into care and maintenance during the GFC in 2008.
Murrawombie will increase the throughput of the processing plant to a rate of about 1.8 million tonnes per annum in FY17 and beyond, delivering production efficiencies at Tritton combined with existing ore being mined at Tritton.
At Tritton, all copper concentrate produced is sold to Glencore, following a life of mine offtake agreement struck in September 2012.
C1 unit cash costs for the quarter of A$2.41/lb. There also looks to be highly prospective advanced regional exploration targets at Tritton creating a pipeline for growth to leverage the Aeris' established infrastructure at Tritton.
Of interest, Aeris is believed to be actively reviewing M&A opportunities as well.
Aeris had useable cash and receivables of $13.5 million, an increase of $2.9 million on the previous quarter.
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