Aeris Resources Ltd (ASX:AIS) has locked in higher copper pricing by entering unsecured A$ copper hedges with Macquarie Bank Limited for 9,000 tonnes at a forward price of A$9,096.80 per tonne from its Tritton Copper Operations in NSW.
The hedges will mature over the next six months in scheduled monthly deliveries of 1,500 tonnes.
Aeris executive chairman Andre Labuschagne said: “With the current copper price significantly above our budgeted pricing for the first half of FY2021, we have taken the opportunity to hedge 75% of our copper production over the next six months.
“Locking in this higher pricing enables us to accelerate exploration and life extension projects at the Tritton Copper Operations, with the first project being the exploration drive to the Budgerygar deposit, which sits adjacent to the Tritton underground mine.”
Shares have been as much as 12% higher to 4.3 cents.
Cracow gold hedging
This copper hedging comes after the company announced earlier in the month unsecured Australian dollar gold hedges with Macquarie Bank Ltd for its recently acquired Cracow Gold Operations in Queensland.
The company has secured hedging for 36,000 ounces at a forward price of A$2,536.25 per ounce.
These hedges, for about 50% of its targeted gold production from Cracow, will mature over the next 12 months in scheduled monthly deliveries of 3,000 ounces.
The company considers it prudent to put these hedges in place to underpin a portion of its operating cashflows whilst still providing exposure to future upside in the Australian dollar gold price.
Exceeding copper guidance
Notably, the company achieved copper production of 25,041 tonnes at the Tritton Copper Operations for financial year 2019-20, about 2% above the upper limit of the previously announced guidance of 23,500 to 24,500 tonnes.
This was achieved despite operations being materially impacted by water availability and water quality issues during the summer months.
Guidance for FY2021
Aeris has revealed its production guidance for FY2021:
- Copper production at the Tritton Copper Operations is 23,500 to 24,500 tonnes at a C1 cash cost of $2.80/pound to $2.95/ pound; and
- Gold production guidance at the Cracow Gold Operations is 70,000 to 75,000 ounces at a C1 cash cost of $980/ounce.