AIC Mines’ margins are growing by the day due to the surge in the copper price, managing director Aaron Colleran told the RIU Sydney Resources Round-up.
“It’s a great time to be a copper miner,” he said.
“The copper price has come alive, exactly as we’ve been expecting.”
The copper price is currently trading at around US$4.43 per pound, up by almost 19% since the start of the year.
“A copper price starting with a three in terms of US dollars per pound is something we’re about to consign to the annals of history,” Colleran said.
“We’ll soon be talking about US$5/lb like we used to talk about US$4/lb.
“AIC Mines is perfectly positioned for this.”
Colleran said AIC had an experienced and motivated board and executive team.
AIC’s chair is Centamin founder Josef El-Raghy, while Colleran was formerly head of business development at Evolution Mining, orchestrating some of the gold miner’s major deals.
“We know what good looks like. We’ve had success before and are looking to replicate it at AIC Mines,” Colleran said.
AIC acquired the Eloise copper mine in Cloncurry, Queensland in November 2021.
“Eloise was a stepping stone transaction for us,” Colleran said.
“We knew it wasn’t a cornerstone asset for a mid-tier mining company when we acquired it but the path to cornerstone status was clear when we first did our due diligence.
“We’ve transformed Eloise from a hand-to-mouth operation that was due to close in 2023 to a great little project that is now producing free cashflow, has a four-year reserve and a 10-year resource life and importantly, a big future ahead of it as we develop the nearby Jericho deposit.”
Eloise produced 3,066 tonnes of copper in the March quarter at al-in sustaining costs of A$5.49/lb.
The mine is on track to exceed full-year guidance of 12,500t of copper at AISC of A$5/lb and an all-in cost of A$5.20/lb.
At that targeted AIC, Colleran said Eloise would deliver a A$1000 per tonne all-in cost margin, based on the average copper price of A$12,500/t so far this financial year, generating net mine cashflow of A$12.5 million.
“The copper price is currently A$14,800/t so our margin today is A$3300/t, more than tripling our AIC margin and increasing net mine cashflow to A$41.6 million per annum,” he said.
Colleran said AIC’s share price was A37c and had risen to A50c this week, a rise of more than 30%.
“But our AIC margin is up 220% compared to where we were a year ago so our share price clearly has a lot of catching up to do,” he said.
Argonaut analyst George Ross said last week that AIC was highly leveraged to the copper price.
“AIC is ideally positioned to benefit from a copper bull market with the Eloise mine transitioning to positive cashflow and significant expansion scheduled for the coming years,” he said.
“Future price catalysts include results from drilling at Swagman, near-mine exploration success guided by the new in mine EM loop, and progression of funding/studies/permitting associated with the Jericho development and upscaled Eloise plant.
“We anticipate any further improvement in copper and gold metal prices would be closely reflected in AIC’s share price.”
Argonaut maintained a speculative buy recommendation and lifted its price target from A55c to A65c.
Colleran said the company was in debt talks for the Jericho development with strong interest shown by lenders and offtakers.
Term sheets are due by the end of June.
“Copper is the right place to be,” Colleran said.
“Copper demand is about to explode.”
