How Aeris Resources’ $60M Refinancing Fuels Growth Without Equity Dilution

Refinancing Overview

Aeris Resources Limited (ASX: AIS) has announced a significant refinancing of its debt and guarantee facilities, marking a strategic move to enhance its financial flexibility and support medium-term growth ambitions. The company has executed a binding term sheet with Washington H. Soul Pattinson (WHSP) for a $60 million Guarantee Facility, which will replace the existing $50 million environmental bonding facility previously provided by ANZ.

This new Guarantee Facility, with a three-year term, not only increases the bonding capacity by $10 million but also offers more favourable terms, including no mandatory hedging and no cash backing or repayments required for over 12 months. This arrangement is designed to free up cash flow, enabling Aeris to invest in key projects such as the Constellation development at Tritton and ongoing exploration activities.

Extension of Term Facility and Liquidity Impact

Alongside the Guarantee Facility, Aeris has extended its existing $50 million Term Facility with WHSP, currently drawn to $40 million, to 31 August 2026. This extension provides the company with a longer runway to improve production and cash flow, particularly at the Tritton operation. The refinancing also releases $10 million in restricted cash previously held against the ANZ facility, boosting Aeris’s unrestricted cash balance to approximately $32 million and total liquidity to $42 million when including undrawn debt.

Executive Chairman Andre Labuschagne highlighted that the refinancing positions Aeris well for growth, emphasizing WHSP’s long-term commitment. The company’s decision to extend the term facility rather than pursue an equity raising reflects a strategic choice to avoid dilution amid challenging market conditions, while still maintaining a strong balance sheet.

Terms and Conditions

The Guarantee Facility carries an interest rate of 8.95% and includes standard market covenants. It requires quarterly cash backing of $3.5 million starting after the fourth calendar quarter post-financial close, which is expected in June 2025. The facility is secured by a first-ranking general security deed over Aeris’s assets, subject to an ASX waiver or shareholder approval due to WHSP’s significant shareholding.

Additional fees include a 3% establishment fee and exit fees ranging from 4% to 5% depending on the timing of cash backing. The Term Facility extension involves a $1.5 million fee payable in instalments and increased exit fees if not repaid by January 2026. These terms reflect a balance between providing Aeris with flexibility and ensuring WHSP’s investment is adequately protected.

Strategic Implications

This refinancing deal underscores Aeris’s focus on maintaining financial discipline while supporting its growth pipeline. By securing longer-dated facilities with no immediate repayment pressures, Aeris can prioritise capital allocation towards operational improvements and exploration. The release of restricted cash further strengthens working capital, providing a buffer against market volatility.

However, the finalisation of the Guarantee Facility depends on regulatory approvals, including a potential ASX waiver or shareholder consent, introducing some uncertainty. Investors will be watching closely for the outcome of these approvals and the company’s subsequent financial disclosures to gauge the impact on liquidity and capital structure.