Can AIC Mines Sustain Costs Amid Deepening Operations and Expansion?
AIC Mines has delivered strong FY25 production and financial results while securing key contracts and financing to expand its Eloise processing plant and advance the Jericho copper deposit development.
- Eloise mine achieves 12,863t copper and 5,955oz gold production at competitive costs
- EPC contract awarded to GR Engineering for Eloise plant expansion to 1.1Mtpa
- Jericho Access Drive development on track for first ore in June 2026
- Exploration drilling confirms higher-grade, continuous mineralisation at Jericho
- Secured US$40M prepayment facility and $55M placement to fund growth
Strong Production and Financial Performance
AIC Mines has reported a robust quarter ending 30 June 2025, with the Eloise copper mine delivering 3,202 tonnes of copper and 1,612 ounces of gold in concentrate at an all-in sustaining cost (AISC) of $4.58 per pound of copper sold. For the full fiscal year 2025, Eloise produced 12,863 tonnes of copper and 5,955 ounces of gold, meeting and slightly exceeding guidance targets. This consistent performance marks the eighth consecutive quarter of achieving production guidance, underscoring operational stability and efficiency.
Financially, the company generated $28 million in operating cash flow during the quarter and $16 million in net mine cash flow after capital expenditures. AIC Mines ended the quarter with a strong cash position of $60.9 million, nearly doubling from the previous quarter, bolstered by metal sales and strategic financing.
Advancing Growth Through Plant Expansion and Jericho Development
To support future growth, AIC Mines awarded an Engineering, Procurement, and Construction (EPC) contract to GR Engineering for expanding the Eloise processing plant from 725,000 tonnes per annum to 1.1 million tonnes per annum. Construction is slated to begin in October 2025, with commissioning expected in the December 2026 quarter. This expansion aligns with the ramp-up of production at the Jericho copper deposit, where the underground access drive is progressing on schedule and expected to reach first development ore by June 2026.
The Jericho project is shaping up as a significant contributor to AIC Mines’ portfolio, with recent drilling exceeding expectations. Exploration results revealed higher-grade and more continuous mineralisation at the northern end of the deposit, including extensions of high-grade shoots down-plunge. These findings enhance the resource base and bode well for a smoother production ramp-up.
Exploration and Regional Prospects
Beyond Jericho, AIC Mines continues to advance its exploration pipeline across the Eloise Regional Project and other Australian tenements. Drilling programs at prospects such as Arlington, Yukon, Defiance, and Bagdad are underway, with assay results pending. Ground electromagnetic surveys have identified new anomalies, potentially indicating further sulphide mineralisation. The company is also rationalising its Marymia Project tenure and conducting geophysical surveys at Delamerian and Cannington projects, demonstrating a balanced approach between near-term production and longer-term exploration upside.
Robust Financing to Support Expansion
To fund its ambitious growth plans, AIC Mines secured a US$40 million prepayment facility with Trafigura Asia Trading Pte Ltd, linked to an offtake agreement for Jericho ore. Additionally, the company completed a $55 million placement to institutional and sophisticated investors, including strategic support from Hawke’s Point. A $25 million surety bond facility was also established, replacing previous cash-backed environmental bonds and offering a more cost-effective solution for regulatory requirements. The company launched a Share Purchase Plan aiming to raise up to $10 million from eligible shareholders, closing on 28 July 2025.
Outlook and FY26 Guidance
Looking ahead, AIC Mines targets FY26 production from Eloise to be consistent with prior years, with copper production forecast between 12,800 and 13,100 tonnes and gold between 6,000 and 6,500 ounces. The company anticipates all-in sustaining costs to remain competitive, assuming stable gold prices as by-product credits. Capital investment will focus on sustaining underground development, resource drilling, Jericho mine development, and the Eloise plant expansion. This disciplined approach aims to maintain operational momentum while positioning AIC Mines for significant growth from FY28 onwards.
Bottom Line?
With production targets met and expansion projects well underway, AIC Mines is poised for a transformative growth phase, though execution risks and commodity price volatility remain key watchpoints.
Questions in the middle?
- How will the ramp-up at Jericho impact overall production and costs beyond FY26?
- What are the potential effects of share dilution from the placement and Share Purchase Plan on shareholder value?
- How might fluctuations in gold and copper prices influence AIC Mines’ cost guidance and cash flow?