AIC Mines reported steady progress on its Eloise processing plant expansion and commenced ore processing at Jericho, while elevated diesel prices and unseasonal rain pushed costs above guidance in the June quarter.
- Eloise produced 2,683 tonnes payable copper at AISC $6.15/lb
- Jericho ore processing started, contributing 304 tonnes copper
- Eloise expansion 81% complete, commissioning on track for Dec 2026
- FY26 copper production met guidance with strong cash flow
- Exploration confirms high-grade mineralisation at Eloise and Jericho
Eloise Expansion Progress and Jericho Processing Commencement
AIC Mines (ASX:A1M) marked a significant milestone in its Queensland copper operations with the installation of a new ball mill at the Eloise processing plant, a key component in its expansion to 1.1Mtpa. The engineering, procurement, and construction (EPC) contract with GR Engineering Services (GRES) is 81% complete, although construction progress of 55% lags the planned 64% due to delayed deliveries of conveyor structures and surge bin. Crucially, GRES confirmed this will not affect the critical path, keeping commissioning on track for the December 2026 quarter.
Meanwhile, Jericho copper ore processing began during the quarter, blending 23,000 tonnes of ore with Eloise feedstock. Metallurgical trials delivered on-spec concentrate with copper grades and recoveries within expected ranges, providing confidence in the processing assumptions for the expanded plant. Jericho contributed 304 tonnes of payable copper and generated a positive cash margin of $2.5 million, although this is treated as pre-commercial production and accounted against project costs.
Production, Costs, and Operational Challenges
Eloise produced 2,683 tonnes of payable copper and 1,439 ounces of gold in the June quarter, with concentrate output affected by unseasonal 87mm rainfall that hampered drying and limited concentrate sales. This weather disruption, combined with elevated diesel prices linked to Middle East conflict, pushed all-in sustaining costs (AISC) to $6.15 per pound of copper sold; well above the FY26 guidance range of A$4.85 to A$5.25 per pound.
Diesel costs, comprising roughly 10% of production expenses, added approximately $0.60 per pound to AISC, exceeding prior estimates due to lower sales volumes and concentrate stockpiling. At quarter-end, Eloise and Jericho held 2,503 dry metric tonnes of concentrate containing 663 tonnes of copper, valued at about $13.7 million based on copper prices of A$19,422 per tonne. This stockpile is expected to clear in the September quarter, underpinning stronger sales and cash flow.
Exploration Success Supports Resource Growth
Exploration drilling continued to bolster confidence in the resource base at both Eloise and Jericho. Two resource definition holes at Eloise Deeps confirmed continuity of high-grade mineralisation, with intercepts up to 37.8 metres grading 3.8% copper and 0.9 g/t gold. At Jericho, infill drilling at the Jolly Shoot; the initial mining target; returned high-grade results including 4.3 metres at 7.1% copper and 1.3 g/t gold, reinforcing the deposit's potential and supporting ramp-up plans.
Surface drilling also extended mineralisation at Jericho’s Matilda North shoot, suggesting potential for additional mining areas between Jolly and Matilda. Exploration at the Eloise Regional Project and Windsor Project progressed with soil surveys and geophysical work, although assay results for recent drilling at Eloise South, Iris, and Big Foot prospects remain pending.
Financial Performance and Outlook
For FY26, AIC Mines reported copper production of 13,064 tonnes at an AISC of $4.99 per pound, meeting guidance and generating $240.6 million in metal sales after treatment charges and by-product credits. Operating cash flow reached $120.5 million, supporting ongoing Jericho development and Eloise expansion. The company ended the quarter with $41.7 million in cash, bolstered by two $10 million drawdowns on its $40 million US dollar prepayment facility with Trafigura.
Looking ahead, AIC Mines plans to release FY27 production, operating, and capital cost guidance, along with FY28 and FY29 outlooks for the combined Eloise and Jericho operations, pre-market on 20 July 2026. The commissioning of the expanded Eloise plant and ramp-up of Jericho production remain pivotal near-term catalysts amid cost pressures from diesel and weather-related disruptions.
Bottom Line?
AIC Mines is navigating elevated costs and operational challenges while advancing its Eloise expansion and Jericho ramp-up, with upcoming FY27 guidance set to clarify the path ahead.
Questions in the middle?
- How will ongoing diesel price volatility impact AIC Mines' cost structure and margins in FY27?
- Can the Eloise processing plant expansion maintain its December 2026 commissioning timeline amid construction delays?
- What will the FY27 guidance reveal about production growth and cost management for the combined Eloise and Jericho operations?