I noticed this update was also posted on LinkedIn the other day. Always a good read when we are making steady progress for a stronger SP.
Aurelia Metals ascends to thepeak
Two is better than one for Aurelia Metals (ASX: AMI). To meet mountingcopper demand amidst a global push for decarbonisation, the company is rapidlyprogressing the Federation Project, integrating it with the capable Peak Minewith the aims of producing 100,000-140,000t in FY25 and looking towards a fullcapacity operation in CY26.
Leveraging its strong financial position and efficient approval process,the success of the Federation Project is a case study in attracting significantindustry interest.
Expedited timelines
Following first discovery in 2019, the company, from the outset focusedon rapid development.
Aurelia Metals chief executive and managing director Bryan Quinn saysthe move from discovery, to studies, to exploration and permitting happenedvery quickly.
Defying the norms of a traditionally long and complex discovery toproduction journey, by 2022 Aurelia had secured an exploration lease and by2023 approvals were in place to begin development.
“There’s been more, pretty impressive, drilling completed around theresource to define its final extent,” Mr Quinn said.
“A parallel study was undertaken to understand how best to process thematerial, whether on-site or off-site, and to determine the optimal throughputcapacity to generate value.”
The company is well on the way to actualising its vision, as the Peakprocessing facility has already processed the first ore from the FederationMine.
The ore has shown positive initial recovery performance of zinc, leadand gold and the concentrates produced are within offtake specifications.
With promising initial results, an accelerated timeline, strategicintegration with Peak Mine, a clear vision for future production and promisingmarket trends, Aurelia is positioned for a bright future.
Production timeline andfinancial viability
With approvals in place and mining infrastructure progressing, the company is focused on its production targets.
“We’re targeting around 100,000 to 140,000t tons in FY25,” Mr Quinnsaid.
“By the end of that fiscal year, around June, we expect to be atcommercial production levels.
“From there, we want to ramp up to 50,000t in CY26, moving toward fullcapacity.”
Aurelia is projecting a positive cash flow by the end of FY25 with theview to ramp up in CY26 from a reinvestment and continued expansionperspective.
Meeting the copper demand boom
As companies work towards their net zero commitments, and the worldcontinues to accelerate electrification and decarbonisation efforts, the demandfor copper continues to soar.
“Copper has a very strong future,” Mr Quinn said.
“Just based on the mega trends out there in terms of what’s required fordecarbonisation, copper is going to be something which continues to trendupward.”
Projected market drivers are based on the sheer volume of big companiesnearing the conclusion of their 10-year net zero commitments. Limited supply ofthe resources required to meet these promises could see an unprecedentedincrease in price.
Economic and industry outcomes
The project has significant implications for the local economy and theindustry at large. The increased production capacity and focus on high-demandmetals is set to create jobs, boost regional economic growth and contribute toAustralia’s standing as a leading producer of critical minerals.
Additionally, the expansion of the Peak Mine’s capacity showcases howexisting mining assets can be leveraged for maximum efficiency, allowing theproject to confidently ride the waves of volatile mining cycles. The case studyoffers industry lots of learning opportunities from an optimisationperspective.
Mr Quinn says mining is very cyclical.
“The key to all of these mining companies is to make sure your coststructure is at the lower end of the cost curve, so that you can withstand allthe storms.
“Our journey is always going to be about having a good cost structureand the right commodities.”
Harnessing local power
Committed to ensuring that the economic benefits of the Federationproject flow directly into regional NSW, Aurelia Metals has prioritised hiringlocally, sourcing employees from Dubbo, Orange, Mudgee and other nearbycommunities.
“We want to see Cobar and the local regions get the benefit of beingthere,” Mr Quinn said.
“Now it’s easier said than done, so we need to be pragmatic. We’re notalways going to find people who want to live in Cobar.”
To address these recruitment challenges, the company is offeringdrive-in, drive-out (DIDO) opportunities for those based in surroundingregions. Aurelia relies on a small proportion of contracted workers to fillcritical skill gaps. While not the ideal solution, this approach ensures theproject can continue to operate smoothly while maximising opportunities forregional workers.
Peak Mine synergies
Made up of two sections, the North and South mines, Mr Quinn says PeakSouth Mine is slowing down in lead-zinc-gold production just as Federation isramping up in those same materials.
“While we transition Peak Mine toward more copper-heavy production inthe North, Federation keeps our plant full of high-quality lead, zinc and goldores,” he said.
“This allows us to optimise plant operations and maximise value.”
Federation’s accelerated trajectory is largely being driven by itsseamless integration with the Peak Mine and processing facility in Cobar, asynergistic integration that has facilitated streamlining and efficiency gainsthat is paying in dividends.
Aurelia’s bespoke Peak processing facility can also handle high-metallicores, including lead, gold, zinc and silver.
Looking ahead: future growth
With the mining lease granted and approvals largely in place, focus onFederation has shifted to ramping production to full operational capacity.Expecting to reach this milestone by CY26, Aurelia is well-positioned forsustained growth.
In the first half of FY25, Aurelia undertook extensive undergroundexploration programs within the Peak Mine.
Significant copper was intersected at Kairos, in the Peak South Mine,and at Jubilee North and New Cobar, in the Peak North Mine. Significant goldand copper were also intersected in drilling at Hercules, in the Peak SouthMine.
“It’s been an impressive journey from discovery to production,” Mr Quinnsaid.
“We’re confident in our ability to deliver on our targets and continueto grow in line with market demand.”
With copper demand showing no signs of slowing and regulatory approvalssecured, the project stands to continue to be a key example of the power ofefficient planning and excellent strategic execution, and how this translatesto successful mining organisation outcomes.
GLTASH
Regards,
Peakabooau
(20min delay)