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AIC sizes up new kid on the block

opper producer AIC Mines Ltd has audaciously pounced
Con newcomer Demetallica Ltd as it looks to shore up future
feedstock for the Eloise mine in Queensland.
AIC last month announced an off-market takeover for Deme-
tallica and its flagship Jericho copper project which lies just 4km
south of the 750,000 tpa processing plant at Eloise. The offer is
valued at $36 million, or 33.7c/share, and comes less than four
months after the target listed on the ASX via a $15 million IPO.
Demetallica was advising shareholders to take no action on
the offer as this edition went to print.
If the acquisition is completed, AIC will boast a resource base
of 245,000t copper and 188,100oz gold around the Eloise cop-
per operations it formally purchased from FMR Investments Pty
Ltd last November.
AIC managing director Aaron Colleran said the combination
of his company with Demetallica had “strong strategic rationale”.
“When we acquired the Eloise copper mine in November
2021, we signalled that we could add value through exploration AIC believes a combination with Demetallica will boost the mine life at
success, resource growth, operational reliability and regional its Eloise copper-gold operations in Queensland beyond 10 years
consolidation,” he said.
“We have delivered exploration success and resource growth. “That being said, AIC isn’t turning its back on gold. We’re still
We have invested in new equipment and maintenance to im- exploring for gold [at Marymia in Western Australia] and we will
prove operational reliability. We are now moving forward with always talk about ourselves as a gold and copper company. We
regional consolidation. will continue to look at gold opportunities because the company
“Combining AIC and Demetallica is a logical consolidation. and the board has a lot of experience in gold and would happily
The tenement holdings of the two companies adjoin. The Eloise own a gold mine again.”
processing facility is only 4km from Demetallica’s Jericho de-
posit. Combining these assets will provide the quickest and
most efficient means of developing and mining the Jericho de-
posit – to the shared benefit of both AIC and Demetallica share-
holders.”
The implied price of AIC’s offer for Demetallica is higher than
the best price the target’s shares have traded since listing on
May 26.
Located about 60km south-east of Cloncurry, Eloise is fore-
cast to produce 12,500t copper and 6,000oz gold-in-concen-
trate in FY2023 at an AISC of $4.50/lb copper.
AIC believes the acquisition of Jericho, part of Demetallica’s
larger Chimera project, will lift output to 20,000 tpa copper and
10,000 ozpa gold for more than 10 years, based on a staged
expansion of the existing processing plant to 1.4 mtpa, a 60%
increase on the current production rate.
Demerged from kaolin hopeful Andromeda Metals Ltd after
it absorbed stablemate Minotaur Exploration earlier this year,
Demetallica also has three other Queensland projects – Can-
nington, Windsor and Pyramid – and two South Australian as-
sets – Peake and Denison – in its portfolio.
Speaking to Paydirt earlier this year, Colleran described him-
self as an “unashamed copper bull” despite carving out an im-
pressive career prior to AIC with revered gold producers Sino
Gold Mining and Evolution Mining Ltd.
“Copper is a wonderful place to be, especially because of the
tailwinds we’ve got with the transition to a net zero economy,”
he said at the time.
“The nice part of being a copper miner is we’re now produc-
ing a metal that the world desperately needs versus gold, which
many will tell you is just a decoration. Most people could do
without a gold necklace if they needed to, but the world certainly
won’t be able to do without a copper electricity transmission line
as we reset the transmission grid for renewable power.

aUSTRaLIa’S PaYDIRT OCTOBeR 2022 Page 13