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the last couple of years and the resource
base was getting a bit smaller the footprint
for exploration and discovery was getting
smaller. So, we felt it was an opportune
time to exit that asset,” Klein said.
“For Aeris, a smaller company, it may
be a good foundation for them. Aeris is
talking about spending $30 million on ex-
ploration over the next few years and it
[Cracow] wouldn’t have competed for that
capital allocation in our portfolio which
has, of course, been upgraded.”
Aeris has been eagerly seeking assets
to complement its Tritton copper mine in
New South Wales for several years. It
failed in an ambitious attempt to prize the
CSA copper mine in NSW from Glencore Aeris believes it has the right skills set to build on Evolution’s
last year but Labuschagne believes Cra- consistent performance at Cracow
cow is the perfect fit for the company.
“We’ve been looking for a long time Aeris has forecast group EBITDA of over nine years.”
to grow the business. We’ve stated very $272-282 million over the first two years Labuschagne also acknowledged that
clearly that we want to grow to a mid- after acquisition, meaning Cracow will be- professional attitude but believes the mine
sized, multi-mine company looking for come an immediate contributor to group could benefit from renewed focus.
copper and gold assets. We have a long production. “I wouldn’t say they didn’t give it dedica-
history [in gold], having run Norton Gold Longer term, potential lies in reinvigor- tion, but we bring a little bit of a different
Fields’ underground mines, so this fits ating the exploration push. Reserves cur- skills set,” he said. “We are happy with
very nicely with us.” rently stand at 114,000oz @ 5.8 g/t with a something a bit smaller which we can
While it may not fit in the bulging Evolu- further 345,000oz @ 4.2 g/t in resources. work harder and see if we can extract
tion portfolio, Cracow is far from a bust- Labuschagne said Aeris planned to im- value from it.”
ed flush. It is forecast to produce up to mediately start work on building those And, just as Evolution did nearly a dec-
87,500oz gold in FY2020 at C1 cash costs numbers. ade ago, Aeris may use Cracow as the
of less than $980/oz. “We will kick off immediately the ex- cornerstone of its push for mid-tier status.
For Labuschagne, the mine’s strong op- ploration programme,” he said. “There “I said to Jake that this was their starting
erational performance was a compelling are underground opportunities, open pit asset, so maybe it can start another one,”
reason to act. opportunities and regional opportunities Labuschagne said. “We always said we
“The one big benefit is we are getting so we have allocated quite a significant wanted to grow to be a mid-tier multi-mine
a very well-run asset,” he said. “Evolution amount of money; $13 million in the first company.
is well respected in the industry and it is two years to exploration.” “We will be looking all the time and
not as if we are getting an asset which you The two-year exploration budget will be there’s a few opportunities around. We
need to turn around to generate money; it focused on upgrading open pit resources now have a footprint on the east coast [of
is actually generating really good cash at at the Golden Plateau, Klondyke and Ros- Australia] and that may be a unique op-
this time.” es Pride deposits, as well as converting portunity to focus on the east coast.”
underground inferred resources. A further Cracow will join Tritton, which has en-
$4 million will be dedicated to regional joyed consistent performance over the
greenfields exploration, with longer term four years the current management team
plans also being put in place. has headed Aeris. The northern NSW
“If you look at its history, this mine mine is forecast to produce 23,500-
never really had more than 3-4 years of 24,500t copper in FY2020 at C1 cash
reserve life,” Labuschagne said. “We see costs of $2.80-2.95/lb.
no reason for that not to continue, with a To support the Cracow transaction,
renewed focus on exploration and conver- Aeris announced it would undertake a
sion of unclassified resources which there $40 million equity raising, including a $7.4
are opportunities for.” million placement and $32.7 million 2.02-
With priorities increasingly laying else- for-1 entitlement offer. It has also secured
where, Evolution was reluctant to dedicate a $30 million acquisition bridge debt facil-
budgets to Cracow but Klein was eager to ity and $15 million guarantee facility from
praise the operational team at the mine. major shareholder, Hong Kong-based
“Cracow embodies so many of the PAG.
great things the Australian mining indus- – Dominic Piper
try offers; an energised, innovative and
engaged workforce,” he said. “They have
done a great job of managing Cracow
Andre Labuschagne

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