AIC Mines has been one of the strongest performers in our Emerging Companies Portfolio over the past 12 months, more than doubling over the period. Despite a recent pullback alongside the copper price, we continue to see the investment case strengthening rather than weakening. Electrification, AI infrastructure and data centre construction remain huge structural demand drivers for copper, though as we often harp on about, there are limited quality ASX-listed copper producers for local investors to gain exposure to this thematic – A1M fits the bill.
What continues to impress us most is the operational execution. The Eloise operation continues to perform strongly, while development of the nearby Jericho deposit and expansion of the Eloise processing plant both remain on schedule and on budget. The processing plant is expected to increase capacity from around 700ktpa to 1.1Mtpa in the December quarter of CY26, while Jericho has already intersected ore ahead of schedule, with first stoping (carving out respective mining tunnels) expected during FY27. As Jericho progressively contributes ore into the expanded Eloise plant, AIC is targeting a lift in group copper production from around 13kt in FY26 to ~20ktpa by FY28, with ongoing exploration success reinforcing confidence that Jericho remains an immature orebody capable of supporting further resource growth.
Looking further ahead, we think the market is still underappreciating the optionality embedded within the asset base. The current expansion is designed around 1.1Mtpa of processing capacity; however, much of the infrastructure has already been sized for a potential expansion to 1.5Mtpa. As additional Jericho mining fronts are brought online and exploration continues to grow the resource, we believe a second-stage expansion becomes increasingly likely. That could ultimately see group copper production increase towards 25ktpa by FY29. Importantly, the current elevated copper price is driving stronger cash flows, improving the funding dynamics of any additional expansion.
The key risk, as with any single-commodity producer, remains the copper price. A prolonged decline would inevitably weigh on near-term cash flow and earnings. However, our investment case has always been driven as much by execution as commodity prices, and on that front A1M continues to deliver. With production set to step materially higher over the next two years, expansion of processing capacity and an increase in total resource estimates, we continue to see AIC Mines as one of the highest-quality emerging copper growth stories in the Australian market and remain comfortable owning the stock in our Emerging Companies Portfolio.
MM remains long and bullish A1M
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