AIC Mines (A1M) has come under pressure following a softer June quarter, however, when we stand back and look at the longer-term trends, we remain comfortable with the position in the Emerging Companies Portfolio. Quarterly costs were elevated by higher diesel prices, wet weather and operational disruption, while the earlier introduction of lower-grade Jericho ore diluted the quarterly result.
However, the broader picture remains solid. A1M still delivered FY26 guidance for the third consecutive year, producing 13,064 tonnes of copper and 6,621 ounces of gold at an AISC of A$4.99/lb. That consistency is important for a smaller underground producer, particularly while it is developing Jericho and expanding the Eloise processing plant.
The June quarter produced 3,106 tonnes of copper and 1,706 ounces of gold, with Eloise AISC rising to A$6.15/lb. While clearly softer, the drivers appear largely temporary. Diesel added around A$0.60/lb, rain delayed concentrate drying and sales, and development was briefly affected by high underground temperatures.
Some delayed sales should also be recovered, with A1M ending the quarter holding stockpiled material containing 663 tonnes of copper, worth approximately A$13.7 million at prevailing prices.
Importantly, Eloise generated a record A$63.3 million in net mine cash flow during FY26 after capital investment, while group cash increased to A$41.7 million. This is helping fund the next stage of growth without excessive reliance on new equity.
The Eloise plant expansion remains on schedule, with construction 81% complete and commissioning targeted for the December quarter. Jericho processing trials have also delivered on-spec concentrate at copper grades and recoveries consistent with Eloise, reducing some of the risk around the upcoming ramp-up.
The weaker June quarter created some understandable share-price pressure, but it has not altered our medium-term view. A1M met full-year guidance, generated record mine cash flow and continues to progress the Jericho development and Eloise expansion according to plan.
The next important step is converting that investment into higher production and stronger free cash flow through FY27 and FY28. Execution risk remains, particularly around commissioning and the Jericho ramp-up, but management’s track record gives us confidence.
- We continue to see A1M as one of the more attractive emerging copper producers on the ASX. The near-term quarter was soft, but the medium-term growth picture remains firmly intact.
MM remains long & bullish A1M ~66c
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