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2 0 2 1 Annual Report

ASX AIS

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Aeris Resources
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Aeris Resources

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Annual Report 2021

FY2021 Highlights	02
Letter from the Executive Chairman	04
Review of Operations	06
Exploration	18
Resources and Reserves	30
Sustainability	46
Sustainability Report 2021	48
Community	53
Directors’ Report	54
Financial Report	80
Shareholder Information	141
Glossary	143
Corporate Directory	144

2 Annual Report 2021

Aeris Resources

Producing

22,987t

copper at Tritton Copper Operations @ AISC of $3.70/lb

73,685oz

gold at Cracow Gold Operations @ AISC of $1,483/oz

Strengthening

Net Profit of $61m (+260% from FY2020)

Net Cashflow from Operating Activities of $170m (+461% from FY2020)

Senior debt reduced by $48 million to $27 million – remaining senior debt repaid on 29 July 2021

Exploring

Discovery of Constellation high grade copper deposit at Tritton in November 2020

Ore Reserve inventory at Cracow maintained and Mineral Resource increased

Growing

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Cracow acquisition completed on 1 July 2020

Mineral Resources updates for the Rose’s Pride and Klondyke-Royal deposits at Cracow

Exploration decline to Budgerygar deposit at Tritton completed and resource drilling program commenced

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Cash balance of $97 million as at 30 June, 2021

Tritton Copper Operations

Copper production for FY2021 was 22,987t of copper @ an AISC of $3.70/lb, within guidance of 22,500-23,500t of copper @ AISC of between $3.60/lb and $3.75/lb;
An exploration decline from the Tritton mine across to the Budgerygar deposit was commenced and completed during the year and a resource drilling program is underway;
In late November 2020, Aeris’ initial drill hole at the Constellation deposit intersected copper sulphides. By the end of FY2021 over 52 Reverse Circulation holes and 24 Diamond drill holes had been completed at Constellation. Drill hole and assay results to date have identified a significant copper mineralised system from four metres below surface and traced

850 metres down plunge and along strike of up to 300 metres, including:

ᵒ Oxide mineralisation from four metres below surface;
ᵒ A significant high grade copper supergene zone from approximately 40 metres below surface, down to 130 metres;
ᵒ Copper sulphide mineralisation below the supergene zone that has been drilled to 850 metres down plunge; and
ᵒ Down-hole Electromagnetic (EM) Surveying identifying two EM plates down to 1,150 metres down plunge (a further 300 metres below the current deepest drilling).

Annual Report 2021

Cracow Gold Operations

Aeris completed the acquisition of Cracow on 1 July 2020;
Cracow is located approximately 500 kilometres north-west of Brisbane, nearby to the towns of Cracow and Theodore;
Gold production for FY2021 was 73,685oz of gold @ an AISC of $1,483/oz, within guidance of 70,00075,000oz @ an AISC of between $1,525/oz and $1,575/oz;
Mineral Resource increases at the Rose’s Pride (+260%) and Klondyke-Royal (+324%) deposits; and
Ore Reserve (gold oz) as at 30 June 2021 was a slight increase (following depletion) on the Ore Reserve at acquisition and Mineral Resource was increased by 30% over the same period.

Corporate – strengthening the Balance Sheet

Aeris raised $50.4 million in June 2021 to accelerate exploration programs at the Tritton Copper Operations and Cracow Gold Operations and for general working capital;

Reduced Senior Debt by $48 million including:
ᵒ The $30 million Tranche C Acquisition Bridging Facility ahead of schedule;
ᵒ Voluntarily repaying the outstanding balance (approximately $14 million) of the Tranche B Facility; and
ᵒ Voluntarily repaying approximately US$4 million off the Tranche A Facility, leaving an outstanding balance of US$20 million.
On 29 July 2021 the Company announced that it had repaid in full the outstanding balance of Tranche A and had closed out the Contingent Instrument Facility, thereby extinguishing all outstanding commitments with SPOV. On the same day Aeris announced that Australia and New Zealand Banking Group Limited (ANZ) had become its senior banker with the provision of a $20 million Working Capital Facility, a $35 million Contingent Instrument Facility and unsecured foreign currency and gold hedging lines; and
Cash balance as at 30 June, 2021 was $97.4 million giving the Company a positive net debt position of ~$71 million.

Aeris Resources

A message from Andre Labuschagne, Executive Chairman

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Dear shareholder,

You may have already heard me say that FY2021 was a truly transformational year for Aeris Resources, and I’m very happy to be saying it yet again!

We started off with the Cracow Gold Operations (Cracow) acquisition which closed on 1 July, 2020, followed up with the exciting discovery of the Constellation deposit at our Tritton Copper Operations (Tritton) in November 2020 and in June this year we raised $50 million in a strongly supported institutional placement. Across the year we also repaid $48 million in debt. FY2022 has also started on a very positive note with Aeris paying down the final $27 million of our senior debt, leaving us debt free after more than 9 years. These major events have helped us to deliver on our previously stated aim of becoming a mid-tier, multi-mine company.

The Cracow acquisition has been a great fit for Aeris. The site team has integrated well into the Aeris culture and led by John Miller, who was previously the General Manager at Tritton, has consistently achieved their production and cost targets and are eager to help us deliver on our strategy of extending the mine life at Cracow. Extending the life of Cracow includes investing significantly into exploration and in the first 12 months of ownership we were able to replenish the Ore Reserve and increase the Mineral Resource by 30%. In FY2022 we will continue accelerating

exploration with $13 million being budgeted. Additionally, we have just completed a new $14 million tailings dam, which shows our confidence in the future of Cracow.

The past year has been equally exciting at Tritton. We have always held the view there was more copper to be found on our tenement package at Tritton and this was validated when the first drill hole (TAKD001) at Anomaly K (now called the Constellation deposit) intersected 19.95 metres of copper sulphide mineralisation grading 2.41% Cu, 0.64g/t Au and 4.6g/t Ag from 197.2 metres. Since that first intersection of copper mineralisation, drilling results at Constellation have exceeded expectations.

We feel that the future for Tritton is bright and in FY2022 we will be moving to underpin that future by committing $50 million on three new ore sources: the Budgery deposit, an extension of the Tritton underground mine; the Avoca Tank underground mine; and a cut-back of the Murrawombie open pit. We are also budgeting to spend $15 million on exploration activities, including drilling programs at the Budgery, Kurrajong and Constellation deposits, as we look to bring them into our life of mine planning. Having had greenfields exploration success with the Constellation deposit, we have added a new exploration lease adjacent to our northern tenements and in the coming year will undertake an aerial Electromagnetic (EM) Survey over 570km[2] of previously unexplored territory.

Our year has not only been celebrated by production and exploration successes. Following the Cracow acquisition,

Annual Report 2021

we saw fit to add to the level of technical expertise in the company and have also strengthened the leadership team with the appointment of Kim Franks, our first Chief People Officer. Kim’s extensive background in human resources and related fields has been invaluable in developing our systems and processes to support our people-focused, growing company.

We have increased our focus in the Sustainability space as well, with our first ever Environmental Social and Governance (ESG) summary forming part of this annual report. We know that a commitment to Sustainability and reporting requires constant focus and a commitment to continuous improvement and look forward to reporting on these improvements in future. This year we have also taken some bold steps into the world of social media, so please look for us on Facebook, Instagram and LinkedIn. We hope to continue to use these media to profile our people, our operational achievements and milestones.

The past year has also been a watershed one on the corporate side. When the current executive team started with Aeris (then Straits Resources) at the beginning of 2013 the Company had debt of almost US$150 million, which was a significant impediment to growing the Company. As mentioned earlier, during FY2021 we repaid almost A$50 million in debt and finished the year with around A$27 million of senior debt remaining. On 29th July, 2021 we repaid the remaining senior debt and are now debt free.

Getting to a debt free position wouldn’t have been possible without the support of our long standing shareholder and financier, PAG, who has given us much appreciated support since late 2015. PAG’s support

over these years has enabled us to have flexibility in making important financial decisions for Aeris and it is this kind of partnership that we are very proud to have had. We have now commenced a relationship with the Australia and New Zealand Banking Group Limited (ANZ) who are now officially on board as our senior banker and have provided us a A$35 million Contingent Instrument Facility and a A$20 million Working Capital Facility. These new facilities from ANZ, combined with our strong cash balances, means Aeris has the financial capacity to continue to invest in growing and extending our businesses.

I’d like to acknowledge our board of directors, my fellow executive leadership team members and all employees for their efforts during the year.

Finally, thank you to our shareholders, long term and new. Everything we do, everyday, is about creating value. We have been very focused on achieving our strategy over the past year, and I can assure you that our successes during the year have made us even more focussed going forward. We continue to look for growth, both organic and external and I truly believe by staying the course, we can create something really special.

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Andre Labuschagne , Executive Chairman

Aeris Resources

Section Review of Break Operations and Activities

Annual Report 2021

Financial Review

Aeris has two operational assets, the Tritton Copper Operations (Tritton) in New South Wales and the Cracow Gold Operations (Cracow) in Queensland. The acquisition of Cracow was completed on 1 July 2020.

Financial Results

The consolidated entity recorded a profit after tax for the financial reporting year to 30 June 2021 of $61.240 million, compared with a loss after tax for the year ended 30 June 2020 of $38.351 million. The results for year were influenced by the inclusion of the Cracow Gold Operations from acquisition date on 1 July 2020, and other key factors which include:

Revenue from contracts with customers was $431.290 million, compared to $227.313 million for the previous corresponding period. This reflects the following two factors:
ᵒ Revenue from the Tritton Copper Operations was favourably impacted by higher copper prices received (A$10,413/t including the impact of hedging) compared to the prior corresponding period (A$8,300/t). These higher copper prices were offset by lower copper production of 22,987 tonnes compared to 25,041 for the prior corresponding period ; and
ᵒ The recognition of $186.681 million in revenue from the Cracow Gold Operations, resulting from production of 73,685 ounces of gold and a gold price received of A$2,508 per ounce including the impact of hedging.
Cost of goods sold increased to $337.895 million from $217.303 million for the previous corresponding period, with costs at both operations being in line with plan;
Foreign exchange impacts, mainly on foreign exchange movements on interest bearing liabilities and US dollar denominated receivables resulted in a gain of $1.166 million for the year ended 30 June 2021 (a loss of $3.027 million for the year ended 30 June 2020). The AUD/USD exchange rate at 30 June 2021 was $0.7518 compared to $0.6848 at 30 June 2020;
Transaction costs of $4.068 million were recognised for the year ended 30 June 2021 in relation to the acquisition of the Cracow Gold Operations (30 June 2020: $3.126 million);
A loss of $2.238 million was recognised in relation to the sale of the Yandan Gold Exploration Project and the associated subsidiary; and
A loss of $0.444 million was recognised for the year ended 30 June 2021 (30 June 2020: $1.191 million) in a movement in the fair value of the investment in Australian listed equity, held at fair value through the profit or loss.

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Profit/(loss) 30 June 2021 ($M) 30 June 2020 ($M)
Revenue from contracts with customers 431.3 227.3
Gross profit 93.4 10.0
(Loss)/ profit from continuing operations 61.2 (38.4)
(Loss)/ profit for the year 61.2 (38.4)
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Aeris Resources

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Financial Position

At 30 June 2021, the consolidated entity had a positive net asset position of $183.864 million (30 June 2020: $73.649 million).

The 30 June 2021 net asset position for the consolidated entity was impacted by a number of key factors, including:

The acquisition of the Cracow Gold Operations. Please refer to note 31 of the financial statements for additional information regarding the impact of this acquisition on the financial position of the consolidated entity;
The successful completion in June 2021 of a $50.4 million equity raising by way of an Institutional Placement;
During the year ended 30 June 2021, the following repayments were made on the debt facilities provided by Special Portfolio Opportunity IV (SPOV) (a subsidiary of a fund managed by PAG):
ᵒ US$3.5 million in early repayments on the Tranche A (Working Capital) Facility. There was US$20.25 million outstanding on this facility as at 30 June 2021. Please refer to page 63 for additional details regarding the repayment of the remaining balance of this facility in July 2021;
ᵒ US$11 million in repayments on the Tranche B (Term Loan) Facility. This facility was fully repaid at 30 June 2021; and
ᵒ Full repayment by 30 June 2021 of the A$30 million Tranche C (Acquisition Bridging) Facility which was provided by SPOV to assist funding the acquisition of Cracow.

The consolidated entity’s net cash inflow from operating activities during the financial year was $169.650 million, with net cash outflows from investing activities of $153.426 million and net cash inflows from financing activities of $27.004 million.

Significant Changes in the State of Affairs

Acquisition of Cracow Gold Operations (Cracow)

Aeris acquired Cracow from Evolution Mining Limited (Evolution) effective 1 July 2020.

The Cracow Transaction Consideration consisted of:

$60 million cash payable on completion;
Deferred cash payment of A$15 million due on 30 June 2022; and
10% net value royalty from 1 July 2022 to 30 June 2027, capped at A$50 million.

The A$60 million cash payment on completion was funded through:

Fully underwritten A$40 million equity raising (Equity Raise); and
A$30 million acquisition bridge debt facility (Tranche C) with Special Portfolio Opportunity V Limited (SPOV), a subsidiary of a fund managed by PAG.

Annual Report 2021

Extension of debt and contingent instrument facilities as a result of acquisition of Cracow

In conjunction with the acquisition of Cracow, SPOV agreed to restructure and extend the term of its senior debt facilities and the contingent instrument facility to reflect the enlarged consolidated entity’s improved credit profile as well as ensure Aeris has flexibility to pursue its planned exploration and growth capital programs for both Cracow and Tritton. Specifically:

The terms of both the existing Tranche A and Tranche B secured facilities were extended from 1 July 2021 to 1 July 2023;
Tranche B (US$11 million) amortisation was deferred to start on 1 July 2021 at US$2.5 million per quarter until repaid;
Tranche A (US$22 million) amortisation to commence once Tranche B is repaid, with amortisation of US$2.5 million per quarter and a bullet payment of the balance at the end of the term;
Tranche C (A$30 million) to be repaid in quarterly instalments of A$7.5 million, commencing 1 October 2020; and
The contingent instrument facility was increased to A$15 million for the replacement of financial assurances relating to Cracow.

Repayment of Debt

Aeris made all repayments (A$7.5 million each) on the A$30 million Tranche C (Acquisition Bridging) Facility ahead of schedule, fully repaying the facility before 30 June 2021.

Voluntary repayments made during the financial year fully settled Aeris’ debt obligations on the Tranche B (Term Loan) Facility and reduced the Tranche A (Working Capital) Facility to US$20.25 million (A$26.9 million) as at 30 June 2021.

In June 2021, Aeris agreed with its financier, Special Opportunity V Limited (SPOV) (a subsidiary of a fund managed by PAG), to a re-profiling of repayment commitments for financial year 2022 (FY2022):

Cash backing of the Contingent Instrument Facility for environmental bonding obligations, which has an outstanding balance of A$10 million, to be accelerated and fully extinguished by early Q4 in FY2022, approximately 14 months ahead of the original schedule; and
Debt repayments on Tranche A in FY2022 reduced from US$10 million (US$2.5 million per quarter) to a total of A$2 million, which will be paid at the end of Q4 FY2022. The debt repayment profile for Tranche A in FY2023 remains unchanged.

Please refer to significant events after the balance date in the following section for additional information regarding the consolidated entity’s debt facilities.

Gold and Copper Hedging

Aeris entered into unsecured gold and copper hedging arrangements with Macquarie Bank Limited early in the financial year ended 30 June 2021 and undertook further copper hedging in February 2021.

Gold hedging

36,000 ounces (3,000 ounces per month from July 2020 to June 2021), at A$2,536.25/oz.

Copper hedging

Two tranches of copper hedging were undertaken:

The first tranche was for 9,000 tonnes (1,500 tonnes per month from August 2020 to January 2021) at A$9,096.80/t;
The second tranche was for 5,000 tonnes (833 tonnes per month from February 2021 to July 2021) at A$9,228/t; and
In February 2021, the Company entered into further hedges for 4,000 tonnes (677 tonnes per month from February 2021 to July 2021) through a Zero Net Premium Option Collar, where Aeris buys puts and sells call options to form a collar structure with zero premium payable:
ᵒ The strike price of the put options is A$10,000/t; and
ᵒ The strike price of the call options is A$11,100/t.

Revenue for the year ended 30 June 2021 is presented net of realised hedging losses of $18.2 million (2020: $nil).

Aeris Resources

Equity placement

On 11 June 2021, Aeris successfully completed a $50.4 million equity raising by way of Institutional Placement. The Placement was conducted at $0.175 per share to various new and existing institutional and sophisticated investors. The proceeds of the Placement will be used for accelerating exploration activities at Tritton and Cracow; transaction costs associated with the placement; and general working capital.

The new shares rank equally in all respects with Aeris’ existing shares. As the Placement was conducted in accordance with the Company’s placement capacity under Listing Rule 7.1, shareholder approval for the issue of the new shares was not required. The shares were

fully settled and issued on 18 June 2021, bringing the total shares on issue at 30 June 2021 to 2,207,352,758.

Sale of Yandan Gold Exploration Project

On 13 January 2021, the Company sold the Yandan Gold Exploration Project (Yandan) and an associated subsidiary to GBM Resources Limited (GBM). As consideration for the sale of Yandan, the Company received $3 million in GBM shares (at $0.135 per share) and a 1.5% Net Smelter Royalty on the first 300,000 ounces of gold equivalent mined from the Yandan tenements. The Company also subscribed for a placement of $1 million of shares in GBM at $0.135 per share. The Company holds 29.6 million shares in GBM, a shareholding of 6.85%, as at 30 June 2021.

SIGNIFICANT EVENTS AFTER THE BALANCE DATE

On 13 July 2021, the Company entered into further unsecured A$ copper hedges with Macquarie Bank Limited. The hedges are through a Zero net Premium Option Collar where Aeris buys puts and sells call options to form a collar structure with zero premium payable. The strike price of the put options is A$11,900/t and the strike price of the call options is A$12,900/t.

The hedges cover the period August 2021 to June 2022 in scheduled monthly deliveries of 550 tonnes (6,050 tonnes in total).

On 29 July 2021, the Company advised that it had repaid the outstanding balance (US$20.25 million) of its Tranche A (Working Capital) Facility with Special Portfolio Opportunity V Limited (SPOV) (a subsidiary of a fund managed by PAG). The Company also announced that it had entered into arrangements for Australia and New Zealand Banking Group Limited (ANZ) to become the Company's senior banker. ANZ has provided the Company with a A$35 million Contingent Instrument Facility, a A$20 million Working Capital Facility, and unsecured hedging lines for gold and foreign currency.

Other events

No other matter or circumstance has arisen in the interval between the end of the financial year and the dates of this report that has significantly affected or may significantly affect the operations of the consolidate results of those operations; or the state of affairs of the consolidated entity in subsequent financial years.

COVID-19 Impact

Since early 2020, the COVID-19 pandemic has disrupted conventional working arrangements globally and created unique risks and challenges across a variety of industries. Fortunately, the impact of COVID-19 on Aeris’ operations has been modest in comparison to businesses in industries that have been more directly impacted.

In response to the pandemic, the consolidated entity implemented a COVID-19 Management Plan, which it continues to review, update and communicate as additional information becomes available. Current measures undertaken by the consolidated entity include limiting access to operational sites to essential personnel only, limiting employee travel, adjusting work arrangements for site and corporate teams and increased communication to our workforce and partners.

Annual Report 2021

FY2022 LIKELY DEVELOPMENTS AND EXPECTED RESULTS

Tritton Copper Operations

The copper production guidance at the Tritton Copper Operations is between 21,000 tonnes and 22,000 tonnes at an AISC of between A$3.95/lb and A$4.30/lb for the financial year ending 30 June 2022;
Development to commence in FY2022 of 3 new production sources:
ᵒ Budgerygar deposit – an extension of the Tritton underground mine;
ᵒ Avoca Tank underground mine; and
FY2022 $15 million exploration program including:
ᵒ In-fill resource drilling programs at the high grade Constellation and Kurrajong deposits;
ᵒ In-fill drilling program at the Budgery deposit, targeting a maiden Ore Reserve;
ᵒ 570km[2] aerial EM program in the northern section of the tenement package; and
ᵒ First pass drilling of multiple anomalies.
ᵒ Murrawombie Pit cut-back.

TRITTON ANNUAL COPPER PRODUCTION (TONNES)

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35,000
30,000
30,425
25,000 26,686 26,852 25,041 22,987
20,000 23,404 22,000 23,500
21,000 22,500
15,000
10,000
5,000
0
FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23
Forecast Forecast
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Cracow Gold Operations

Gold production guidance for the year ending 30 June 2022 at Cracow Gold Operations is between 67,000 and 71,000 ounces at an AISC of between A$1,550/oz and A$1,600/oz;
$13 million FY2022 exploration program, including:
ᵒ Resource definition drilling programs targeting:
ᵒ Extensions to the Rose’s Pride, KlondykeRoyal and Golden Plateau deposits; and
ᵒ Near-mine underground conceptual targets including Killarney Extensions, Kenneth and Royal / Crown Deeps.

CRACOW ANNUAL

GOLD OPERATIONS (OUNCES)

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100,000
90,000
80,000
70,000 73,685
71,000
65,000
60,000 67,000
60,000
50,000
0
FY21 FY22 FY23
Forecast Forecast
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ᵒ Greenfields exploration in new spaces looking for the next significant deposit, including Cracow South West, Ballymore and Boughyard.

Aeris Resources

Tritton Copper Operations

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Units FY21 FY20 FY19 FY18
Mined Tonnes 1,573,679 1,610,504 1,673,066 1,615,855
Grade Cu (%) 1.56% 1.63% 1.67% 1.76%
Ore milled Tonnes 1,557,803 1,640,680 1,669,274 1,592,165
Grade milled Cu (%) 1.56% 1.63% 1.69% 1.75%
Recovery Cu (%) 93.72% 93.49% 94.73% 95.23%
Copper concentrate produced DMT 111,905 121,398 118,576 118,366
Copper concentrate grade Cu (%) 20.37% 20.60% 22.60% 22.45%
Contained copper in concentrate Tonnes 22,798 25,004 26,795 26,576
Copper cement produced Tonnes 188 37 57 110
Total copper produced Tonnes 22,987 25,041 26,852 26,686
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Tritton Copper Operations

During the year ended 30 June 2021 the Tritton Copper Operations, produced 22,987 tonnes of copper. Production was consistent with guidance.

Ore processed during the period was 1,557,803 tonnes. Copper recovery for the period was 94%.

Two mines were operational in the year; the Tritton and Murrawombie underground mines. The Tritton underground mine supplied the majority of the ore (1.04 million tonnes) to the processing plant. The Murrawombie underground mine produced the higher grade ore that fills the remaining ore milled.

Development of the access decline at the Tritton underground mine was restarted mid year to extend the mine deeper from 4110mRL to 4030mRL. A new stoping block will be developed to mine the Tritton deposit in this region. The new stoping block will extend mine production into FY2023.

Murrawombie mine decline development was paused at the base of the known resource to allow a program of diamond drilling to explore for deposit extensions. Production rates

from Murrawombie were above budget at 530,000 tonnes at an excellent grade of 1.9% copper. The best grade stopes in the developed part of the mine have now been extracted. The production sequence has now moved to mining the lower grade ore lenses. Exploration diamond drilling from the base of the decline has identified some new and higher-grade lenses to the north and in the hanging wall position. Mine design and schedules are being reviewed with an objective to bring these higher grade sources into production with priority to help offset the lower grade from other areas of the mine.

Murrawombie Underground Mine

Murrawombie underground mine production achieved a head grade of 1.8% copper. Stope extraction sequences are arranged to mine the highest grade stopes first. The best grade stopes in the fully developed section of the mine have now been exhausted, with mined grade scheduled to decline in FY2022. Exploration drilling has identified new lenses of mineralisation to the north and in a hanging wall position. Areas of higher grade ore are being identified in these areas. Mine design and schedules are being modified to target these areas for extraction as soon as possible to mitigate the head grade decline.

Annual Report 2021

Tritton Underground Mine (Tritton)

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Tritton Mine Long Section View
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Murrawombie Mine Long Section View
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Aeris Resources

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Budgerygar Underground Mine Project – Conceptual Design

Mining Project - Budgerygar Underground

An exploration and deposit access drive was developed from the Tritton decline towards the Budgerygar deposit during FY2022. A resource definition diamond drilling program has commenced to upgrade the quality of the Mineral Resource and to enable mine planning and scheduling to commence. Mining is due to commence from the Budgerygar deposit in late FY2022. Ore from the Budgerygar section of the Tritton mine complex will supplement mine production, replacing the declining production coming from the deeper parts of the Tritton deposit. Production from Budgerygar is scheduled to ramp up from FY2023.

Mining Project – Murrawombie Open Pit

The expansion of the old Murrawombie Open Pit, which entails a small push back of the eastern wall to increase the pit depth, will allow Aeris to mine an estimated additional 1.6 million tonnes of ore.

The pit expansion project has secured Local and State Government approvals and, from a regulatory perspective, can proceed at any time.

Production from the Murrawombie open pit has historically been scheduled to start after the completion of the Murrawombie underground to avoid complex operational interactions. Likely extensions of the underground life are now encouraging a “production in parallel” strategy. This strategy will require development of a section of by-pass decline to avoid the pit push back and relocation of ventilation infrastructure. It is now expected that mining of the Murrawombie open pit will commence in FY2022. The detailed schedule interaction with the underground requires more review and is partly dependent on the results of underground exploration drilling.

Waste mined from the pit expansion will be used for site rehabilitation and closure works. Use of the pit waste as capping for the adjacent heap leach pads substantially reduces the closure cost for the Murrawombie mine site.

Annual Report 2021

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Avoca Tank Underground Mine Project – Conceptual Design

Mining Project – Avoca Tank Underground

Avoca Tank is a small, high-grade deposit located five kilometres to the north of the Murrawombie mine site. The current planned life of mine for Avoca Tank is approximately four years, including construction, however there is a realistic expectation that exploration drilling may increase the size and life of the deposit. Avoca Tank has multiple lenses of mixed chalcopyrite and pyrite mineralisation, and it is likely that the complex structural character has contributed to its high grades. The deposit is unusual for the region due to its vertical dip, and it has an uncharacteristically high gold content at 0.8g/t.

Applications for a Mining Lease and the associated permits to operate have been prepared. The permitting process has taken longer than anticipated for this mining project and has resulted in delay to the start of development.

As a small scale, high-grade mine Avoca Tank is planned to be mined as a supplementary ore source to top-up production from the larger Tritton and Murrawombie mines. Planned production rates are modest at 350,000 tonne per year, consistent with the size of the deposit. The high grade of the ore will be an important sweetener of the processing plant head grade.

The pre-feasibility study that describes the project was completed in 2014. Execution planning and additional studies have been completed to better define the project. A major change compared to the pre-feasibility study was the decision to access the deposit via a two-kilometre-long tunnel from the Hartmans pit, rather than develop a new box cut pit and portal. The reduction in environmental impact due to the design change was significant. However, the change in plan has contributed to permitting delays.

Capital development work on Avoca Tank project will commence in FY2022.

Aeris Resources

Mining Project – Budgery Deposit Open Pit

The Budgery deposit is approximately 20 kilometres south of the Tritton ore processing plant, close to the township of Hermidale. It is located within the same geological setting as the Tritton and Murrawombie deposits and displays similar characteristics.

body requiring additional technical work. One option for the treatment of the oxide ore is by heap-leaching, a process with which Tritton Copper Operations is very familiar. The sulphide ore will be treated through the Tritton ore processing plant.

Significant exploration drilling has been conducted to support a concept study for an open-pit project, however additional resource drilling, metallurgy studies, environmental studies and native title claim group agreement are required before a pre-feasibility study can be completed.

The proposed open-pit would mine a combination of oxide and sulphide ore types with the treatment method for the near-surface oxide portion of the ore

The Budgery mineralised system is significant and known to continue at depth. There has been limited drilling completed at depth, and this presents an opportunity to increase the Mineral Resource downdip from the current reported Mineral Resource, which extends some 250 metres vertically. Options for selective underground mining of possible deposit extensions will be tested as drilling information becomes available.

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Annual Report 2021

Cracow Gold Operations (Cracow)

Cracow produced 73,685 ounces of gold during the financial year ended 30 June 2021 achieving guidance of between 70,000 ounces and 75,000 ounces.

Cracow ore processing plant achieved annual 603,000 tonnes - (exceeding the previous assumed limit of 570,000 tonnes per annum) and monthly (57,100 tonnes) throughput records in FY2021. These records were achieved with minor capital expenditure on debottlenecking of the processing plant, particularly in the crushing circuit. The proved higher processing capacity is a factor in extending the life of Cracow as it enables lower gold cut-off grades to be contemplated.

Mining activities during the financial year were focused on improving development and backfilling rates, testing the limits of mining capacity.

A new long-term plan is being developed. It is expected that grade variation will occur from time to time as extending mine life is balanced against short run high production grades. Previously, the strategy for the mine had been to optimise the mine plan to maximise near-term gold grades. Aeris’ strategy since acquiring Cracow has been to find the economic balance on gold grade versus mine life extension, through maximising extraction of the Resource.

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Feed to the processing plant that exceeds mine production comes from the significant stockpiles of low-grade material located around the site. Low grade stockpiles were accumulated from historical open pit mining and grades in this material are variable due to a lack of good historical records.

Tailings Dam Project

During the year construction of a new multi-stage tailings storage facility at Cracow (TSF No.2) commenced. Cracow is currently discharging tailings into Tailing Storage Facility No.1 (TSF No.1), which has reached its maximum allowable construction height.

Civil construction activities commenced late in December 2020. As at 30 June 2021 the construction was substantially complete and commissioning is targeted to occur in early August.

Establishing a multi-stage tailings storage facility with a capacity greater than 5 years supports our investment thesis that Resource development at the Cracow mine and exploration of the tenement package will extend mine life.

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Units FY21
Mined Tonnes 541,910
Grade g/t 4.49
Ore milled Tonnes 602,789
Grade milled g/t 4.12
Recovery (%) 92.30%
Gold produced Oz 73,685
Total Gold Sold / Shipped Oz 73,692
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Aeris Resources

Exploration

Aeris Resources’ FY2021 exploration strategy was focused on greenfields and brownfields exploration at its wholly owned Tritton Copper Operations (Tritton) in New South Wales and Cracow Gold Operations (Cracow) in Queensland.

Annual Report 2021

Tritton Copper Operations (Aeris 100%)

Exploration activities undertaken at Tritton during FY2021 included:

Follow-up drilling of EM anomalies, resulting in the discovery of the Constellation deposit;
Implementation and commencement of a regional geochemical sampling program;
Resource extension drilling at the Murrawombie mine; and
Continued exploration / resource definition drilling within the Tritton to Budgerygar corridor.

The Tritton tenement package in New South Wales comprises seven exploration and three mining licences covering 2,160km[2] of highly prospective ground for base metal deposits within the Girilambone Basin.

Since modern exploration commenced in the 1980s, more than 750,000 tonnes of copper has been discovered within the 100% Aeris-owned Tritton tenement package. Mineralisation discovered within the Tritton tenement package to date is proximal to the Budgery sandstone unit. A 50 kilometre section of the Budgery Sandstone corridor has been explored. From geological mapping and geophysical interpretation, the Budgery Sandstone corridor is interpreted to extend a further 100 kilometres through the under-explored northern half of the tenement package.

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Tritton Tenement Map
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Aeris Resources
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Aeris’ exploration strategy within the Tritton tenement package is based on a combination of extending mineralisation at the current Mineral Resource deposits and advanced projects and greenfields exploration for new deposits.

Greenfield exploration is focused on exploring in new areas and previously under-explored terrain, using new and different technology with the primary focus continuing to be on the under-explored northern half of the tenement package. The recent greenfield discovery of the Constellation deposit highlights the potential for further massive sulphide discoveries in this part of the tenement package. The principal form of exploration has been via airborne and ground-based survey techniques with the EM technology designed to detect for massive sulphide conductive bodies to 500 metres below surface. A regional surface geochemistry sampling program will also be undertaken across the tenement package, looking for geochemistry signatures associated with non-conductive mineralised systems not detectable via EM methods.

Exploration activities conducted in FY2021 included:

An initial reconnaissance drill testing at the Constellation deposit, confirming the EM anomalies identified are associated with copper sulphides – the first drill hole in November in 2021 intersected copper sulphide mineralisation;
Commencing a significant drill program at the Constellation deposit with 52 reverse circulation drilling (RC) and 27 diamond drill holes completed by the end of FY2021;
A surface auger program being completed over known mineral systems to identify and characterise geochemical signatures. This work forms part of the regional exploration vectoring approach;
Underground drilling at the Murrawombie deposit, extending the limits of the known mineralised envelopes. An additional two copper sulphide lodes were discovered within the hangingwall;
Within the Tritton – Budgerygar corridor, underground resource definition drilling was commenced at the Budgerygar deposit. At the South Wing deposit four drill holes were completed intersecting the copper sulphide lode outside the current Inferred Mineral Resource; and
An application submitted to the NSW Resources Regulator for a new exploration tenement adjacent to tenements in the underexplored northern section of the tenement package.

Annual Report 2021

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Constellation Schematic Cross Section

Constellation Deposit

The Constellation deposit is located 45 kilometres northeast of the Tritton processing plant in the north-eastern corner of the Tritton tenement package. The deposit was discovered from an airborne EM (electromagnetic) survey and follow-up ground based moving loop (MLTEM) surveying. Results from the EM surveying defined two conductive bodies, some 400 metres apart. The larger, approximately 250 metres by 250 metres, eastern body was defined as a gentle south-east dipping plate of moderate conductance (100-200S ). The smaller, approximate 30 metres by 30 metres, western EM plate was modelled as a north-south trending sub vertical plate with a moderate strong conductance (1500-2000S).

In November 2020, an initial reconnaissance drill program commenced, designed to test each of the two modelled EM plates. The first diamond drill hole, TAKD001 intersected copper sulphides, from 197.2 metres down hole, within the

larger western EM plate. The sulphide interval reported 19.95 metres @ 2.41% Cu, 0.64g/t Au and 4.6g/t Ag. The second diamond drill hole, TAKD002, tested the smaller western EM plate. The drill hole intersected supergene copper mineralisation from 61.05 mertres downhole. The mineralised interval reported 3.55m @ 22.56% Cu, 2.57g/t Au and 16.1g/t Ag.

Drilling has continued unabated at Constellation with two diamond rigs operating, and will continue throughout most of the 2021 calendar year. A RC drill rig commenced in April 2021 and is expected to continue to September 2021. This RC drill campaign at the Constellation deposit was designed to test the extents of shallow oxide and supergene copper mineralisation first identified from diamond drill hole TAKD002.

Aeris Resources

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Constellation Diamond Drill Hole Coverage

The RC drill program has been conducted over a nominal 20 metres by 20 metres spacing to 130 metres below surface and to date has delineated an extensive near surface oxide and supergene copper horizon, which remains open to the south and west. The lateral extent of copper mineralisation (approximately 200 metres by 200 metres) and high grade copper tenor reported to date has exceeded expectations. During the program, 18 RC drill holes intersected water in or near mineralisation and had to be abandoned. After completion of the first phase of the RC drill program, each abandoned RC hole has been extended by diamond drilling, referred to as a diamond tail. Significant assay results from the RC +- diamond tail include:

TAKRC004 61.6m @ 5.12% Cu, 0.80g/t Au, 4.7g/t Ag (from 44m);
TAKRC024 38.0m @ 3.72% Cu, 0.36g/t Au, 3.1g/t Ag (from 8m);
TAKRC025 47.0m @ 3.90% Cu, 0.96g/t Au, 5.6g/t Ag (from 11m);
TAKRC0031 12.5m @ 11.14% Cu (from 45m);

Diamond drilling has focused on testing the primary copper sulphide mineralisation beneath the copper oxide and supergene copper domains. The diamond drill holes have traced mineralisation 850 metres down plunge and 300 metres along strike. Mineralisation remains open along strike (south) and down plunge. Down hole electromagnetic (DHEM) surveying identified two large (75 metres by 150 metres) moderate to strong conductance (1,500S to 2,000S) EM plates extending 300 metres down plunge from the deepest drill hole to date (TAKD015 – intersected an approximate 18 metres thick sulphide package). Both conductors are orientated parallel with the modelled mineralised system.

Significant assay results from the diamond drill program include:

TAKD001 19.95m @ 2.41% Cu, 0.64g/t Au and 4.6g/t Ag (from 197.2m);
TAKD019 48.7m @ 2.56% Cu, 1.21g/t Au, 6.2g/t Ag (from 140.3m);
TAKD014 20.3m @ 2.02% Cu, 0.49g/t Au, 4.7g/t Ag (from 475m); and
TAKRC030 11m @ 4.63% Cu, 0.79g/t Au, 7.6g/t Ag (from 61m); and
TAKD017 16.7m @ 1.85% Cu, 0.61g/t Au, 4.0g/t Ag (from 311m).
TAKRC005 23.7m @ 2.93% Cu, 0.87g/t Au, 5.5g/t Ag (from 113.3m).

Annual Report 2021

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Budgerygar Long Section

Surface auger geochemistry sampling program

A hydraulic auger geochemical sampling campaign was initiated in FY2021. The auger program collects samples for geochemical testing. Samples are collected from several metres below surface via a 4-wheeldrive mounted auger rig. Assay results from the auger samples will be used to identify geochemical signatures over our known deposits and then look regionally for similar geochemical responses. Auger sampling programs have been completed over the Tritton, Budgerygar and Constellation deposits, with a systematic sampling campaign planned to target areas throughout the entire Tritton tenement package. Geochemical results from the sample program will be used to identify areas for further exploration work.

access drive has been completed to facilitate resource definition drilling, which commenced in the second half of FY2021. Two diamond drill rigs are dedicated to the drill program and are currently targeting the upper portion of the deposit between 5,200mRL to 5,000mRL. The drilling data supports the current geological interpretation of multiple stacked copper sulphide bodies. There is some additional faulting and dislocation of the mineralised systems, which is typical for these deposit types as the drill density increases. Significant assay results returned include:

BDEL006 – 2.15m @ 4.16% Cu (2.15m true thickness);
BDEL011 – 8.00m @ 2.28% Cu (6.0m true thickness);
BDEL011 – 4.40m @ 5.30% Cu (4.1m true thickness);
BDEL012 – 10.9m @ 1.97% Cu (5.5m true thickness); and

Tritton - Budgerygar Corridor

BDEL014 – 3.9m @ 4.58% Cu (3.1m true thickness).

The Tritton to Budgerygar corridor represents a copper rich area spanning approximately one kilometre in strike length. The Tritton deposit represents the largest mineralised system discovered to date within the tenement package, with current exploration activities tracing mineralisation two kilometres down plunge. The Budgerygar deposit located 600 metres further north is an emerging deposit with little work completed over the past 20 years. The Budgerygar deposit is defined by four discrete lodes which cover a footprint of 250 metres (strike) by 800 metres (down plunge). An exploration

The South Wing mineralised system is located immediately along strike (south) from the Tritton deposit. South Wing appears to be spatially located in the hanging wall (HW) of the main Tritton deposit. A modest drill program targeting mineralisation directly below the current Inferred Mineral Resource was completed in the FY2022. Drilling intersected the copper sulphide system outside of the current Inferred Mineral Resource. Resource definition drilling is planned to convert Inferred to Indicated Mineral Resource.

Aeris Resources

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Murrawombie Long Section

Murrawombie Deposit

Avoca Tank

At the Murrawombie deposit, underground drilling continued throughout the year with a focus on extending the mineralised footprint further along strike and down plunge.

A total of 75 drill holes were completed during FY2021, with a majority intersecting sulphide mineralisation. Drilling through the main mineralised bodies (lode 102 and 108) defined the limits of each lode. Drilling through the hangingwall (HW) lodes continued to intersect copper sulphides of variable quantities. A further two copper sulphide lodes (112 and 114) were discovered. The largest lode, 115, was extended a further 75 metres down plunge and 100 metres along strike.

The deposits discovered on the Tritton tenement package typically have a long down plunge extent and the same is expected to be true at the Avoca Tank deposit. Future exploration drilling of the deposit will be most efficient from an underground platform.

However, to assist with feasibility studies, a small drilling program of up to three drill holes to test the vertical extension of the deposit is planned in FY2022. This program aims to help to improve the understanding of the deposit’s structural controls to optimise future underground drilling locations.

Annual Report 2021

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Kurrajong Long Section

Kurrajong Deposit

The Kurrajong deposit is located approximately 20 kilometres east north-east from the Tritton processing plant. Previous drilling activities at Kurrajong intersected a copper sulphide mineralised system that has been traced 1,100 metres down plunge and remains open below this point. Additionally, sulphide mineralisation, albeit at lower copper grades (≤0.5% Cu), continues along strike to the north indicating there is potential for further higher-grade copper systems to develop.

Clustering of deposits is common in other areas within the Tritton tenement package, with multiple deposits occurring within several kilometres of each other.

An Exploration Target for the Kurrajong deposit, ranging between 2 to 4 million tonnes at a copper grade of between 1.5% to 2.0% has been defined. The potential quantity and grade of the Exploration Target is conceptual in nature and is therefore an approximation.

There has been insufficient exploration drilling to estimate a Mineral Resource and it is uncertain if further exploration will result in the estimation of a Mineral Resource.

A resource definition drill program is planned at Kurrajong in FY2022, focused on defining a maiden Mineral Resource at the upper levels of the known mineralised system.

Aeris Resources

Canbelego JV (Aeris 30%)

Aeris Resources Limited, through its subsidiary company Tritton Resources Pty Ltd, holds a 30% interest in the Canbelego Project (EL 6105), a joint venture (JV) with Oxley Resources (70% interest), a subsidiary company of Helix Resources (ASX:HLX). Exploration activities and management of the Exploration Licence are completed by Helix Resources, our joint venture partner.

Within the exploration licence, the most advanced of several projects is the Canbelego deposit. Copper mineralisation at Canbelego occurs from surface to approximately 300 metres below surface. Copper mineralisation within the primary sulphide horizon is associated with chalcopyrite, forming a range of sulphide textures including disseminations, stringers, veins and semi to massive accumulations. The mineralised system remains open along strike (north and south) and down plunge. There has been some drilling completed previously, the most recent in 2012.

Exploration activities recommenced during the FY2021 year with an airborne electromagnetic survey flown over the entire tenement package. Several high priority anomalies were identified and flagged for follow-up exploration. At the Canbelego deposit a five-hole diamond drill program (CANDD001 to CANDD005) was completed. DHEM surveying was completed on the first three drill holes. All five drill holes intersected copper sulphides, with several drill holes intersecting multiple mineralised lenses. The drill holes targeted interpreted high grade copper shoots based on previous drilling and re-modelled historical DHEM plates. Significant assay results include:

CANDD001 – 2m @ 3.07% Cu; and
CANDD002 – 14m @ 4.22% Cu.

The completed DHEM surveys identified multiple moderate to strong off-hole conductors. The orientation and dimensions of the modelled EM plates are supportive of copper mineralisation extending up and down dip from the current drilling footprint.

Cracow Gold Operations (Aeris 100%)

The Cracow Gold Operations is located some 500 kilometres north-west of Brisbane on the traditional lands of the Wulli Wulli people. There is a small community in the township of Cracow, with the nearest substantial town, Theodore, located approximately 50 kilometres to the north. Aeris holds a significant tenement package over the Cracow goldfields, including three exploration and 18 mining licences.

Following the discovery of gold in the area, dating back to the 1930s, greater than two million ounces of gold has been mined from the Cracow goldfields. Initial mining activities focused on the Golden Plateau lineament with approximately 850,000 ounces produced from open pit and underground methods to the mid-1990s. From 2003 onwards, underground mining has taken place along three dominant mineralised structures over a 3 by 1.5 kilometre footprint. The mineralised province is termed the Western Field.

Aeris’ exploration strategy within the Cracow tenement package is focused on the discovery of low sulphidation epithermal type gold mineralisation via extensions to known deposits or the discovery of new deposits. Key parameters required to form an ore shoot include an appropriate structural and lithological setting in close proximity to a heat source.

Greenfield exploration is focused on moving the search space into new or under-explored terrain. Following the completion of a prospectivity review across the Cracow tenement package, the priority search space was identified along strike (south) of the current Western Field underground workings. The prospective target areas are concealed beneath unmineralised cover sequences.

Exploration programs undertaken during FY2021 included:

Resource definition drill programs at the Roses Pride and Klondyke – Royal deposits leading to updated Mineral Resource estimates;
Completion of a 50km[2] drone magnetic survey over the prospective Boughyard high sulphidation exploration target;
Completion of regional and near mine prospectivity review; and
Reconnaissance exploration drill programs testing conceptual targets at Roses Pride Deeps and Crown Deeps.

Annual Report 2021

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Cracow Priority Exploration Targets

Aeris Resources

Surface RC drill programs

Crown and Royal Deeps

Surface RC drill programs were completed at the Roses Pride and Klondyke – Royal deposits. Both drill programs were designed to test extensions to known mineralisation and upgrade the Mineral Resource estimates.

Roses Pride Deeps surface drilling

The Roses Pride high grade deposit represents the northern most ore deposit mined at Cracow since modern mining commenced in 2004. Underground activities at Roses Pride accessed and mined the deposit to 200 metres below surface. Intermittent surface drill programs have been completed in the past, seeking to define up-plunge, near surface extensions to the Roses Pride mineralised system.

Prior drilling had been successful in intersecting the mineralised structure above and along strike from underground workings. An RC drill program, totalling 48 RC holes, was completed, testing mineralisation up to 400 metres along strike (north) from mine development. Significant drill hole assay results included:

RPS003 19.0m @ 5.45g/t Au (true thickness 10.1m);
RPS025 15.0m @ 4.10g/t Au (true thickness 6.1m);
RPS050 5.0m @ 5.33g/t Au (true thickness 3.3m); and
RPS054 10.0m @ 5.13g/t Au (true thickness 4.7m).

The drill program led to an updated Mineral Resource estimate, resulting in a 260% increase in contained gold.

Gold mineralisation at the Western Field is constrained along certain fault structures that cut through several specific stratigraphic units. Little exploration has been completed along the fault structures below the favourable horizon on the understanding that the stratigraphy is not amenable for gold mineralisation to develop, however recent geological reviews are challenging this paradigm. A review of the limited historical drill hole data intersecting mineralised structures below the favourable stratigraphy includes zones of quartz development along the fault structure. Vein and geochemical vectors from those drill intersections indicate the precious metal window conducive to low sulphidation epithermal mineralisation extends several hundreds of metres below the current Mineral Resource deposits. A range of conceptual drill targets have been identified and will be targeted in FY2022.

Within the June 2020 quarter, one drill hole was completed targeting the Klondyke structure 300 metres down plunge from previous drilling along the structure. The drill hole intersected the Klondyke structure at the target position, with stockwork quartz veining developed along the structure. The drill intersection is interpreted to be marginally below the low sulphidation epithermal window. The drill hole does indicate it is possible further mineralisation could develop within the 300 metre window between the drill intersection and known ore shoots. Further drilling is planned, testing for evidence of mineralisation below the base of the previous prospectivity window along the highly endowed Klondyke structure. The Klondyke mineralised structure hosts the Royal and Cracow deposits, which combined have produced approximately 800,000 ounces of gold via underground mining between 2004 to 2009.

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Cracow Exploration brownfield target areas

Annual Report 2021

Near mine underground Resource definition drilling

The reintroduction of underground diamond drilling commenced in September 2020. The initial focus was the completion of a grade control program to assist with identification of near-term production opportunities. In parallel, a detailed geological review defining additional drill targets surrounding underground infrastructure across the Western Field was completed. The work generated many high priority drill targets, sufficient to sustain an additional drill rig throughout the second half of FY2021. Resource definition focused on extensions at the Sterling, Sovereign, Crown, Royal and Tipperary deposits. In all cases the mineralised lodes were extended beyond the previous Mineral Resource footprint.

Klondyke - Royal surface drilling

The Klondyke and Royal deposits are high grade shoots which form along the same mineralised structure. The drill program was designed to infill around existing drill hole data above the higher grade Klondyke deposit and test the extent of mineralisation along the structure between both deposits. In total, 23 shallow RC drill holes were completed within the Klondyke to Royal corridor. Significant drill hole assay results included:

KDS002 7.0m @ 11.6g/t Au (true thickness 3.3m);
KDS003 3.0m @ 3.1g/t Au (true thickness 1.7m); and
KDS017 4.0m @ 2.9g/t Au (true thickness 1.4m).

The drill program led to an updated Mineral Resource estimate, resulting in a 324% increase in contained gold.

Torrens JV (Aeris 70%)

Aeris’ South Australian greenfield exploration project, the Torrens Project, is a joint venture between Aeris (70% interest) and Kelaray Pty Ltd (a wholly owned subsidiary of Argonaut Resources NL). The joint venture is exploring for iron-oxide copper-gold (IOCG) systems within exploration tenement EL6407.

A trial passive seismic survey was undertaken during the year which was designed to clarify whether it’s

possible to identify the Quaternary and Tertiary lithologies below Lake Torrens. Four traverses were completed, totalling 19 line kilometres. The survey was successful in identifying the contact between the Arcoona quartzite and the overlying Tertiary sediments. Results from the survey will be used to update the stratigraphic models as a means to refine gravity geophysical models.

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Aeris Resources

2021 Resources and Reserves

Annual Report 2021

Aeris Resources Limited has updated its Mineral Resource and Ore Reserve estimates for its 100% owned Tritton Copper Operations and Cracow Gold Operations at 30 June 2021.

Aeris’ Statement of Mineral Resources and Ore Reserves at 30 June 2021 for the Tritton and Cracow Operations have been reported in accordance with the guidelines in the 2012 Australasian Code for Reporting

of Exploration Results, Mineral Resources and Ore Reserves (JORC Code 2012). Complete documentation of the estimates can be found on the Company website: www.aerisresources.com.au.

Tritton Copper Operations

Total reported Measured and Indicated Mineral Resource estimate, after mining depletion, are 10.9 million tonnes at 1.4 percent copper for 160,000 tonnes of contained copper metal. Inferred Mineral Resource is 5.7 million tonnes at 1.3 percent copper for 73,000 tonnes of contained copper.

The 2021 estimate is a 10 percent net decrease in contained copper compared with the 30 June 2020 estimate.

Total reported Proved and Probable Ore Reserves, after mining depletion, are estimated at 5.3 million tonnes

at 1.3 percent copper for 69,000 tonnes of contained copper metal. The Ore Reserve has been reduced by 17,000 tonnes of copper since the last estimate at 30 June 2020, a 20 percent net decrease in contained copper.

Actual copper production was 23,000 tonnes in concentrate with processing recoveries estimated at 94 percent, equivalent to 25,000 tonnes of copper contained in ore. Ore Reserve depletion less than production is due to change in; cut-off grade; Mineral Resource models; and extension of in-mining designs.

Cracow Gold Operations

Total reported Measured, Indicated and Inferred Mineral Resource estimate, after mining depletions, are 3.9 million tonnes at 3.1 grams per tonne gold for 390,000 ounces of contained gold metal.

This represents a 31 percent net increase in contained gold compared with the 30 June 2020 estimate.

Total reported Proved and Probable Ore Reserves, are estimated at 0.69 million tonnes at 4.1 grams per tonne

gold for 90,000 ounces of gold. The Ore Reserve has been reduced by 1 thousand ounces of gold since the last estimate dated 30 June 2020.

Actual mine depletion of 73,000 ounces of gold from the Ore Reserve during this period was replaced by gold added due to design changes and revised gold price assumption. Some of the depletion was gold mined from outside the Mineral Resource and Ore Reserve, which is normal for Cracow.

Aeris Resources

Mineral Resource

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Tritton Copper Operations

The Tritton Copper Operations is located 45 kilometres north-west of Nyngan in central-western New South Wales.

The Tritton Copper Operations area is host to a cluster of copper deposits. Copper deposits are hosted within Ordovician aged turbidite sequences from the Girilambone basin. The Girilambone basin forms part of the Lachlan Fold Belt. The deposits are characterised by massive to semi-massive pyrite and chalcopyrite sulphide occurrences. Deposit geometries are typically tabular. Dimensions vary depending on the size of the system and range between a strike of 15 metres to 250 metres; down-dip length of 90 metres to in excess of 2,000 metres and from 2 metres to 80 metres in width. Mineralised assemblages are dominated by pyrite with lesser chalcopyrite, and minor gold and silver concentrations. Primary copper mineralisation occurs as banded and stringer chalcopyrite within pyrite rich units.

The Tritton Copper Operations area deposits’ Mineral Resource estimates are defined primarily from diamond drilling with a minor proportion of reverse circulation percussion drilling at Murrawombie. Holes are geologically logged and assayed. Mineral Resource

volumes are developed from geology interpretation of the drill hole data at nominal copper cut-off grades between 0.4% to 0.5% copper (varies with the deposit). Quality assurance and control procedures are in place for the assay information used in the resource estimation. The deposits are all located on a granted Mining Lease or Exploration Licence Resource modelling and grade interpolation within the interpreted mineralised volumes use Ordinary Kriging with careful domain control to limit the influence of high-grade data. Reconciliation of Mineral Resource estimates against mined and processed ore for the Tritton and Murrawombie deposits mined during the year shows comparable tonnage and a small decrease in copper grade after allowance for dilution and ore loss. Details of the Mineral Resource estimates can be found in the reports on Aeris’ website.

Tritton deposit changes

Since 30 June 2020, the Tritton deposit Measured, and Indicated Mineral Resource has been reduced by an estimated 17,000 tonnes of contained copper metal. Changes to the Mineral Resource include

Annual Report 2021

depletions associated with mining and sterilisation of the Mineral Resource surrounding mined stopes and along the margins of the orebody as mineralised thicknesses thin and pinch out. An updated geological interpretation has led to an increased reporting volume which is responsible for replacing some of the Mineral Resource Inventory after depletion and sterilisation. Grade control and resource definition drilling has been limited and focused on drilling within the Measured and Indicated Mineral Resource. As a result, there was no opportunity to increase the Indicated and Inferred Mineral Resource inventories. The updated geological model has led to an approximate 553,000 tonnes increase in Total Mineral Resource based on improved geological understanding and an increase in continuity. The mine depletion totals approximately 967,000 tonnes resulting in a net decrease in the Total Mine Resource estimate since last report.

Measured Mineral Resource is reported down to the 4,000mRL level based on close spaced 20 metres by 20 metres grade control drilling. Indicated Mineral Resource is based on resource definition drilling on a nominal 40 metres by 40 metres drill spacing. Indicated Mineral Resource is reported between 4,000mRL to 3,950mRL. A small quantity of additional Indicated Mineral Resource is reported from remnant pillars in the Tritton upper levels (4,655mRL to 4,565mRL). Inferred Mineral Resource is based on variable drill spacings from 50 metres by 50 metres to 100 metres by 100 metres. Two separate zones of Inferred Mineral Resource have been classified (Tritton below 3,950mRL and South Wing). Tritton below 3,950mRL is the continuation of the Tritton mineralised system below Measured and Indicated Mineral Resource. Inferred Mineral Resource is reported to the 3,850mRL level. The South Wing is located immediately along strike (south) from the main Tritton mineralised system. South Wing is interpreted to be located in the hanging wall to the main Tritton deposit.

Tritton Upper level remnant pillars

The Tritton upper level remnant pillars are a small portion of the Tritton deposit Indicated Mineral Resource estimate, (70,000 tonnes). They are the remnant blocks of mineralisation left between mined

out stopes that have not been filled with cemented paste backfill. Due to the higher risk nature of pillar mining these blocks of mineralisation are critically reviewed to ensure they have a reasonable likelihood of successful extraction to qualify for inclusion in the Mineral Resource estimate.

Mining of the pillars during the year to the end of June 2021 depleted the Indicated Mineral Resource by an estimated 1,600 tonnes of contained copper metal. No Ore Reserve estimate is reported from the remaining pillar Mineral Resource. Geotechnical conditions are poor due to the relaxation of the pillar rock mass over time. The poor conditions have made mining difficult.

Murrawombie deposit changes

Since 30 June 2020, the Murrawombie deposit Indicated Mineral Resource has been reduced by an estimated net 5 thousand tonnes of contained copper metal. Drilling throughout the financial year 2021 has defined three new lodes. The new lodes are located in the hanging wall and to the North of previously known lodes. The newly defined lodes; 110, 112 and 114 are currently smaller in size than the larger 115 HW lode.

Drill spacing through a majority of the known Mineral Resource is defined by a 20 metres x 20 metres drill spacing to the 4,660mRL level and focused on lodes 101, 102, 108, 109 and the upper portion of the hanging wall (HW) lodes 110 to 115. Mineralisation defined on a 20 metres x 20 metres to 40 metres x 40 metres drill spacing is generally classified as Indicated Mineral Resource. Drilling below the 4,600mRL becomes progressively wide spaced (average 40m x 60m) to the 4,500mRL level. Mineralisation defined below the 4,600mRL level is classified as Inferred Mineral Resource.

Drilling throughout the financial year has replaced depletions associated with mining and sterilisation albeit at a slightly lower copper grade. Drilling resulted in the conversion of Inferred Mineral Resource to Indicated Mineral Resource. Opportunities to increase the Inferred Mineral Resource inventory was limited. The Inferred Mineral Resource has decreased approximately 50%.

Aeris Resources

Cracow Gold Operations

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The Cracow Gold Operation is located about 3 kilometres from the town of Cracow and 500 kilometres north-west of Brisbane, Queensland.

The Cracow Gold Operation is host to a series of low sulphidation epithermal gold deposits. Mineralisation is associated with several major North North-West, North and North-East trending steeply dipping fault structures. These structures are hosted in Early Permian andesitic lavas of the Camboon Volcanics. Along each mineralised fault structure high grade gold shoots develop at sites of increased dilation associated with particular brittle andesitic host rocks. Dimensions of high grade gold shoots range between 90 metres to 500 metres (strike), 90 metres to 250 metres (down dip) and from 2 metres to in-excess of 10 metres thick. Gold mineralisation is associated with discrete epithermal veins and/or stockwork veining and are composed of quartz +/- adularia +/- carbonate veins. Sulphide percentages in the veins are generally low (<3%) primarily composed of pyrite, with minor occurrences of hessite, sphalerite and galena. Vein textures include banding (colloform, crustiform, cockade and moss), breccia channels and massive quartz.

The Cracow Gold Operations area deposits’ Mineral Resource estimates are defined by diamond drilling. Drill holes are geologically logged identifying key features to aid with interpretation. Mineral Resource

volumes are defined from a combination of veining information and gold grade. Both discrete “vein/lode” domains, mineralised halo or stockwork domains are interpreted based off a combination of epithermal vein percentage, vein texture and gold grade. Quality assurance and control procedures are in place for the assay information used in the resource estimation. The deposits are all located on a granted Mining Lease. Ordinary Kriging was the preferred method of estimation used. In some cases, other estimation techniques such as Inverse Distance (squared or cubed) or categorical indicator kriging have been applied. Details of the Mineral Resource estimates can be found in the reports on Aeris’ website.

Cracow deposit changes

Since the previous reporting period (30 June 2020) Material changes to the Cracow Mineral Resource from the previous reporting period include mine depletion, updated geological models for several deposits, additions from resource definition drilling and a change in the reporting methodology. The updated Mineral Resource has led to an approximate 1,560,000 tonnes and 90,000 ounces increase in Total Mineral Resource. The increased Mineral Resource Inventory is primarily associated with a change in the reporting methodology. For each mineralised lode, Mineral Resource is reported from within 1.5 g/t Au cut-off bounding grade shells. This differs from previous reporting criteria which used conceptual stope shapes to report within each deposit. Resource definition drill programs during the year have resulted in a modest increase in the reported Mineral Resource Inventory. These increases are in addition to those from the change in methodology but hard to identify as separate inventory.

The Cracow Mineral Resource has been classified as Measured, Indicated and Inferred, based on drill spacing, confidence in the geological interpretation and underground development. Measured Mineral Resource is confined to areas of close spaced 20 metres by 20 metres grade control drilling with ore drive development and face sample data. This differs from Indicated Mineral Resource which is based on the close spaced 20 metres by 20 metres grade control drilling. Inferred Mineral Resource is associated with wider spaced drilling, up to a nominal 60 metres by 60 metres.

Annual Report 2021

2021 Mineral Resource Tritton Tenement Package

June 2021

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Tonnes (kt) Cu (%) Cu (kt) Au (g/t) Au (koz) Ag (g/t) Ag (koz)
TRITTON UNDERGROUND
Measured 3,500 1.3 45 0.1 11 3.6 400
Indicated 840 1.2 10 0.1 2 2.3 63
Total M + I 4,400 1.3 55 0.1 13 3.3 470
Inferred 2,400 1.1 27 0.1 11 4.2 330
TOTAL 6,800 1.2 82 0.1 24 3.6 800
TRITTON PILLARS (RECOVERABLE)
Measured - - - - - - -
Indicated 70 2.0 1 0.3 1 11.7 27
Total M + I 70 2.0 1 0.3 1 11.7 27
Inferred - - - - - - -
TOTAL 70 2.0 1 0.3 1 11.7 27
MURRAWOMBIE
Measured - - - - - - -
Indicated 3,900 1.5 57 0.3 34 4.6 570
Total M + I 3,900 1.5 57 0.3 34 4.6 570
Inferred 610 1.4 9 0.3 6 4.2 82
TOTAL 4,500 1.4 65 0.3 40 4.5 660
AVOCA TANK
Measured - - - - - - -
Indicated 770 2.9 23 0.9 21 15.6 390
Total M + I 770 2.9 23 0.9 21 15.6 390
Inferred 130 1.0 1 0.2 1 3.2 13
TOTAL 900 2.6 24 0.8 22 13.8 400
BUDGERYGAR
Measured - - - - - - -
Indicated - - - - - - -
Total M + I - - - - - - -
Inferred 2,300 1.5 34 0.2 15 5.2 380
TOTAL 2,300 1.5 34 0.2 15 5.2 380
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Aeris Resources

June 2021 (Continued)

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Tonnes (kt) Cu (%) Cu (kt) Au (g/t) Au (koz) Ag (g/t) Ag (koz)
BUDGERY
Measured - - - - - - -
Indicated 1,700 1.1 19 0.1 7 - -
Total M + I 1,700 1.1 19 0.1 7 - -
Inferred 280 0.9 3 0.1 1 - -
TOTAL 2,000 1.1 22 0.1 8 - -
STOCKPILES
Measured 27 1.3 0.4 - - - -
Indicated - - - - - - -
Total M + I 27 1.3 0.4 - - - -
Inferred - - - - - - -
TOTAL 27 1.3 O.4 - - - -
TOTAL
Measured 3,600 1.3 45 0.1 11 3.5 400
Indicated 7,300 1.5 110 0.3 65 4.5 1,050
Total M + I 10,900 1.4 160 0.2 76 4.2 1,460
Inferred 5,700 1.3 73 0.2 33 4.4 810
TOTAL 16,600 1.4 230 0.2 110 4.2 2,260
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June 2020

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Tonnes (kt) Cu (%) Cu (kt) Au (g/t) Au (koz) Ag (g/t) Ag (koz)
TRITTON UNDERGROUND
Measured 3,800 1.5 56 0.1 12 4.3 520
Indicated 700 1.4 10 0.1 1 2.3 52
Total M + I 4,500 1.5 66 0.1 13 4.0 570
Inferred 2,600 1.2 31 0.1 11 4.1 340
TOTAL 7,100 1.4 97 0.1 25 4.0 920
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Annual Report 2021

June 2020 (Continued)

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Tonnes (kt) Cu (%) Cu (kt) Au (g/t) Au (koz) Ag (g/t) Ag (koz)
TRITTON PILLARS (RECOVERABLE)
Measured - - - - - - -
Indicated 140 2.2 3 0.3 1 10.7 48
Total M + I 140 2.2 3 0.3 1 10.7 48
Inferred - - - - - - -
TOTAL 140 2.2 3 0.3 1 10.7 48
MURRAWOMBIE
Measured - - - - - - -
Indicated 3,900 1.6 62 0.3 38 5.1 640
Total M + I 3,900 1.6 62 0.3 38 5.1 640
Inferred 1,200 1.1 13 0.3 10 4.8 180
TOTAL 5,100 1.5 75 0.3 48 5.0 820
AVOCA TANK
Measured - - - - - - -
Indicated 770 2.9 23 0.9 21 15.6 390
Total M + I 770 2.9 23 0.9 21 15.6 390
Inferred 130 1.0 1 0.2 1 3.2 13
TOTAL 900 2.6 24 0.8 22 13.8 400
BUDGERYGAR
Measured - - - - - - -
Indicated - - - - - - -
Total M + I - - - - - - -
Inferred 2,300 1.5 34 0.2 15 5.2 380
TOTAL 2,300 1.5 34 0.2 15 5.2 380
BUDGERY
Measured - - - - - - -
Indicated 1,700 1.1 19 0.1 7 - -
Total M + I 1,700 1.1 19 0.1 7 - -
Inferred 280 0.9 3 0.1 1 - -
TOTAL 2,000 1.1 22 0.1 8 - -
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Aeris Resources

June 2020 (Continued)

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Tonnes (kt) Cu (%) Cu (kt) Au (g/t) Au (koz) Ag (g/t) Ag (koz)
STOCKPILES
Measured 11 1.4 0 .2 - - - -
Indicated - - - - - - -
Total M + I 11 1.4 0 .2 - - - -
Inferred - - - - - - -
TOTAL 11 1.4 0.2 - - - -
TOTAL
Measured 3,800 1.5 56 0.1 12 4.3 520
Indicated 7,300 1.6 120 0.3 69 4.8 1,130
Total M + I 11,000 1.6 170 0.2 81 4.7 1,650
Inferred 6,500 1.3 82 0.2 38 4.4 920
TOTAL 17,500 1.5 250 0.2 120 4.6 2,570
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Note: 1. Mineral Resource cut-off grades: 0.6% Cu Tritton, 0.6% Cu Murrawombie, 0.6% Cu Avoca Tank, 0.8% Cu Budgerygar and 0.5%Cu Budgery. 2.Gold and silver grades have been reported for the FY2021 Mineral Resource estimates at Tritton, Murrawombie, Avoca Tank, Budgerygar and Budgery (gold only). The Mineral Resource estimate for Budgery does not include silver estimates. Consequently, silver grade and metal figures are omitted from the Total Reported Figures.

Discrepancy in summation may occur due to rounding.

2021 Mineral Resource Cracow Tenement Package

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June 2021 June 2020
Tonnes Au Au Ag Ag Tonnes Au Au Ag Ag
(kt) (g/t) (koz) (g/t) (koz) (kt) (g/t) (koz) (g/t) (koz)
CRACOW CRACOW
Measured 200 9.1 59 5.7 37 Measured 200 7.8 53 5.2 37
Indicated 1,400 3.7 170 3.1 140 Indicated 690 5.9 130 4.4 95
Total M + I 1,600 4.3 230 3.4 180 Total M + I 890 6.3 180 4.6 130
Inferred 2,300 2.3 170 1.5 110 Inferred 1,400 2.6 120 1.6 73
TOTAL 3,900 3.1 390 2.3 290 TOTAL 2,300 4.0 300 2.8 200
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Note: 1. Mineral Resource cut-off grade 1.5g/t Au for all Cracow deposits.

Discrepancy in summation may occur due to rounding.

Competent Person Statement

Mr Brad Cox confirms that he is the Competent Person for all the Mineral Resource estimates summarised for Tritton Copper Operations and Cracow Gold Operations in this Report and he has read and understood the requirements of the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code, 2012 Edition). Mr Cox is a Competent Person as defined by the JORC Code, 2012 Edition, having relevant experience to the style of mineralisation and type of deposit described in the Report and to the activity for which he is accepting responsibility. Mr Cox is a Member of the Australasian Institute of Mining and Metallurgy (MAusIMM No. 220544). Mr Cox has reviewed the Report to which this Consent Statement applies and consents to the inclusion in the Report of the matters based on his information in the form and context in which it appears. Mr Cox is a full time employee of Aeris Resources Limited.

Mr Cox has disclosed to the reporting company the full nature of the relationship between himself and the company, including any issue that could be perceived by investors as a conflict of interest. Specifically, Mr Cox is entitled to 1,836,725 Performance Rights issued under the Company’s equity incentive plan (details of which were contained in the Notice of Annual General Meeting dated 20 October 2020). The vesting of these Performance Rights is subject to certain performance and employment criteria being met.

Annual Report 2021 39

Aeris Resources

Ore Reserves

Tritton Copper Operations

The 30 June 2021 Ore Reserves estimate is a revision of the 30 June 2020 estimate that accounts for changes in the Mineral Resource; depletion due to mining; changes to cut-off grades; and mine design changes.

The mining method assumed in the Ore Reserve estimate varies with the deposit. At the Tritton deposit, the method is sub-level open stoping with cemented paste fill. At the Murrawombie deposit, the ore is extracted using underground bench stopes and small open stopes with cemented rockfill. Future mining of the shallow portion of the Murrawombie deposit will be by open pit, as the final extraction stage. The yet to be developed Avoca Tank deposit project design assumes the use of up-hole benching with dry rock fill.

The cut-off grade criteria applied at all deposits is copper grade, (percent copper). The cut-off grade is applied as a whole of stope average grade after dilution factors are applied. There are no significant deleterious elements in the ore and the by-product value of gold and silver is of modest economic importance. Where considered appropriate, the precious metal value is managed by applying a small copper equivalent credit to the cut-off grade.

The Tritton deposit Ore Reserve estimate has decreased from depletion due to mining. Additions to the Ore Reserve result from the inclusion of material on the lower levels of the mine. Production during the year since last report was 1,041,000 tonnes at 1.37%; 14,000 tonnes contained copper. Net depletion of the Ore Reserve was 14,000 tonnes of copper.

The Ore Reserve cut-off grade at Tritton deposit has been reduced to 0.8% copper. For the 2020 Ore Reserve estimate, the cut-off grade was 1.2% copper. The lower cut-off grade used in 2021 is a significant change. It resulted in increased conversion of the Mineral Resource to Ore Reserve on the lower levels of the mine. A much higher copper price compared to 2020 and a decision that extending life of the Tritton mine is essential to maintain continuity of production over the 2021 to 2023 period. New and higher-grade mines are planned to supplement declining production from the

Tritton deposit. The new mines will take time to receive government approvals and to bring into production. Economic evaluations of the entire Tritton Copper Operations support the decision to reduce the cut-off grade for the Tritton deposit.

The Mineral Resource is reported using a lower cut-off grade of 0.6% copper. The difference in cut-off grade between Ore Reserve and Mineral Resource, combining with changes in the character of the deposit at depth, means that a large portion of the available Mineral Resource has not converted to Ore Reserve due to economic constraints. The residual Mineral Resource remains available for future mining review.

Tritton deposit has changed with increasing depth from a deposit with one to two lenses of massive to stringer ore with a small halo of lower grade disseminated mineralisation, into multiple smaller lenses of massive to stringer ore within a much larger volume of disseminated mineralisation. This change in deposit character makes the estimate of Mineral Resource and Ore Reserves sensitive to cut-off grade selection, where it has not been historically. Hence the difference in cut-off grade Ore Reserve to Mineral Resource now has a material impact on the rate of conversion of Mineral Resource to Ore Reserve.

The Murrawombie deposit Ore Reserve has decreased from depletion due to mining. Diamond drilling and geological modelling have added to the available Mineral Resource, offsetting depletion. Production during the year since the last estimate was 533,000 tonnes of ore at 1.92% copper; 10,000 tonnes copper. Net depletion of the Ore Reserve estimate is 4,000 tonnes of copper.

The Murrawombie deposit contains several discrete lenses. The lenses included in the Ore Reserve underground mining are the 102, 105, 108, 110 and 115 lodes.

A cut-off grade of 1.2% copper is used to estimate Ore Reserve in the higher-grade lodes; 102, 108, 110, 115. A cut-off grade of 0.9% copper is used for the lower grade 105 lense. The 105 lense will be mined in retreat at the

Annual Report 2021

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end of mine life and does not need to carry mine capital costs. Stopes that can be mined at marginal cost on an already developed sublevel are assessed and where economic will be included as Ore Reserve at the lower cut-off grade of 1% copper.

Murrawombie deposit has a separate Ore Reserve estimate for open pit mining. The open pit Ore Reserve is estimated for a small final push back on the existing open pit. The expanded open pit will extract mineralisation in the pit wall, and from remnant areas above the underground mine where underground stoping is not viable. The Murrawombie open pit Ore Reserve has not changed since last report.

The Avoca Tank Ore Reserve estimates have not changed since last report. At the Avoca Tank deposit, the Ore Reserve cut-off grade is 1.2% copper. This deposit is high grade and not sensitive to cut-off grade.

All Ore Reserves estimates for the underground mines are entirely sulphide mineralisation. This ore will be treated in the Tritton processing plant by flotation techniques. An average recovery of copper to concentrate of 93 to 95 percent is assumed, consistent with historical plant performance.

Ore Reserves are estimated following the application of modifying factors that account for dilution and ore loss. The factors applied vary with the deposit, detailed design of the stopes, fill exposures and planned extraction sequence.

Details of the Ore Reserve estimates can be found in the Mineral Resource and Ore Reserve reports on the Aeris web site. All estimates are reported according to the 2012 Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.

Aeris Resources

Cracow Gold Operations

The 30 June 2021 Ore Reserves estimate for the Cracow gold deposits is a revision of the 30 June 2020 estimate that accounts for depletion due to mining, change in the Mineral Resources cut-off grade policy, updated gold price assumptions and mine design.

There are 15 separate deposits being mined, all by underground methods. The Ore Reserve estimate reported is a consolidation of the estimates for the fifteen deposits. Fourteen of the deposits are accessed via the Cracow mine infrastructure. The Roses Pride mine infrastructure is three kilometres to the North of the main Cracow mine.

Several mining methods are used for the extraction of stopes at Cracow:

Modified Avoca. This is the primary method of extraction at Cracow. A bottom-up extraction method. Stopes are backfilled with dry rockfill;
Uphole retreat. A method used on the top level of an orebody or in a sill pillar. Stopes remain open as there is no backfill horizon;
Benching. Used on the bottom level of an orebody to extract ore that would not be economical to mine conventionally (capital costs associated with another level below); and
Transverse stoping. A method used in wider (>15m) areas to ensure maximum recovery.

The gold price assumption has been increased to $1750/ oz from the December 2019 Reserves assumption of $1450/oz. This was adjusted after a review of reserve gold prices applied by industry peers. The reserves subject to the $1750/oz price assumption are extremely low risk; less than 800 metres of additional lateral capital and waste development is required to establish these ore sources. These ore sources can be accessed in a short period of time, limiting exposure to any changes in the gold price.

The Cracow Ore Reserve estimate has been depleted by mining in the period since the last report. The mining depletion has been replaced by new Ore Reserves. There was a net increase in Ore Reserves tonnes and a 1,000 ounce increase in contained gold.

Ore Reserves are estimated following the application of modifying factors that account for dilution, recoveries, mining and processing costs. The factors applied in the estimation calculations vary with the deposit, size and width of the stopes and planned extraction sequence. The criteria includes specific recovery factors unique to each ore body consistent with historical plant performance. An economic evaluation is completed for each stope and mining area because costs will vary materially with the access development required. Profitable stopes and mining areas are included in the Ore Reserves.

A significant increase in Mineral Resources has allowed evaluation of new areas for mining within the known gold deposits. This has resulted in additional Ore Reserve tonnes, although at a lower grade compared to the last report. The metal price assumed for economic evaluation was $2,200/oz. This is an increase on the last report, which assumed $1,750/oz. Additional stopes were designed and passed the economic evaluation at the higher price gold price assumption to increase the Ore Reserve.

There are areas of Mineral Resources remaining that have not yet been fully evaluated for conversion to Ore Reserves and are available for future review.

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Annual Report 2021

2021 Ore Reserves Tritton Tenement Package

June 2021

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Tonnes (kt) Cu (%) Cu (kt) Au (g/t) Au (koz) Ag (g/t) Ag (koz)
TRITTON UNDERGROUND
Proved 1,800 1.2 21 0.1 4 3.0 170
Probable - - - - - - -
TOTAL 1,800 1.2 21 0.1 4 3.0 170
MURRAWOMBIE UNDERGROUND
Proved - - - - - - -
Probable 1,100 1.4 15 0.3 10 0.0 157
TOTAL 1,100 1.4 15 0.3 10 0.0 157
MURRAWOMBIE OPEN PIT
Proved - - - - - - -
Probable 1,600 0.9 14 0.1 8 2.8 150
TOTAL 1,600 0.9 14 0.1 8 2.8 150
AVOCA TANK
Proved - - - - - - -
Probable 700 2.5 18 0.8 18 - -
TOTAL 700 2.5 18 0.8 18 - -
STOCKPILES
Proved 27 1.3 0.4 - - - -
Probable - - - - - - -
TOTAL 27 1.3 0.4 - - - -
TOTAL
Proved 1,800 1.2 22 - - - -
Probable 3,400 1.4 47 - - - -
TOTAL 5,300 1.3 69 - - - -
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Aeris Resources

June 2020

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Tonnes (kt) Cu (%) Cu (kt) Au (g/t) Au (koz) Ag (g/t) Ag (koz)
TRITTON UNDERGROUND
Proved 1,200 1.5 17 0.1 4 5.4 200
Probable 1,100 1.6 17 0.1 3 3.5 120
TOTAL 2,200 1.6 34 0.1 7 4.5 320
MURRAWOMBIE UNDERGROUND
Proved - - - - - -
Probable 1,100 1.7 19 0.4 13 5.6 200
TOTAL 1,100 1.7 19 0.4 13 5.6 200
MURRAWOMBIE OPEN PIT
Proved - - - - - - -
Probable 1,600 0.9 14 0.1 8 2.8 150
TOTAL 1,600 0.9 14 0.1 8 2.8 150
AVOCA TANK
Proved - - - - - - -
Probable 700 2.5 18 - - - -
TOTAL 700 2.5 18 - - - -
STOCKPILES
Proved 11 1.4 0.2 - - - -
Probable - - - - - - -
TOTAL 11 1.4 0.2 - - - -
TOTAL
Proved 1,200 1.5 17 - - - -
Probable 4,500 1.5 68 - - - -
TOTAL 5,700 1.5 86 - - - -
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Note: 1. Discrepancy in summation may occur due to rounding.

Cut-off grades vary between deposits and are selected based on economic analysis. They are not a break-even cut-off.
Mineral Resources are quoted as INCLUSIVE of the Ore Reserve estimate.
All Mineral Resource that is available for conversion to Ore Reserve has been evaluated and is included in the Ore Reserve estimate where it meets economic and other criteria.

Annual Report 2021

2021 Ore Reserves Cracow Tenement Package

June 2021 Tonnes (kt) Au (g/t) Au (koz) CRACOW Proved 172 4.9 27 Provable 519 3.8 63 TOTAL 690 4.1 90	June 2020
	Tonnes (kt) Au (g/t) Au (koz)
	CRACOW
	Proved 278 5.2 46
	Provable 268 4.9 43
	TOTAL 546 5.1 89

Competent Person Statement

Mr Ian Sheppard confirms that he is the Competent Person for all the Ore Reserve estimates summarised for Tritton Copper Operations and Cracow Gold Operations in this Report and Mr Sheppard has read and understood the requirements of the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code, 2012 Edition). Mr Sheppard is a Competent Person as defined by the JORC Code, 2012 Edition, having relevant experience to the style of mineralisation and type of deposit described in the Report and to the activity for which he is accepting responsibility. Mr Sheppard is a Member of The Australasian Institute of Mining and Metallurgy, No. 105998. Mr Sheppard has reviewed the Report to which this Consent Statement applies and consents to the inclusion in the Report of the matters based on his information in the form and context in which it appears. Mr Sheppard is a full time employee of Aeris Resources Limited.

Mr Sheppard has disclosed to the reporting company the full nature of the relationship between himself and the company, including any issue that could be perceived by investors as a conflict of interest. Specifically, Mr Sheppard holds 12,118,137 shares in Aeris Resources Limited and is also entitled to 5,102,015 Performance Rights issued under the Company’s equity incentive plan (details of which were contained in the Notice of Annual General Meeting dated 20 October 2020). The vesting of these Performance Rights is subject to certain performance and employment criteria being met.

Aeris Resources

Section Sustainability Break

Annual Report 2021

Our Sustainability Approach

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Every day, people make personal choices and business decisions regarding sustainability, and to improve, protect and make things better. In turn, people make decisions based on the options presented, and their value systems.

The Aeris sustainability approach is derived from similar principles. Every day people make choices and decisions to create a sustainable future, from the executive suite to the operator at the mine site. The values we deem important, shape our decisions and actions across the business from safety to people, heritage, social, environment, growth, and the economy. We are outcomes focused and deliberate in our intent. We carefully utilise the resources at our disposal, respect the landscape and ecosystems in which we operate, and care about the relationships we build and grow. We pride ourselves on seeing and realising the potential of something others may not. We listen, we learn, and we adapt.

In 2021, delivering into its growth strategy, Aeris evolved into a multi-site mining and exploration company, with a pipeline of development and exploration projects. We have built sustainability and futures-thinking into our project life cycle and

day-to-day business. Our company prides itself on having minimal environmental impact and high social value, and we are a respectful and supportive partner with strong connections to country.

Aeris is focused on being a human and environmentally sustainable enterprise, not only today and tomorrow, but long into the future. We produce copper and gold, unlock employment opportunities, and create demand for services in our communities. Our strength is in the quality and potential of our people, in proactively engaging our community stakeholders, our agile thinking, and our persistence for excellence in the design and management of our mine sites, and the delivery of outcomes.

We exist in a time where sustainability leadership is of paramount importance, as the world pivots to address climate change, and the scarcity of natural resources. The challenge for sustainability leadership includes meeting net zero carbon emission targets, maintaining compliance with water use protections, and championing heritage, biodiversity, and equality. Aeris recognises the importance of our position as a sustainability leader and understands the essential role we play as stewards of the resources entrusted to us by community stakeholders and Traditional Custodians.

Aeris Resources

Sustainability Report 2021

With our Company having grown substantially over the past year as we added a second operating asset (Cracow Gold Operations), our social footprint has increased significantly, this year we have taken the proactive step of preparing a standalone Sustainability report. For the purposes of this report, we have provided an overview in the areas of Safety, Environment and Community, however more comprehensive information can be found in the Sustainability Report for 2021.

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Annual Report 2021

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Safety Management

Safety is a core value of Aeris. We work safely and ensure our colleagues do the same. Our Health and Safety Policy details our commitment to safety, to working safely in good mental and physical health, and to travelling safely to and from work.

The plans are built to comply with the relevant State regulations and guidelines and the specific operational requirements of each respective mine.

Tritton Copper Operations

Aeris safety management process is based on risk management standards and processes including risk and hazard identification, consequence and likelihood impacts, and risk and safety management controls to eliminate or reduce risk to acceptable levels, workflow planning, and assurance.

We develop and maintain safe conditions by establishing risk and safety management controls including suitable equipment, fitness for work, engineering controls and authorisations, work practices and behaviours, monitoring, training and supervision.

During FY2021 safety performance at the Tritton Copper Operations continued its steady improvement. The sites leadership team committed to improving the safety performance following last year’s Total Reportable Injury Frequency Rate (TRIFR), reducing from 33 to 17 over the year. However, there were still five lost-time injuries experienced during this period.

A review and refresh of the site risk assessment and hazard management plans are in progress. Over time, change in management staff requires renewal of the knowledge in the risk assessment and acknowledgement of responsibilities within the hazard control plans.

The safety management systems at each operation are based off the same framework but differ in the detail.

Aeris Resources

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Cracow Gold Operations

The Cracow Gold Operations continued their excellent safety performance. At year-end, the TRIFR was 7.5, down on previous year’s result of 14 which is a reduction. There was one lost-time injury during the year, a cut hand became infected.

As part of post-acquisition integration process, we were pleased to see the results of the audits confirming Aeris’ view that Cracow has an effective safety management system. Following the acquisition of the Cracow Gold Operations, Aeris undertook a series of audits to review and assess the effectiveness of the safety management system. Aeris is committed to ongoing improvements and therefore welcomed the reviews and external audits of the safety management system. Audit recommendations for improvements to the system will be addressed over time as part of the standard system renewal. The major item completed by the end of the financial year was a broad brush risk assessment review and renewal, including employee consultative feedback sessions.

We are pleased to say the transfer of the training and safety records from the legacy Evolution Mining software systems into the software used by Aeris has nearly been completed.

Exploration safety

All exploration activity occurred at the operating mines during the year. Exploration related safety incidents are reported within the respective Tritton and Cracow statistics. There were two safety incidents of concern reported by exploration personnel during the period. At Cracow, a diamond drill hole intersected old workings, resulting in gas and water inrush that caused damage to a drill rig.

At Tritton, a drillers' off-sider suffered a finger injury while handling drill rods.

The significant increase in exploration activity at both operations over the last year and moving forward has increased the risk profile for exploration activities. In the FY2022 year, the hazard management plans for exploration activities will be refreshed with risk assessments and employee consultations.

Annual Report 2021

Aeris Resources

Environment

Aeris continues to entrench environmental monitoring throughout its operations, we are careful with resources we use, the land and ecosystems on which we operate and the relationships we foster and grow, this in turn creates environmental awareness behaviours with the workforce. A program of regular toolbox talks and environmental induction programs, paired with established environmental management systems and processes helps us to continue to embed this focus area in our business.

Tritton Copper Operations

We are pleased to confirm Tritton Copper Operations reported no significant environmental incidents.

at the cost of $450,000 in biodiversity offset credit purchase. Eventually, Tritton will establish an accredited biodiversity offset site on its own land to recover some of this expense. However, there is a process to achieve accreditation, which will likely take more than a year for this to occur.

Research into proving a neutralisation method for final mine closure and rehabilitation at the Murrawombie heap leach site was progressed with the construction of a trial site. The neutralising solution is a soda ash brine that is a waste product from gas extraction. NSW state approval was received after year end and the trial is targeted was due to commence in August 2021.

Cracow Gold Operations

Studies to update the mine closure plan commenced. New legislation in NSW will require Tritton to submit a revised mine rehabilitation plan in 2022, with more detail than has been required under previous regulations. Technical studies, including site and laboratory characterisation of materials to be used for site rehabilitation, were well advanced by year end.

Significant work was undertaken to progress the environmental approvals for the Avoca Tank underground mine project, including compliance with biodiversity offset legislation for mining projects in NSW. Avoca Tank project will disturb approximately 6 hectares of land

Cracow gold operations reported no significant environmental incidents during the period.

Construction of the new tailings storage facility (TSF#2) was completed in August 2021. Some rehabilitation works at the toe of the west wall on TSF#1 commenced during the year as part of the long term closure plan. Site and laboratory investigations were initiated to assist with the design of the capping, as part of the closure plan for TSF#1 and the idle TD4 tailings facilities. Actual closure works can commence after drying of TSF#1, and there is agreement with the state regulators on the capping design.

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Annual Report 2021

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Community

Aeris operates in a shared landscape surrounding Tritton Copper Operations and Cracow Gold Operations. We operate in the communities where our neighbours live and we are dedicated to being a good neighbour. We do what is expected of us as neighbours and we are accountable for our performance.

Our participation in the communities is multi-level, both as an employer and a partner, with Aeris being the major employer in both locations, and a major source of secondary employment and services in these regions.

The Company seeks to be an active participant in the economic and social wellbeing of the communities in which we operate and contributes to long-term prosperity in these regions by supporting programs which will thrive long into the future.

The active program of community participation near the Tritton Copper Operations and the Cracow Gold Operations includes (but is not limited to):

Education

Health

Sport and recreation

Community and social

Environmental

We are proud to be involved in community development initiatives such as (but not limited to):

Providing local apprentices with practical experience;
Provision of funding for local school activities; and
Sponsoring local sporting teams.

Aeris Resources

Directors' Report

Annual Report 2021

Directors' Report

The Directors present their report, together with the consolidated financial report of the Aeris Resources Limited Group (‘consolidated entity’), consisting of Aeris Resources Limited (‘Aeris’ or ‘Company’) and the entities it controlled at the end of, or during, the year ended 30 June 2021.

Directors

The Directors of the Company in office during the financial year and up to the date of this report were:

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Special Appointed/
Name, experience and other directorships
Responsibilities Resigned
Andre Labuschagne – Chairman and Non-Executive Director
Mr Labuschagne is an experienced mining executive with a career spanning Member of Appointed
over 30 years across operations in Australia, Indonesia, South Africa, PNG Nomination 20-Dec-2012
and Fiji. Mr Labuschagne has held various corporate and operational roles in Committee
companies including Norton Gold Fields, Emperor Gold Mines, DRD Gold and
AngloGold Ashanti. Mr Labuschagne holds a Bachelor of Commerce from
Potchefstroom University in South Africa.
Other current directorships (ASX listed entities): Magontec Limited
Former directorships in the past 3 years (ASX listed entities): None
Alastair Morrison – Independent Non-Executive Director
Mr Morrison is a highly experienced international banker. Mr Morrison has worked Member of Audit Appointed:
in private equity for over 30 years in the UK and Asia and has broad experience Committee and 10-Dec-2010
in growing companies across a range of industrial sectors. He was a founding Remuneration
Managing Director of Standard Chartered Private Equity. He was with Standard Committee
Chartered Bank from April 2002 until March 2014. Prior to joining Standard
Chartered Bank he spent 20 years at 3i Group, the leading European private
equity house, where he was Director for 3i Asia Pacific. He co-founded 3i’s Asia
Pacific operations in 1997, having previously run an investment team in London
focusing on buy-outs and expansion financing. Mr Morrison has investment
experience across a wide range of industries in Europe and Asia. He holds an M.A.
degree in Politics, Philosophy and Economics and M.Phil degree in Management
Studies from Oxford University.
Other current directorships (ASX listed entities): None
Former directorships in the past 3 years (ASX listed entities): None
Michele Muscillo – Independent Non-Executive Director
Mr Muscillo is a Partner specialising in corporate law with HopgoodGanim Chairman of the Appointed:
Lawyers. Mr Muscillo is an admitted Solicitor and has a practice focussed Audit Committee, 2-May-2013
almost exclusively on mergers & acquisitions and capital raising. Mr Muscillo has Remuneration
acted on a variety of corporate transactions including initial public offerings, Committee and
takeovers and acquisitions. Mr Muscillo has a Bachelor of Laws from Queensland Nomination
University of Technology and was a recipient of the QUT University Medal. Committee
Other current directorships (ASX listed entities): Xanadu Mines Limited
(ASX:XAM) and Mako Gold Limited (ASX:MKG).
Former directorships in the past 3 years (ASX listed entities): Cardinal Resources
Limited (ASX:CDV).
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Aeris Resources

Special Appointed/ Name, experience and other directorships Responsibilities Resigned Colin Moorhead – Independent Non-Executive Director Mr Moorhead is an experienced industry executive with a demonstrated track Appointed record over three decades of building value in mining companies through 27-July-2020 innovation, discovery, project development and safe, efficient operations. A geologist by training, Mr Moorhead is also known for strong leadership, strategy and execution. Mr Moorhead’s career has involved both operational and corporate executive responsibilities including global responsibility for exploration and resource development at Newcrest Mining and CEO of PT Merdeka Copper Gold (IDX:MDKA), where he built and led the team that constructed and commissioned the highly successful Tujuh Bukit Gold Mine. Colin is also currently Non-Executive Chairman of Xanadu Mines (ASX:XAM) and Executive Chairman of Sihayo Gold Limited (ASX: SIH).

Other current directorships (ASX listed entities): Xanadu Mines Limited, Sihayo Gold Limited and Coda Minerals (ASX:COD).

Former directorships in the past 3 years (ASX listed entities): Finders Resources Limited.

Marcus Derwin – Non-Executive Director

Mr Derwin is a highly experienced corporate executive and Board director, with Appointed an extensive background in corporate restructuring. He brings international 18-April-2016 experience, across a diverse range of industry sectors. His professional career has encompassed a combination of advisory and principal executive capacities, Resigned including managing a $A2Bn global Alternative Assets portfolio over 5 years 27-July-2020 and also the formation and management of a $A550m LIC. Additionally, he has advised boards – both public and private and worked within and alongside executive teams on implementation, stakeholder management and recapitalisation strategies. Mr Derwin’s professional background includes senior roles at AMP, National Australia Bank, Allco Equity Partners, PwC and KPMG.

Other current directorships (ASX listed entities): None

Former directorships in the past 3 years (ASX listed entities): None

Company Secretaries

ROBERT BRAINSBURY

Mr Brainsbury is an experienced financial executive and has held senior operational and finance roles with several blue chip industrial and resources companies including Norton Gold Fields, MIM, Xstrata, Rio Tinto

and BIS Industrial Logistics. Mr Brainsbury is a qualified accountant and holds a Bachelor of Business degree with majors in Accounting and Marketing.

DANE VAN HEERDEN – CA

Ms van Heerden is a qualified chartered accountant, with over 20 years’ experience in both Australia and abroad.

Annual Report 2021

Meetings Of Directors

The attendance of Directors at Board and Committee meetings during the financial year were as follows:

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Audit
Directors’
Director Committee
Meetings
Meetings
A B A B
Andre Labuschagne 15 15 - -
Alastair Morrison 15 15 2 2
Michele Muscillo 15 15 2 2
Colin Moorhead 15 15 - -
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A = Number of meetings held during the time the Director was a member of the Board and/or Committee

B = Number of meetings attended during the time the Director was a member of the Board and/or Committee

There were no meetings of the Remuneration Committee or Nomination Committee during the financial year. As the Board is comprised of four Directors, the Board considered it more effective to set aside time at Board meetings to specifically address the matters that would have been ordinarily attended to by the Remuneration Committee or Nomination Committee.

Corporate Governance

The Company’s Corporate Governance Statement for the year ended 30 June 2021 may be accessed from the Company’s website at https://www.aerisresources.com. au/investor-centre/#corporate-governance.

Principal Activities

The principal activities of the consolidated entity for the year ended 30 June 2021 were the production and sale of copper, gold and silver and the exploration for copper and gold. Other than as referred to on pages 57 to 58, there were no significant changes in those activities during the financial year.

Significant Changes In The State Of Affairs

Acquisition of Cracow Gold Operations (Cracow)

Aeris acquired Cracow from Evolution Mining Limited (Evolution) effective 1 July 2020.

The Cracow Transaction Consideration consisted of:

$60 million cash payable on completion;
a deferred cash payment of A$15 million due on 30 June 2022; and
10% net value royalty from 1 July 2022 to 30 June 2027, capped at A$50 million.

The A$60 million cash payment on completion was funded through:

a fully underwritten A$40 million equity raising (Equity Raise); and
a A$30 million acquisition bridge debt facility (Tranche C) with Special Portfolio Opportunity V Limited (SPOV), a subsidiary of a fund managed by PAG.

Extension of debt and contingent instrument facilities as a result of Acquisition of Cracow

The terms of both the existing Tranche A and Tranche B secured facilities were extended from 1 July 2021 to 1 July 2023;
Tranche B (US$11 million) amortisation was deferred to start on 1 July 2021 at US$2.5 million per quarter until repaid;
Tranche A (US$22 million) amortisation to commence once Tranche B is repaid, with amortisation of US$2.5 million per quarter and a bullet payment of the balance at the end of the term;
Tranche C (A$30 million) to be repaid in quarterly instalments of A$7.5 million, commencing 1 October 2020; and
The contingent instrument facility was increased to A$15 million for the replacement of financial assurances relating to Cracow.

Aeris Resources

Repayment of Debt

Aeris made all repayments (A$7.5 million each) on the A$30 million Tranche C (Acquisition Bridging) Facility ahead of schedule, fully repaying the facility before 30 June 2021.

Cash backing of the Contingent Instrument Facility for environmental bonding obligations, which has an outstanding balance of A$10 million, to be accelerated and fully extinguished by early Q4 in FY2022, approximately 14 months ahead of the original schedule; and
Debt repayments on Tranche A in FY2022 reduced from US$10 million (US$2.5 million per quarter) to a total of A$2 million, which will be paid at the end of Q4 FY2022. The debt repayment profile for Tranche A in FY2023 remains unchanged.

Please refer to significant events after the balance date in the following section for additional information regarding the consolidated entity’s debt facilities.

hedges for 4,000 tonnes (677 tonnes per month from February 2021 to July 2021) through a Zero Net Premium Option Collar, where Aeris buys puts and sells call options to form a collar structure with zero premium payable:

ᵒ The strike price of the put options is A$10,000/t; and
ᵒ The strike price of the call options is A$11,100/t.

Revenue for the year ended 30 June 2021 is presented net of realised hedging losses of $18.2 million (2020: $nil).

Equity placement

Sale of Yandan Gold Exploration Project

Gold and Copper Hedging

Aeris entered into unsecured gold and copper hedging arrangements with Macquarie Bank Limited early in the financial year ended 30 June 2021 and undertook further copper hedging in February 2021.

Gold hedging

36,000 ounces (3,000 ounces per month from July 2020 to June 2021), at A$2,536.25/oz.

Copper hedging

Two tranches of copper hedging were undertaken:

The first tranche was for 9,000 tonnes (1,500 tonnes per month from August 2020 to January 2021) at A$9,096.80/t;
The second tranche was for 5,000 tonnes (833 tonnes per month from February 2021 to July 2021) at A$9,228/t; and
In February 2021, the Company entered into further

Operating Review

Tritton Copper Operations

During the year ended 30 June 2021, the Tritton Copper Operations produced 22,987 tonnes of copper at an AISC of A$3.70/lb, achieving both production and cost guidance.

Annual Report 2021

Ore processed during the period was 1,557,803 tonnes. Copper recovery for the period of 93.72%

Exploration

The Tritton tenement package covers 2,160km[2] in central western New South Wales. To date over 750,000 tonnes of copper, including the current Mineral Resource deposits, has been discovered within the southern half of the tenement package.

Following the completion of two regional airborne electromagnetic (AEM) surveys totalling 678 km[2] over a majority of the northern half of the tenement package, on-ground exploration has focused on activities over this area. The northern half of the tenement package, until recently, has not been subject to modern exploration and remains largely under- explored.

Constellation Deposit

The Constellation deposit is located approximately 45 kilometres north-east from the Tritton processing plant in central western New South Wales. The deposit was first detected via an airborne electromagnetic survey, with follow-up ground moving loop (MLTEM) surveying. The MLTEM survey verified the EM response represented a legitimate bedrock conductor. Two bedrock conductors were identified.

The first drill hole into the bedrock conductor was undertaken in November 2020 and was successful in intercepting copper mineralisation (19.95m @ 2.41% Cu). Since the initial drill hole, exploration activities have continued at the Constellation deposit with diamond drilling and RC drilling programs underway. By the end of the financial year there were three drill rigs operating at Constellation.

To date, 52 RC drill holes have been completed, the results from which have delineated an extensive nearsurface oxide and supergene copper horizon, which remains open to the south and west. The diamond drilling program has targeted the deeper copper sulphide mineralisation. Overall the drilling footprint has identified copper mineralistion over a strike of 300m and 850m down plunge. A downhole EM survey has identified two EM conductors that extend a further 300m beyond the deepest drill hole.

Drilling will continue into the next financial year with the aim to have an initial Mineral Resource in the second half FY2022.

Murrawombie Deposit

At the Murrawombie deposit, an underground diamond drilling program continued testing the Hanging Wall

(HW) lodes 111 to 115. A total of 13 resource delineation drill holes were completed within the quarter. Drilling increased the down plunge and strike length extents, particularly for lodes 112, 113 and 115.

Mineralisation within the HW lodes remains open down plunge and along strike to the north.

Tritton - Budgerygar Corridor

Diamond drilling commenced at the Budgerygar deposit, with two underground drill rigs completing sterilisation and resource definition drilling. The drill program targeted the upper portion of the Budgerygar deposit between 5,200mRL to 5,000mRL. By the end of the financial year a total of 45 drill holes had been completed. Resource definition drilling has targeted a nominal 40m x 40m drill spacing, appropriate for conversion to an Indicated Mineral Resource category. Geologically, the additional drill hole data supports the current geological interpretation of multiple stacked copper sulphide bodies. There is some additional faulting and dislocation of the mineralised systems which is typical for these deposit types as the drill density increases.

Cracow Gold Operations

Cracow produced 73,685 ounces of gold at an AISC of A$1,483/oz during the financial year ended 30 June 2021, achieving production guidance and bettering cost guidance. Mining activities during the financial year were focussed on improving development and backfilling rates and testing the limits of mining capacity.

A new long-term plan is being developed. It is expected that grade variation will occur from time to time as extending mine life is balanced against short-run high production grades. Previously, the strategy for the mine had been to optimise the mine plan to maximise near-term gold grades. Aeris’ strategy since acquiring Cracow has been to find the economic balance on gold grade versus mine life extension through maximising extraction of the Mineral Resource whilst exploring aggressively to find new deposits.

The processing team actively worked towards debottlenecking both the crushing circuit and the processing plant, with the goal of increasing mill throughput. The mill achieved a number of throughput tonnage records during the financial year including achieving an all-time high monthly processing record in May 2021 of 57,100 tonnes.

Aeris Resources

The operations team have demonstrated that the processing plant can operate at an annual throughput rate in excess of 600,000 tonnes, exceeding the previous assumed limit of 570,000 tonnes per annum.

Roses Pride Deeps Surface Drilling

Previous underground mining at Roses Pride is located within the “upper mineralised panel”, a favourable stratigraphic sequence within the Western Field. The underlying volcaniclastic stratigraphic sequence referred to as the ‘FoD’ has historically not been considered prospective. Recent stratigraphic re-interpretation across the Western Field has provided a greater understanding of the lateral extent, thickness and lithological facies variations within each unit, including the FoD.

Tailings Dam Project

During the 2021 financial year, the Aeris Board approved the construction of a new multi-stage tailings storage facility at Cracow (TSF No.2). Cracow is currently discharging tailings into Tailing Storage Facility No.1 (TSF No.1), which has reached its maximum allowable construction height.

Civil construction activities commenced late in December 2020. As at 30 June 2021, the construction was substantially complete and commissioning is targeted to occur in early August.

Establishing a multi-stage tailings storage facility with a capacity greater than 5 years supports our investment thesis that Mineral Resource development at the Cracow mine and exploration of the tenement package would extend mine life.

Exploration

Since Aeris took ownership of the Cracow Gold Operations at the beginning of July 2020, one of the key focuses has been mine life extension. The Company had budgeted to spend $13 million on exploration activities over the first two years of ownership, on both greenfields and brownfields exploration but has recently upgraded this to $19 million, with $13 million budgeted in FY2022.

Key exploration activities undertaken during the half year included:

Roses Pride Deeps drilling from surface;
Roses Pride Mineral Resource update;
Klondyke – Royal Mineral Resource update; and
Drilling of underground near-mine targets.

Drill holes were designed to test for lateral continuity of a potentially favourable stratigraphic unit (a coherent intermediate intrusive) located within the FoD at the intersection with the interpreted down dip continuation of the Roses Pride mineralised structure. The drill holes intersected the favourable coherent unit within the FoD stratigraphic domain. At the interpreted position of the Roses Pride mineralised structure a subtle fault with weak quartz veining was intersected. Due to the poor volume of epithermal quartz veining, these intersections are not considered prospective. In spite of this, the general target concept remains prospective. Further drilling will be considered along the newly identified stratigraphic horizon within the FoD, further along strike (north). The intent of such drilling would be to test for sites of increased epithermal vein volume, in response to greater dilation along the Roses Pride mineralised structure. During the last quarter of the financial year a surface RC drill program commenced at the Roses Pride deposit. The resource definition drill program is designed to complete infill drilling surrounding the previous drill campaign conducted in the prior year, which led to the increase in the reported Mineral Resource at Roses Pride.

Roses Pride Mineral Resource Update

An updated Mineral Resource estimate for the Roses Pride deposit was completed during the financial year (refer to ASX Announcement “Roses Pride Mineral Resource Update” dated 6th January 2021). The updated Mineral Resource represents a 260% increase in total contained gold ounces compared to the previously reported Mineral Resource (December 2019). The updated Mineral Resource contains 177,000 tonnes at 4.6 grams per tonne gold for 26.1 thousand ounces of gold.

The updated Mineral Resource is based on a combination of additional drilling data and an alternate reporting schema.

Annual Report 2021

Klondyke-Royal Mineral Resource Update

The Klondyke and Royal deposits are high grade shoots which form along the same mineralised structure. An RC drill program, totaling 23 drill holes, was undertaken. The drill program was designed to infill around existing drill hole data above the higher grade Klondyke deposit and test the extents of mineralisation along the structure between the two deposits.

As a result of the drill program, the Mineral Resource was increased by 324% to 341kt @ 3.6g/t, for contained gold of 39.5koz (see ASX announcement “Significant increase to Klondyke-Royal Mineral Resource” dated 22 April 2021).

Underground near-mine targets

A detailed geological review, defining additional drill targets surrounding underground infrastructure was completed during November 2020. The review identified a significant number of targets in proximity to current underground workings.

A second drill rig arrived onsite and commenced drilling on 8 January 2021 to accelerate drill testing of the near mine targets, in-conjunction with infill grade control drilling. A third drill rig will be added during FY2022. Of the $13 million exploration budget for FY2022, $9 million is targeted at resource definition drilling around the underground workings.

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Financial Review

Aeris has two operational assets, the Tritton Copper Operations (Tritton) in New South Wates and the Cracow Gold Operations (Cracow) in Queensland. The acquisition of Cracow was completed on 1 July 2020.

Reconciliation of profit before income tax to EBITDA and Adjusted EBITDA:

	2021	2020
	$'000	$'000
Proft/(loss) before income tax expense	61,240	(38,017)
Depreciation and amortisation	86,200	35,547
Finance costs EBITDA	11,631 159,071	8,361 5,891
Impairment of assets	-	23,127
Transaction expense	4,068	3,126
Loss on disposal of subsidiary	2,238	-
Net foreign exchange losses	(1,166)	3,027
Movement in fnancial assets at fair value through proft or loss Adjusted EBITDA	444 164,655	1,191 36,362

EBITDA and Adjusted EBITDA are non-IFRS earnings measures that do not have any standardised meaning prescribed by IFRS and therefore may not be comparable to EBITDA presented by other companies. These measures, which are unaudited, are important to management as an additional way to evaluate the consolidated entity's performance.

Financial Results

Revenue from contracts with customers was $431.290 million, compared to $227.313 million for the previous corresponding period. This reflects the following two factors:

Aeris Resources

ᵒ Revenue from the Tritton Copper Operations was favourably impacted by higher copper prices received (A$10,413/t including the impact of hedging) compared to the prior corresponding period (A$8,300/t). These higher copper prices were offset by lower copper production of 22,987 tonnes compared to 25,041 for the prior corresponding period.
ᵒ The recognition of $186.681 million in revenue from the Cracow Gold Operations, resulting from production of 73,685 ounces of gold and a gold price received of A$2,508 per ounce including the impact of hedging.
Cost of goods sold increased to $337.895 million from $217.303 million for the previous corresponding period, with costs at both operations being in line with plan;
Foreign exchange impacts, mainly on foreign exchange movements on interest bearing liabilities and US dollar denominated receivables resulted in a gain of $1.166 million for the year ended 30 June 2021 (a loss of $3.027 million for the year ended 30 June 2020). The AUD/USD exchange rate at 30 June 2021 was $0.7518 compared to $0.6848 at 30 June 2020;
Transaction costs of $4.068 million were recognised for the year ended 30 June 2021 in relation to the acquisition of the Cracow Gold Operations (30 June 2020: $3.126 million);
A loss of $2.238 million was recognised in relation to the sale of the Yandan Gold Exploration Project and the associated subsidiary; and
A loss of $0.444 million was recognised for the year ended 30 June 2021 (30 June 2020: $1.191 million) in relation a movement in the fair value of the investment in Australian listed equity, held at fair value through the profit or loss.

Financial Position

At 30 June 2021, the consolidated entity had a positive net asset position of $183.864 million (30 June 2020: $73.649 million).

The 30 June 2021 net asset position for the consolidated entity was impacted by a number of key factors, including:

The acquisition of the Cracow Gold Operations. Please refer to note 31 of the financial statements for additional information regarding the impact of this acquisition on the financial position of the consolidated entity;
The successful completion in June 2021 of a $50.4 million equity raising by way of an Institutional Placement;
During the year ended 30 June 2021, the following repayments were made on the debt facilities provided bySpecial Portfolio Opportunity IV (SPOV) (a subsidiary of a fund managed by PAG):
ᵒ US$3.5 million in early repayments on the Tranche A (Working Capital) Facility. There was US$20.25 million outstanding on this facility as at 30 June 2021. Please refer to the page 63 for additional details regarding the repayment of the remaining balance of this facility in July 2021;
ᵒ US$11 million in repayments on the Tranche B (Term Loan) Facility. This facility was fully repaid at 30 June 2021.
ᵒ Full repayment by 30 June 2021 of the A$30 million Tranche C (Acquisition Bridging) Facility which was provided by SPOV to assist funding the acquisition of Cracow.

COVID-19 Impact

Annual Report 2021

Significant Events After The Balance Date

The hedges cover the period August 2021 to June 2022 in scheduled monthly deliveries of 550 tonnes (6,050 tonnes in total).

Other events

No other matter or circumstance has arisen in the interval between the end of the financial year and the dates of this report that has significantly affected or may significantly affect the operations of the consolidated entity; the results of those operations; or the state of affairs of the consolidated entity in subsequent financial years.

Likely Developments And Expected Results

Copper production guidance at Tritton Copper Operations for the year ending 30 June 2022 is 21,000 to 22,000 tonnes at an AISC of between A$3.95/lb and A$4.30/lb.

Gold production guidance for the year ending 30 June 2022 at Cracow Gold Operations is 67,000 to 71,000 ounces at an AISC of between A$1,550/oz and A$1,600/oz.

Dividend

The Directors have not recommended payment of a dividend for the year to 30 June 2021. No dividend was paid during the current year.

Environmental Regulations

The Company's operations are subject to various Commonwealth and State environmental regulations governing the protection of the environment in areas ranging from air and water quality, waste emissions and disposal, environmental impact assessments, mine rehabilitation and access to, and use of ground water and/or surface water. In particular, some operations are required to conduct certain activities under the environmental protection legislation with development consents of the jurisdiction in which they operate. The Directors are not aware of any material breaches of the Company’s licences and all mining and exploration activities have been undertaken in compliance with the relevant environmental regulations.

Shares Under Option

Executive management options (Options) issued were approved by shareholders at an Extraordinary General Meeting (EGM) held on 15 December 2015. The number of Options granted on 15 December 2015 totalled 93,410,609 at a $nil exercise price and have a remaining contractual life of 0.5 years. The were no additional shares issued under option nor any shares under option cancelled at 30 June 2021.

Shares Issued On The Exercise Of Options

46,182,202 ordinary shares of the Company were issued during the twelve months to 30 June 2021 on the exercise of Options. Please refer to page 76 of the Remuneration Report for additional information.

Directors' And Officers' Insurance And Indemnity

The Constitution of the Company provides that the Company may indemnify each Officer (including Secretaries) and Director against any liability, loss, damage, cost or expense incurred by the Officer or Director in or arising out of the conduct of any activity of the Company.

In accordance with the Company’s Constitution, the Company has entered into Deeds of Indemnity, Access and Insurance with each of the Directors and Officers of the Company.

Aeris Resources

The Company has paid a premium and other charges for a Directors and Officers Liability insurance policy for the benefit of the Directors and Officers of the consolidated entity. The policy prohibits the disclosure of the nature of the liabilities insured and the amount of premium paid.

Loans To Directors

No loans have been provided by the Company to Directors.

Proceedings On Behalf Of The Company

No proceedings have been brought or intervened on behalf of the Company with leave of the Court under section 237 of the Corporations Act 2001 during the year ended 30 June 2021 or at the date of this report.

Indemnity Of Auditors

Aeris Resources Limited has agreed to indemnify their auditors, PricewaterhouseCoopers, to the extent permitted by law, against any claim by a third party arising from Aeris’ breach of their agreement. The indemnity stipulates that Aeris Resources Limited will meet the full amount of any such liabilities including a reasonable amount of legal costs.

Non-Audit Services

The Company may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor’s experience and expertise with the Company and/or consolidated entity are important.

Details of the amounts paid or payable to the external auditor (PricewaterhouseCoopers) for audit and nonaudit services provided during the financial year are set out in Note 26 to the accounts.

The Board of Directors has considered the position and, in accordance with the advice received from the Audit Committee, is satisfied that the provision of the nonaudit services is compatible with the general standard of independence of auditors imposed by the Corporations Act 2001. The Directors are satisfied the provision of non-audit services by the auditor, as set out in Note 26 to the accounts, did not compromise the auditor independence requirements of the Corporations Act 2001 for the following reasons:

All non-audit services have been reviewed by the Audit Committee to ensure they do not impact the impartiality and objectivity of the auditor; and
None of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants, including reviewing or auditing the auditor’s own work, acting in a management or decision-making capacity for the Company, acting as advocate for the Company or jointly sharing economic risk and rewards.

A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 79.

Rounding Of Amounts To Nearest Thousand Dollars

The Company is of a kind referred to in Legislative Instrument 2016/191 issued by the Australian Securities and Investments Commission, relating to the rounding off of amounts in the Directors’ Report and Financial Report. Amounts in the Directors’ Report and Financial Report have been rounded off to the nearest thousand dollars in accordance with that Legislative Instrument.

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Annual Report 2021

Letter from the Remuneration Committee Chairman

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Dear shareholder,

On behalf of the Board, I am pleased to present the Remuneration Report for the financial year ended 30 June 2021 (FY2021), outlining the nature and amount of remuneration for Aeris Resources Limited’s Non-executive Directors and other Key Management Personnel.

The last 12 months have been an exciting period for Aeris Resources. Against the backdrop of a global pandemic, we have continued to prioritise the health and safety of our employees, whilst striving to perform and achieve some significant milestones. The acquisition and integration of the Cracow Gold Operations during FY2021 has enabled Aeris Resources to grow into a multi-mine, diversified mining company.

It is in this context that we have focused on reviewing the remuneration framework and have implemented changes which we believe are for the benefit of all stakeholders in the Company. These changes ensure

we remain competitive in our remuneration practices and create a strong alignment between executive performance and value creation for shareholders. In developing this Remuneration Report, we have also placed emphasis on meeting statutory requirements, to ensure we remain transparent with our shareholders so they can continue to make informed judgements in relation to the resolution of adopting the Remuneration Report at Annual General Meetings (AGM’s). We strive to continuously improve on our policies and practices as the Company evolves over time.

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Mr Michele Muscillo Independent Non-executive Director Chair of the Remuneration Committee

Aeris Resources

Remuneration Report

The Directors are pleased to present your Company’s 2021 Remuneration Report which sets out remuneration information for Aeris Resources Limited’s Non-executive Directors, Executive Directors and other Key Management Personnel (‘KMP’).

Persons addressed and scope of the remuneration report

KMP are the Non-executive Directors, Executive Directors and senior executive employees who have authority and responsibility for planning, directing and controlling the activities of the Company. KMP of the Company during the year ended 30 June 2021 and any changes that occurred during the year are set out below:

Position

Name

Remuneration governance

The following outlines the aspects of remuneration governance relevant to KMP remuneration.

Remuneration principles

In establishing a reward framework that ensures executive rewards reflect achievement, with the aim of delivering long- term shareholder value, the Board ensures that the Company’s remuneration policy:

Recognises the calibre and skills of executives and ensures they are rewarded for superior performance;
Creates a strong link between performance and reward over the short and long term;
Maintains fair, consistent and equitable remuneration practices in alignment with the Company values and vision whilst remaining competitive with the market to attract the best potential candidates;
Retains executives through the cyclical nature of commodity prices and different development stages of assets and;

Non-executive Directors

Mr Michele Muscillo	Non-executive Director
Mr Alastair Morrison	Non-executive Director
Mr Colin Moorhead	Non-executive Director (appointed 27July2020)
Mr Marcus Derwin	Non-executive Director (resigned 27July2020)

Executive Director

Executive Director
Mr Andre Labuschagne	Executive Chairman
Other KMP
Mr Robert Brainsbury	Chief Financial Offcer and
Mr Ian Sheppard	Joint CompanySecretary Chief OperatingOffcer
Ms Kim Franks	Chief People Offcer
	(appointed 4January2021)

Allows flexibility in remuneration structure to adjust to changing economic conditions to ensure that executive remuneration is linked to the creation of shareholder value.

Transparency and Engagement

To remain transparent and consistent with industry standards whilst maintaining fair and equitable remuneration practices, the Company seeks guidance in the governance of remuneration strategy from a variety of sources, including:

Shareholders;
External remuneration consultants; and
Internal management.

Annual Report 2021

Remuneration Committee

As the Board is comprised of four Directors, the Board considered it more effective to set aside time at Board meetings to specifically address the matters that would have been ordinarily attended to by the Remuneration

Committee. As such, a separate Remuneration Committee did not meet during the year ended 30 June 2021. Where required, the three other members of the board meet separately to discuss matters pertaining to the remuneration of the Executive Chairman.

KMP remuneration at a glance

Executive remuneration framework overview

A regularbase reward to attract and retain talent executive KMP.
Total Fixed A regularbase reward to attract and retain talent executive KMP.
Remuneration • Includes (where applicable) base salary, superannuation, and other benefits such as coverage for death (TFR) and total & permanent incapacity and salary continuance insurance.
At-risk component to Total Remuneration Package that incentivises superior executive performance in
Short Term areas of specific challenge to dive successful execution of business plans and achievement of strategic
Incentives aims directly aligned with enhanced shareholder value.
(STI) • Annual cash reward paid after the end of the financial year dependant on the extent that key performance measures are achieved, which are set by the Board each year.
At-risk component to Total Remuneration Package that aims to align the remuneration of employees with
Long Term drivers of sustainable, long-term company growth and shareholder value creation. It also promotes the
Incentives retention of key talent.
(LTI) • The annual grant of Performance Rights vest after 3 years, dependant n the extent that key performance measures are achieved, and the executive remaining employed by the Company. Key performance measures include share price growth, copper and gold reserves and total shareholder return.

Executive KMP remuneration is earned over multiple periods, as illustrated below:

Year 1 Year 2 Year 3 Fixed Remuneration STI LTI

For the 2021 financial year, the proportions of remuneration for executive KMP that are fixed and those that are linked to performance are as follows:

linked to performance are as follows:
		TFR	STI	LTI
Executive Chairman	55%	26%		19%
Chief Operating Offcer	57%	25%		18%
Chief Financial Offcer	55%	27%		18%
Chief People Offcer	61%	32%		7%

Aeris Resources

Remuneration Framework

FY2021 executive remuneration framework changes

The key changes made to the variable remuneration framework for executive KMP during the year are outlined below:

STI PLAN Feature Rationale Increased opportunity Establishes market from a maximum of 30% competitiveness amongst to a maximum of 50% of peers and incentivises base salary. participants to drive the achievement of strategic goals.

Addition of a financial Ensures that the Company ‘gateway’ that must possesses the means to be achieved for an STI meet its primary financial payment to be awarded obligations before any in the relevant period. awards are paid out to executive KMP.

A new equity incentive scheme was approved by shareholders at the Annual General Meeting on 26 November 2020.

Executive remuneration

Total Fixed Remuneration

Fixed remuneration provides a regular base reward to attract and retain talented executive KMP and reflects the job size, role, responsibilities and professional competence of each executive according to their knowledge, experience and accountabilities. An executive KMP’s fixed remuneration could include any or all of the following:

Base salary;
Superannuation;
Coverage for death and total & permanent (TPD) incapacity; and
Salary continuance insurance.

Fixed remuneration is reviewed annually, and any adjustments are approved by the Board after recommendation by the Remuneration Committee. External remuneration data is obtained prior to recommendations being made to ensure that fixed remuneration is in line with general industry and community standards.

Variable Remuneration

LTI PLAN Feature Rationale Changed from using a plan Implementing an LTI plan with long dated options (i.e. that is aligned with the vesting over a 5 year period recent developments of continuous employment), and growth of the a 1-year service condition Company. Awards under and no performance the LTI plan are based on conditions to using a plan meeting multiple ‘at risk” with Performance Rights performance conditions, with a 3-year performance which are measured over period and various 3-year period. It creates performance conditions. a strong alignment with the long-term success and sustainable growth of the Company, promoting the creation of value for shareholders.

The Company’s remuneration philosophy recognises the importance of ‘at-risk’ or variable pay as an integral component of total potential reward, so the Remuneration Committee has established distinct STI and LTI Plans to strongly link executive remuneration to individual and Company performance and to the creation of value for shareholders.

The remuneration report includes comparative disclosures for FY2020 relating to the previous STI Plan. The Company introduced an amended STI plan in FY2021, details of which are provided below. The Board reviews and assesses the achievement of applicable performance targets, business performance and individual performance to determine the award of a STI payment at the end of the financial year.

Annual Report 2021

Short Term Incentives (STI)

Previous STI plan Performance measures	The Remuneration Committee oversees the identifcation of appropriate performance measures, setting of goals and endorsement of specifc targets for the senior executive team and ensures that these elements clearly refect the factors deemed critical to the Company’s strategic and business plans for the relevant year.
Opportunity	The STI opportunity for executives is equivalent to 30% of their base (excluding superannuation) remuneration unless increased at the Board’s discretion.
Delivery	Awards for performance under the STI Plan will be determined and paid only after the end of the fnancial year (generally in the frst quarter after the end of the reporting period), once the relevant actual performance results are fnalised. The Remuneration Committee retains the discretion to adjust STI awards in exceptional circumstances, including determining that no award will be paid.
Confguration for FY2020	Establishment ofgoals
	For each STI Plan cycle the Remuneration Committee oversee the identifcation of appropriate performance measures, setting of goals and endorsement of specifc targets for each member of the senior executive team. The Remuneration Committee ensures that these elements clearly refect the factors deemed critical to the Company’s strategic and business plans for the relevant year.
	Determination of STI outcomes
	At the end of a performance cycle the Remuneration Committee determines the award of STI’s to the senior executive team based on assessed performance relative to the goals established. The Remuneration Committee retains the discretion to adjust STI awards in exceptional circumstances, includingdeterminingthat no award will be paid.

Determination of STI outcomes At the end of a performance cycle the Remuneration Committee determines the award of STI’s to the senior executive team based on assessed performance relative to the goals established. The Remuneration Committee retains the discretion to adjust STI awards in exceptional circumstances, includingdeterminingthat no award will be paid.	Determination of STI outcomes At the end of a performance cycle the Remuneration Committee determines the award of STI’s to the senior executive team based on assessed performance relative to the goals established. The Remuneration Committee retains the discretion to adjust STI awards in exceptional circumstances, includingdeterminingthat no award will be paid.
Short Term Incentives (STI)
Current STI plan
Purpose	To incentivise eligible employee performance in areas of specifc challenge by ensuring
	targets are competitive to drive successful execution of business plans and achievement of
	strategic aims directlyaligned with enhanced shareholder value.
Performance measures	The Remuneration Committee oversees the identifcation of appropriate performance
	measures, setting of goals and endorsement of specifc targets for each executive KMP and
	ensures that these elements clearly refect the factors deemed critical to the consolidated
	entity’s strategic and business plans for the relevant year.
Opportunity	The maximum STI opportunity for executive KMP is equivalent to 50% of their base
	(excluding superannuation) remuneration. The maximum STI opportunity for other eligible
	employees is between 10% and 40%.
Delivery	Awards for performance under the STI Plan are determined and paid only after the end of the
	fnancial year (generally in the frst quarter after the end of the reporting period), once the
	relevant actual performance results are fnalised. The Remuneration Committee retains the
	discretion to adjust STI awards in exceptional circumstances, including determining that no
	award will be paid.
Gateway	The Company will determine a ‘gateway’ that must be achieved for an STI payment to be
	awarded in the relevant period and will consider the overall Company and site proft position,
	capacity to pay and other relevant factors.
Confguration for	For FY2021 the following list outlines examples of what were used to determine
FY2021	STI outcomes:
	• Stakeholder Management • Growth
	• Life of Mine extensions • Balance sheet optimisation
	• Innovation • Individual performance

Aeris Resources

The Remuneration Report includes comparative disclosures for FY2020 relating to the previous LTI Plan. The Company introduced a new LTI Plan (Plan) for FY2021 which is provided by way of Performance Rights, details of which are provided below.

Long Term Incentives (LTI)

Previous LTI Plan – Options

Timing and Delivery

Executive Management Options (Options) were approved by shareholders at an Extraordinary General Meeting (EGM) held on 15 December 2015 and was introduced to incentivise the KMP at that time to implement the Company’s turnaround strategy. Upon vesting, the shares are subject to a period of voluntary escrow, with the shares being released from escrow in progressive tranches from 31 December 2018.

The Options vest in five tranches as follows:

Tranche 1 - 30.0% on 31 December 2016;
Tranche 2 - 17.5% on 31 December 2017;
• Tranche 3 - 17.5% on 31 December 2018; • Tranche 4 - 17.5% on 31 December 2019; and • Tranche 5 - 17.5% on 31 December 2020.

Exercise price When exercised, each Option is convertible into one ordinary share for a $nil exercise price and will be issued within 10 business days after the Company receives an exercise notice. Termination/expiry Options that have not been exercised will expire 6 years after the issue date (31 December 2021), or termination date, whichever is earlier. To the extent that the options have not previously vested, they will be deemed to have been immediately vested upon a Change of Control Event.

Long Term Incentives (LTI)

Current LTI Plan – Performance Rights

Purpose To align the remuneration of eligible employees with the drivers of sustainable, long-term Company growth and shareholder value creation. Opportunity The maximum LTI opportunity for executive KMP is equivalent to 75% of their Base Salary. The maximum LTI for other eligible employees is between 30% and 50%. Timing and Delivery Grants are made annually following the end of the financial year and are delivered in the form of Performance Rights. Allocation The grant is determined using a Volume Weighted Average Price (VWAP) calculated over 5 business days ending on the date prior to the commencement of the financial year. Measurement period The performance measures are tested on a cummulative basis over a period of 3 years.

Performance measures The performance measures are illustrated below:

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Relative TSR Share Price
25% 25%
Copper Reserves Gold Reserves
25% 25%
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Annual Report 2021

Vesting Scales

Relative Total Shareholder Return (TSR): The type of relative TSR used is ranked TSR, which is a method of calculating the return shareholders would earn if they held a notional number of shares over a period of time, measured against a relevant peer group based on an agreed VWAP at the relative measure points. The number of Performance Rights allocated to TSR that will vest is determined in accordance with the below vesting scale:

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TSR ranking against comparator group Level of vesting
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Equal to or above 75thpercentile	100%
Above the 50th percentile and below the	Pro-rata vesting on a straight line basis
75thpercentile	between 50% and 100%
At the 50thpercentile	50%
Less than the 50th percentile	Nil

The relevant peer group for FY2021 includes Aurelia Metals Limited, Red 5 Limited, Red River Resources Limited, Metals X Limited, Dacian Gold Limited and Pantoro Limited. The Board reviews the relevant peer group annually and makes amendments as it deems appropriate.

Share price: The number of Performance Rights allocated to Share Price Increase that will vest is determined in accordance with the below vesting scale:

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Share price increase Level of vesting
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Greater than 50%	100%
Between 30% and 50%	Pro-rata vestingbetween 75% and 100%
Between 10% and 30%	Pro-rata vestingbetween 50% and 75%
Less than 10%	Nil

Gold reserves: The number of Performance Rights allocated to Gold Ounces Reserve Increase that will vest is determined in accordance with the below vesting scale:

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Gold ore reserve growth Level of vesting
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Depletion replacement plus greater than	100%
10% increase
Between depletion replaced and up to and	Pro-rata vesting between 50% and 100%
including10% increase
Depletion replaced	50%
Negative growth	Nil

Copper reserves: The number of Performance Rights allocated to Copper Tonnes Reserve Increase that will vest is determined in accordance with the below vesting scale:

Copper ore reserve growth	Level of vesting
Depletion replacement plus greater than	100%
10% increase
Between depletion replaced and up to and	Pro-rata vesting between 50% and 100%
including10% increase
Depletion replaced	50%
Negative growth Nil	Nil

Vesting	If at the completion of the 3-year performance period the required vesting conditions are met, the
	Performance Rights will usually vest in the quarter following the end of the fnancial year. Once
	Performance Rights have vested, they will automatically be exercised and ‘convert’ to shares at which
	time they will have no restrictions and will not expire. Shares will be delivered at no cost to participants.
Treatment on	Leaving the Company before the completion of the performance period will result in the participant
termination	forfeiting the Performance Rights, subject to the Plan rules.
Dividends	The Award carries no voting or dividend entitlements prior to vesting.

Aeris Resources

No Hedging on LTI Grants

The Company does not permit employees to enter into contracts to hedge their exposure to Performance Shares granted as part of their remuneration package.

Non-executive Director remuneration

Fees and payments to Directors and Non-executive Directors reflect the demands which are made on, and the responsibilities of the Directors. The Board reviews Non-executive Directors’ fees and payments annually. The Executive Chairman is not present at any discussions relating to determination of his own remuneration.

The Board does not pay additional fees to Directors or Non-executive Directors appointed to Committees, nor are fees paid to executives who are appointed to the Board of subsidiary or associated companies. Non-executive Directors’ fees are determined within an aggregate Non-executive Directors’ fee pool limit, which is currently $700,000 per annum.

Non-executive Directors are not eligible to participate in the Company’s incentive plans. For the financial year 2021, the Non-executive Director fee was $80,000 inclusive of statutory superannuation. In the prior year the Non-executive Director fee was $60,000 per annum inclusive of statutory superannuation. From 1 July 2021, in order to remain competitive with market and to ensure we continue to attract and retain suitably experienced Directors, the Non- executive Director fee will be $80,000 plus statutory superannuation.

Company performance and remuneration outcomes

Aeris’ remuneration framework aims to create a strong link between Company performance and executive reward in the short, medium and long term. The following table and graph presents a summary of Aeris’ business performance as measured by a range of financial indicators:

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Year ended 30 June 2021 $’000 2020 $’000 2019 $’000 2018 $’000 2017 $’000
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Sales revenue	431,290	227,313	232,338	236,017	168,098
EBITDA	159,071	5,891	31,573	104,985	14,595
Proft/(loss) after income tax	61,240	(38,351)	(12,673)	55,304	(33,299)
Cash from operating activities	169,650	30,238	35,626	50,518	19,069
Closing Share Price (cents)	19.5	3.3	6.6	14.1	3.5

AIS Monthly Average Share Price and Trading Volumes

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Trading Volume
Average Monthly Price
650 0.25
600
550
0.20
500
450
400 0.15
350
300
250 0.10
200
150
0.05
100
50
0 0.00
Jul-19Aug-19Sep-19Oct-19Nov-19Dec-19Jan-20Feb-20Mar-20Apr-20May-20Jun-20Jul-20Aug-20Sep-20Oct-20Noc-20Dec-20Jan-21Feb-21Mar-21Apr-21May-21Jun-21Jul-21
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Annual Report 2021

Details of the short-term incentive cash bonuses awarded as remuneration following the end of the financial year to KMP are set out below (amounts

paid during the reporting period in relation to FY2020 performance are disclosed in the KMP remuneration table on page 75):

Executive KMP	Total STIP Granted1 $	Maximum Entitlement Granted %	% of Maximum Entitlement Forfeited $
Andre Labuschagne	339,150	96.9	3.1%
Robert Brainsbury	229,500	100	-
Ian Sheppard	229,500	91.8	8.2%
Kim Franks2	92,400	100	-

STIP disclosed is exclusive of superannuation. Where superannuation caps have been exceeded the superannuation on STIP was paid a cash allowance. 2. Appointed 4 January 2021.

Employment agreements

Executive KMP

The major provisions of the contracts of the Directors and KMP are set out below.

Non-executive Directors

Non-executive Directors are retained by way of a Letter of Appointment. The Letter of Appointment does not contemplate a fixed term for directors’ appointments. Non-executive Directors are not eligible for termination payments.

Remuneration and other terms of employment of the Executive Director and other executive KMP are formalised in common law employment contracts in the form of a letter of appointment.

In determining remuneration for executive KMP, the Company takes into account the responsibilities of the role and relevant industry data for attracting persons of the calibre and experience of the person in question. Fixed pay is reviewed annually, with such review taking into account a range of factors including performance and experience of the individual and Company performance.

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Termination
Incumbent & Position TFR [1] Contract Duration Notice Period
Provisions
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Andre Labuschagne, Executive Chairman	Fixed1$770,000 Other2$10,267	No fxed term	3 months	Additional 9 months payment of annual base salary
Robert Brainsbury, Chief Financial Offcer and Co- Company Secretary	Fixed1$495,000 Other2$10,565	No fxed term	3 months	Additional 6 months payment of annual base salary
Ian Sheppard, Chief Operating Offcer	Fixed1 $550,000 Other2 $16,434	No fxed term	3 months	Additional 6 months payment of annual base salary
Kim Franks, Chief People Offcer	Fixed1 $385,440 Other2 $1,024	No fxed term	3 months	Additional 6 months payment of annual base salary-

*TFR as set for the financial year 30 June 2021

Fixed includes the base salary and superannuation at 10%. Where superannuation caps have been exceeded, the superannuation component of the TFR that exceeds the cap was paid as a cash allowance.
Other relates to death, TPD and salary continuance insurance paid by the Company on behalf of the KMP. At the option of the employee this benefit is able to be reimbursed via an insurance allowance.

Aeris Resources

Details of remuneration

Details of the remuneration of the KMP of the consolidated entity are set out in the following tables.

KMP Remuneration for the year ended 30 June 2021

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Post- Long-term Share based
Short-Term Benefits employment
Superannuation benefits payments
Salary & fees Short-term incentive Other Superannuation Sub-total Long service leave settledEquity TOTAL
(A) (B) (C) (D) (E) (F)
DIRECTORS $ $ $ $ $ $ $ $
NON-EXECUTIVE
Michele Muscillo 80,000 - - - 80,000 - - 80,000
Alastair Morrison 80,000 - - - 80,000 - - 80,000
Colin Moorhead [1] 74,000 - - - 74,000 - - 74,000
234,000 - - - 234,000 - - 234,000
EXECUTIVE
Andre Labuschagne ^ 700,000 339,150 173,246 25,000 1,237,396 18,819 266,338 1,522,553
934,000 339,150 173,246 25,000 1,471,396 18,819 226,338 1,756,553
OTHER KMP
Robert Brainsbury 450,000 229,500 80,145 25,000 784,645 5,211 166,119 955,975
Ian Sheppard 500,000 229,500 83,325 25,000 837,825 14,452 176,647 1,028,924
Kim Franks [2] 174,570 92,400 30,487 12,500 309,957 3,431 21,199 334,587
1,124,570 551,400 193,957 62,500 1,932,427 23,094 363,965 2,319,486
2,058,570 890,550 367,203 87,500 3,403,823 41,913 630,303 4,076,039
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Notes to tables:

Appointed 27 July 2020.
Appointed 4 January 2021

(A) Includes cash salary and Directors’ fees.

(B) Short-term incentives reflect incentives accrued in relation to the 30 June 2021 financial year.

superannuation cash allowance not able to be paid into

superannuation due to exceeding the superannuation cap and

movement in annual leave provision. At the option of the employee, the insurance benefit is able to be reimbursed via an insurance allowance.

(D) Superannuation paid to meet the superannuation guarantee contribution.

(E) Movement in long service entitlement provision for the financial year.

(F) Share based payments comprise the grant date fair value of

options and performance rights expensed during the year.

Annual Report 2021

KMP remuneration for the year ended 30 June 2020

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Short-Term Benefits
Post-
Short-term Share based
Salary & fees incentive Other employment Sub-total payments TOTAL
Superannuation
(A) (B) (C) (D) (E)
DIRECTORS $ $ $ $ $ $ $
NON-EXECUTIVE
Michele Muscillo 60,000 - - - 60,000 - 60,000
Alastair Morrison 60,000 - - - 60,000 - 60,000
Marcus Derwin 60,000 - - - 60,000 - 60,000
180,000 - - - 180,000 - 180,000
EXECUTIVE
Andre Labuschagne 550,025 275,012 7,212 25,000 857,249 250,299 1,107,548
730,025 275,012 7,212 25,000 1,037,249 250,299 1,287,548
OTHER KMP
Robert Brainsbury 377,517 188,759 6,009 25,000 597,285 150,180 747,465
Ian Sheppard 377,517 188,759 8,637 25,000 599,913 150,180 750,093
John Miller [1] 373,944 65,440 13,215 11,384 463,983 75,090 539,073
1,128,978 442,958 27,861 61,384 1,661,181 375,450 2,036,631
1,859,003 717,970 35,073 86,384 2,698,430 625,749 3,324,179
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Notes to tables:

No longer deemed KMP from 1 July 2020.

(A) Includes cash salary and Directors’ fees.

(B) Short-term incentives reflect incentives accrued in relation to the 30 June 2020 financial year.

(D) Superannuation paid to meet the superannuation guarantee contribution.

(E) Share based payment comprise the grant date fair value of options expensed during the year.

by the Company on behalf of the KMP. At the option of the

employee, this benefit is able to be reimbursed via an insurance

allowance.

Aeris Resources

Share-based compensation

Details of Options and Rights over ordinary shares in the

Company as at 30 June 2021, provided as remuneration to each executive KMP of Aeris Resources Limited are set out below. Upon satisfaction of relevant conditions each Option/Right will automatically vest and convert into one ordinary share.

Options

See Variable Remuneration – Previous LTI Plan for the terms governing the grant of the Options outlined below.

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Name Year of options Number Value at Vested [2] Number of Options Number of Options
Granted issued Grant Date exercised during exercised since 30
the year ended 30
June 2021
$ % June 2021
Andre Labuschagne 2016 37,364,244 1,264,780 100% 14,852,285 22,511,959
Robert Brainsbury 2016 22,418,546 758,868 100% 8,911,371 -
Ian Sheppard 2016 22,418,546 758,868 100% 22,418,546 -
John Miller [1] 2016 11,209,273 379,434 100% - -
93,410,609 3,161,950 100% 46,182,202 22,511,959
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No longer deemed KMP from 1 July 2021.
No options were cancelled at 30 June 2021.

The value of the options on a fully marketable basis is equal to the value of the underlying share price (on grant date) less dividend ($0.04). The shares, if converted from options, are subject to various escrow periods and as such a discount for lack of marketability has been applied to take into consideration the escrow period. A discount for lack of marketability of 25%, 20%, 15% and 10% was applied to Tranche 1($0.03), Tranche 2($0.032), Tranche 3($0.034) and Tranche 4 ($0.036) respectively.

Rights

See Variable Remuneration – Current LTI Plan for the terms governing the grants of Rights outlined below. The minimum value of the Rights yet to vest is nil, as the Rights will lapse if the vesting conditions are not met. The maximum value in future periods has been determined as the amount of the grant date fair value of the Right that is yet to be expensed.

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Number
Year Value at Number of
Name of options Vested Cancelled
Granted Grant Date Rights vested
issued
$ % %
Andre Labuschagne 2021 7,142,857 525,000 n/a n/a n/a
Robert Brainsbury 2021 4,591,836 337,500 n/a n/a n/a
Ian Sheppard 2021 5,102,040 375,000 n/a n/a n/a
Kim Franks [1] 2021 1,751,635 128,745 n/a n/a n/a
18,588,368 1,366,245 - - -
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Appointed 4 January 2021

Annual Report 2021

Shares held by KMP

The tables below show the equity instruments in Aeris Resources Limited that were held during the financial

year by KMP of the consolidated entity, including their close family members and entities related to them:

Executive KMP

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Opening Disposed/
Issued and Vested and Balance 30
Name balance 1 July Forfeited/
Acquired Exercised June 2021
2020 Other
Andre Labuschagne 140,000 - 14,852,285 - 14,992,285
Robert Brainsbury 434,999 - 8,911,371 - 9,346,370
Ian Sheppard 33,234 - 22,418,546 (10,333,643) 12,118,137
Kim Franks - - - 86,000 [1] 86,000
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Holding on appointment on 4 January 2021

Non-executive Directors

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Opening Disposed/
Issued and Vested and Balance 30
Name balance 1 July Forfeited/
Acquired Exercised June 2021
2020 Other
Michele Muscillo 21,739 - - - 21,739
Alaistair Morrison 175,000 853,500 - - 1,028,500
Colin Moorhead [1] - 500,000 - - 500,000
Marcus Derwin [2] 183,500 - - (183,500) -
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Appointed 27 July 2020
Resigned 27 July 2020

Aeris Resources

Other matters

Employee Share Acquisition Plan (ESAP)

The Aeris Resources Limited Employee Share Acquisition Plan (ESAP) was approved by shareholders at the Demerger Scheme Meeting on 21 January 2011. The plan operates by allowing participants to obtain Shares in the Company at market price, which are funded by a limited recourse interest free loan provided by the Company. The Shares are held in trust with vesting of the Shares subject to performance hurdles. If vesting conditions are satisfied, the Shares continue to be held in trust subject to a holding lock until the underlying loan is repaid in full. There are currently no Shares issued or allocated under the ESAP Share Plan.

Loans given to Key Management Personnel

No loans have been provided by the Company to KMP.

Other transactions between the Company and Key Management Personnel or their related parties

Except for those transactions disclosed in note 29 to the financial statements, no other transactions have been entered into between the Company and KMP.

Voting and comments made at the Company's 26 November 2020 Annual General Meeting ('AGM')

At the 26 November 2020 AGM, 98.96% of the votes received supported the adoption of the remuneration report for the year ended 30 June 2020. The Company did not receive any specific feedback at the AGM regarding its remuneration practices.

Use of remuneration consultants

During the year ended 30 June 2021, the Remuneration Committee of Aeris Resources Limited engaged the services of PricewaterhouseCoopers as external remuneration consultants to aid in the drafting of the revised LTI plan for executive KMP. The Company also engaged the services of Godfrey Remuneration Group Pty Ltd to provide assistance in drafting the 2021 Remuneration Report. No recommendations as defined by the Corporations Act Section 300A have been provided by either company.

The information provided in this remuneration report has been audited as required by section 308(3C) of the Corporations Act 2001.

Signed in accordance with a resolution of the Directors.

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Andre Labuschagne Executive Chairman Brisbane 26 August 2021

Annual Report 2021

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Auditor’s Independence Declaration

As lead auditor for the audit of Aeris Resources Limited for the year ended 30 June 2021, I declare that to the best of my knowledge and belief, there have been:

(a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and

(b) no contraventions of any applicable code of professional conduct in relation to the audit.

This declaration is in respect of Aeris Resources Limited and the entities it controlled during the period.

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Simon Neill Partner PricewaterhouseCoopers

Brisbane 26 August 2021

Liability limited by a scheme approved under Professional Standards Legislation.

PricewaterhouseCoopers, ABN 52 780 433 757 480 Queen Street, BRISBANE QLD 4000, GPO Box 150, BRISBANE QLD 4001 T: +61 7 3257 5000, F: +61 7 3257 5999, www.pwc.com.au

Aeris Resources

Financial Report

Annual Report 2021

Aeris Resources Limited
Contents
30 June 2021
Consolidated statement of comprehensive income	82
Consolidated statement of financial position	83
Consolidated statement of changes in equity	84
Consolidated statement of cash flows	85
Notes to the consolidated financial statements	86
Directors' declaration	134
Independent auditor's report to the members of Aeris Resources Limited	135

General information

The consolidated financial statements cover Aeris Resources Limited as a consolidated entity, consisting of Aeris Resources Limited ('Aeris', ‘Company’ or ‘parent entity’) and the entities it controlled at the end of, or during, the year. Aeris Resources Limited and its subsidiaries together are referred to in these financial statements as the ‘consolidated entity’. The financial statements are presented in Australian dollars, which is Aeris Resources Limited's functional and presentation currency.

Aeris Resources Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of business is:

HQ South Tower, Suite 2.2, Level 2 520 Wickham Street Fortitude Valley Brisbane QLD 4006

A description of the nature of the consolidated entity's operations and its principal activities are included in the directors' report, which is not part of the financial statements.

The financial statements were authorised for issue, in accordance with a resolution of directors, on 26 August 2021. The directors have the power to amend and reissue the financial statements.

Aeris Resources

Aeris Resources Limited

Consolidated statement of comprehensive income For the year ended 30 June 2021

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Note Revenue from contracts with customers 2 Cost of goods sold 3 Gross profit Administration and support 3 Exploration expense 3 Net foreign exchange gains/(losses) Transaction expense 3 Other expenses 3 Impairment loss 3 Profit/(loss) before net finance costs Net finance costs 3 Profit/(loss) before income tax expense Income tax expense 4 Profit/(loss) after income tax expense for the year attributable to the owners of Aeris Resources Limited Other comprehensive income Items that may be reclassified subsequently to profit or loss Cash flow hedges transferred to profit or loss, net of tax 21 Transfer to profit or loss on disposal of subsidiary Other comprehensive income for the year, net of tax Total comprehensive income for the year attributable to the owners of Aeris Resources Limited Basic earnings per share 38 Diluted earnings per share 38	2021 $'000 431,290 (337,895)	2020 $'000 227,313 (217,303)
	93,395	10,010
	(14,475) (454) 1,166 (4,068) (2,693) -	(8,420) (575) (3,027) (3,126) (1,391) (23,127)
	72,871 (11,631)	(29,656) (8,361)
	61,240 -	(38,017) (334)
	61,240 (2,549) 162	(38,351) - -
	(2,387)	-
	58,853	(38,351)
	Cents 3.2 3.1	Cents (7.4) (7.4)

The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes

Annual Report 2021

Aeris Resources Limited

Consolidated statement of financial position As at 30 June 2021

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Note Assets Current assets Cash and cash equivalents 5 Trade and other receivables 6 Inventories 7 Financial assets at fair value through profit or loss 8 Other current assets 9 Total current assets Non-current assets Trade and other receivables 6 Property, plant and equipment 10 Exploration and evaluation 11 Mine properties 12 Deferred tax 4 Total non-current assets Total assets Liabilities Current liabilities Trade and other payables 13 Borrowings 14 Lease liabilities 15 Derivative financial instruments 16 Provisions 17 Other liabilities 18 Total current liabilities Non-current liabilities Borrowings 14 Lease liabilities 15 Provisions 17 Other liabilities 18 Total non-current liabilities Total liabilities Net assets Equity Issued capital 19 Prepaid capital 20 Reserves 21 Accumulated losses Total equity	2021 $'000 97,396 12,341 32,414 6,087 1,935	2020 $'000 54,303 17,394 11,202 2,531 748
	150,173	86,178
	20,776 85,296 51,818 65,095 1,092	17,262 41,851 28,083 14,394 -
	224,077	101,590
	374,250	187,768
	68,949 2,115 4,025 3,641 17,913 14,144	37,756 61 3,565 - 7,924 -
	110,787	49,306
	25,277 4,244 29,660 20,418	48,957 3,582 12,274 -
	79,599	64,813
	190,386	114,119
	183,864	73,649
	509,888 - (7,481) (318,543)	452,313 7,216 (6,097) (379,783)
	183,864	73,649

The above consolidated statement of financial position should be read in conjunction with the accompanying notes

Aeris Resources

Aeris Resources Limited Consolidated statement of changes in equity For the year ended 30 June 2021

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Issued capital $'000 420,837 - -	Prepaid capital $'000 - - -	Convertible preference shares $'000 4,208 - -	Reserves $'000 (6,723) - -	Accumulated losses $'000 (341,432) (38,351) -	Total equity $'000 76,890 (38,351) -
- 27,268 4,208 - -	- - - 7,216 -	- - (4,208) - -	- - - - 626	(38,351) - - - -	(38,351) 27,268 - 7,216 626
452,313	7,216	-	(6,097)	(379,783)	73,649
Issued capital $'000 452,313 - -	Prepaid capital $'000 7,216 - -	Convertible preference shares $'000 - - -	Reserves $'000 (6,097) - (2,387)	Accumulated losses $'000 (379,783) 61,240 -	Total equity $'000 73,649 61,240 (2,387)
- 57,575 -	- (7,216) -	- - -	(2,387) - 1,003	61,240 - -	58,853 50,359 1,003
509,888	-	-	(7,481)	(318,543)	183,864

The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes

Annual Report 2021

Aeris Resources Limited Consolidated statement of cash flows For the year ended 30 June 2021

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Note Cash flows from operating activities Receipts from customers Payments to suppliers and employees Interest and other finance costs paid Net cash from operating activities 37 Cash flows from investing activities Payment for purchase of business, net of cash acquired 31 Payments for investments Payments for property, plant and equipment and mine properties Payments for exploration expenditure Cash backed security deposits Proceeds from disposal of property, plant and equipment and mine properties Net cash used in investing activities Cash flows from financing activities Proceeds from issue of shares - net of transaction costs Prepaid proceeds from the issue of shares Proceeds from borrowings Repayment of borrowings Repayment of leasing liabilities Net cash from financing activities Net increase in cash and cash equivalents Cash and cash equivalents at the beginning of the financial year Effects of exchange rate changes on cash and cash equivalents Cash and cash equivalents at the end of the financial year 5	2021 $'000 434,879 (257,443)	2020 $'000 210,679 (178,870)
	177,436 (7,786)	31,809 (1,571)
	169,650	30,238
	(55,789) (1,000) (80,477) (7,449) (8,714) 3	- - (18,642) (1,723) (5,561) 41
	(153,426)	(25,885)
	50,359 - 30,000 (48,933) (4,422)	26,536 7,216 - (56) (6,141)
	27,004	27,555
	43,228 54,303 (135)	31,908 22,548 (153)
	97,396	54,303

The above consolidated statement of cash flows should be read in conjunction with the accompanying notes

Aeris Resources

Aeris Resources Limited Notes to the consolidated financial statements 30 June 2021

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1. Operating segments

Identification of reportable operating segments

The Company's Strategic Steering Committee, consisting of the Chief Executive Officer, the Chief Financial Officer, the Chief Operating Officer and the Chief People Officer has identified three reportable segments:

Tritton Copper Operations (Tritton) in New South Wales;
Cracow Gold Operations (Cracow) in Queensland; and
Other, representing corporate activities, investments in listed entities and non-core exploration assets.

There is no aggregation of operating segments.

The consolidated entity operated only in Australia during the periods ended 30 June 2021 and 30 June 2020.

The Strategic Steering Committee (Chief Operating Decision Makers) of Aeris Resources Limited assesses the performance of the operating segments based on a measure of adjusted earnings before interest, tax, depreciation and amortisation (Adjusted EBITDA). This measurement basis excludes the effects of non-cash and/or non-recurring expenditure from operating segment EBITDA, such as impairment loss, transaction expense, movement in assets at fair value through profit or loss, and the effects of foreign exchange which primarily reflects gains or losses on the translation of US dollar denominated receivables and borrowings.

The information reported to the Strategic Steering Committee is on a monthly basis.

Operating segment information

Tritton $'000 244,216 362	Cracow $'000 186,652 29	Other $'000 - 31	Total $'000 430,868 422
244,578	186,681	31	431,290
75,288	98,079	(8,712)	164,655 (86,200) (2,238) (11,631) (4,068) 1,166 (444)
148,860	141,270	84,120
			61,240 -
			61,240
			374,250
47,126	44,607	1,709	374,250
			93,442
94,117	82,475	13,794	190,386
			190,386

Annual Report 2021

Aeris Resources Limited Notes to the consolidated financial statements 30 June 2021

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1. Operating segments (continued)

Tritton operations $'000 226,326 681	Other $'000 - 306	Total $'000 226,326 987
227,007	306	227,313
39,484	(3,122)	36,362 (35,547) (23,127) (8,361) (3,126) (3,027) (1,191)
127,468	60,300
		(38,017) (334)
		(38,351)
		187,768
22,725	3,173	187,768
		25,898
105,969	8,150	114,119
		114,119

Intersegment transactions

Intersegment transactions were made at market rates and are eliminated on consolidation.

Intersegment receivables, payables and loans

Intersegment loans are initially recognised at the consideration received. Intersegment loans receivable and loans payable that earn or incur non-market interest are not adjusted to fair value based on market interest rates. Intersegment loans are eliminated on consolidation.

Major customers

During the year ended 30 June 2021 approximately 59% (2020: 100%) of the consolidated entity's external revenue was derived from sales to one customer who has the offtake agreement for 100% of the Tritton Copper Operation's copper concentrate; and 41% was derived from sales to one customer with whom the Company has a refining agreement for the Cracow Gold Operations gold-silver doré.

Accounting policy for operating segments

Operating segments are presented using the "management approach", where the information presented is on the same basis as the internal reports provided to the Chief Operating Decision Makers ('CODM'). The CODM is responsible for the allocation of resources to operating segments and assessing their performance.

Aeris Resources

Aeris Resources Limited Notes to the consolidated financial statements 30 June 2021

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2. Revenue from contracts with customers

Revenue from contracts with customers

Revenue from contracts with customers
Sales revenue from mining activities Other revenue from ordinary activities	2021 $'000 430,868 422	2020 $'000 226,326 987
	431,290	227,313

Accounting policy for revenue recognition

Revenue from contracts with customers

The consolidated entity generates sales revenue primarily from the performance obligation to deliver goods such as copper concentrate and gold doré to the customer. Sales revenue represents the gross proceeds receivable from the customer.

Copper concentrate sales

For copper concentrate sales, the recognition of concentrate sales occurs when the performance obligation, being the transfer of the title of copper concentrate, is met and control of the goods transfers to the customer.

Concentrate sales are initially recognised at an estimated sales value when the control of the product transfers to the customer, which in most cases is when the Holding and Title certificate is issued at the port handling and ship loading facility.

The terms of the concentrate sales contracts with our offtake agreement partner contains provisional pricing arrangements whereby the final selling price for the concentrate is based on prevailing average monthly prices on a specified future period after shipment to the customer (quotation period). Adjustments to the sales price occur based on movements in quoted marked prices up to the final settlement price specified in the sales contracts. The period between provisional invoicing and the final settlement pricing is typically one to three months. Revenue on provisionally priced sales is recognised based on the estimated fair value of the total consideration receivable.

The change in value of the provisionally priced receivable is based on relevant forward market prices and is included in sales revenue. Adjustments are made for variations in the metal prices, assays, weights and currency between the time control passed to the customer and the time of final invoice being issued. Mining royalties payable are presented as an operating cost.

The contract with customer has no significant financing component and has no variable consideration under AASB 15 Revenue from Contracts with Customers . A trade receivable is recognised (refer note 6 and note 23) when the Holding and Title Certificate is issued as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.

Shipping is generally arranged by the customer and occurs after the control of goods transfers to the customer.

Gold doré sales

For gold doré sales, revenue is recognised at the point when the doré is collected by the buyer at the mine site.

The contract with customer has no significant financing component and has no variable consideration under AASB 15 Revenue from Contracts with Customers . A trade receivable is recognised (refer note 6 and note 23) when the buyer takes possession of the gold doré as this is the point in time that the consideration is unconditional. Mining royalties payable are presented as an operating cost.

Gains and losses on hedge instruments related to sales contracts are recorded in revenue when the associated instrument matures.

Annual Report 2021

Aeris Resources Limited Notes to the consolidated financial statements 30 June 2021

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2. Revenue from contracts with customers (continued)

Other revenue

Other revenue is recognised when it is received or when the right to receive payment is established.

Interest

Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial asset.

3. Expenses

Profit/(Loss) before income tax includes the following specific expenses:

*Cost of goods sold* Cost of production: Mining activities Depreciation: Plant and equipment Plant and equipment under leases Total depreciation Amortisation: Mine properties Total cost of goods sold *Administration and support* Corporate depreciation Corporate lease depreciation Other corporate expenses Total administration and support *Exploration expense* Exploration expenditure *Transaction expense* Legal expenses Consulting expense Stamp duty Other expenses Total transaction expense	2021 $'000 252,002	2020 $'000 181,957
	23,451 2,790	10,655 6,234
	26,241	16,889
	59,652	18,457
	337,895	217,303
	80 227 14,168	5 196 8,219
	14,475	8,420
	454	575
	176 145 3,747 -	543 2,525 - 58
	4,068	3,126

Aeris Resources

Aeris Resources Limited Notes to the consolidated financial statements

30 June 2021

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3. Expenses (continued)

*Other expenses* Movement in financial assets at fair value through profit or loss Loss on disposal and write-off of fixed assets Loss on disposal of subsidiary (note 36) Total other expenses *Impairment loss* Impairment of mine properties *Net finance costs* Interest expense for borrowings at amortised cost Interest expense for leasing arrangements Other net interest and finance charges Unwinding of discounts on provisions Total net finance costs Included within the above functional classifications are the following:	2021 $'000 444 11 2,238	2020 $'000 1,191 200 -
	2,693	1,391
	-	23,127
	7,364 525 2,025 1,717	5,609 718 1,547 487
	11,631	8,361

Employee benefit expenses Superannuation expense	2021 $'000 88,482 7,775	2020 $'000 45,064 4,072
	96,257	49,136

	2021	2020
	$'000	$'000
Employee benefit expenses	88,482	45,064
Superannuation expense	7,775	4,072
	96,257	49,136

Annual Report 2021

Aeris Resources Limited

Notes to the consolidated financial statements 30 June 2021

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4. Income tax

4. Income tax
*Income tax expense* Deferred tax - origination and reversal of temporary differences Adjustment recognised for prior periods Aggregate income tax expense *Numerical reconciliation of income tax expense and tax at the statutory rate* Profit/(loss) before income tax expense Tax at the statutory tax rate of 30% Tax effect amounts which are not deductible/(taxable) in calculating taxable income: Share-based payments Equity raising and transaction costs Other Adjustment recognised for prior periods Current year tax losses not recognised Current year temporary differences not recognised Utilisation of prior year tax losses Income tax expense	2021 $'000 - -	2020 $'000 35 299
	-	334
	61,240	(38,017)
	18,372 301 697 1,502	(11,405) 188 - -
	20,872 - - (2,721) (18,151)	(11,217) 299 5,638 5,614 -
	-	334

Amounts recognised directly in equity

Deferred tax arising in the reporting year and not recognised in net profit or loss or other comprehensive income but directly debited or credited to equity:

Cash flow hedges Share issue costs *Tax losses* Tax losses not recognised: Unused tax losses for which no deferred tax asset has been recognised Potential tax benefit @ 30%	2021 $'000 1,092 -	2020 $'000 - 731
	1,092	731
	2021 $'000 218,734	2020 $'000 279,008
	65,620	83,702

The above potential tax benefit for tax losses has not been recognised in the consolidated statement of financial position.

Aeris Resources

Aeris Resources Limited Notes to the consolidated financial statements 30 June 2021

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4. Income tax (continued)

Deferred tax balances

Opening balance $'000 1,575 1,751 6,845 1,295	Net charged to comprehen- sive income $'000 3,342 313 5,182 (8)	Net credited to equity $'000 - - - 1,092	Closing balance $'000 4,917 2,064 12,027 2,379
11,466	8,829	1,092	21,387
(2,217) (9,249) -	(2,372) (3,411) (3,046)	- - -	(4,589) (12,660) (3,046)
(11,466)	(8,829)	-	(20,295)
-	-	1,092	1,092
Opening balance $'000 2,044 1,231 6,845 274	Net charged to comprehen- sive income $'000 (469) (211) - 1,021	Net credited to equity $'000 - 731 - -	Closing balance $'000 1,575 1,751 6,845 1,295
10,394	341	731	11,466
(2,060) (8,731)	(157) (518)	- -	(2,217) (9,249)
(10,791)	(675)	-	(11,466)
(397)	(334)	731	-

Accounting policy for income tax

The income tax expense or benefit for the period is the tax payable on that period's taxable income based on the applicable income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities attributable to temporary differences, unused tax losses and the adjustment recognised for prior periods, where applicable.

Annual Report 2021

Aeris Resources Limited Notes to the consolidated financial statements 30 June 2021

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4. Income tax (continued)

Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied when the assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted, except for:

When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting nor taxable profits; or
When the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures, and the timing of the reversal can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred tax assets recognised are reduced to the extent that it is no longer probable that future taxable profits will be available for the carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to the extent that it is probable that there are future taxable profits available to recover the asset.

Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets against current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable authority on either the same taxable entity or different taxable entities which intend to settle simultaneously.

Aeris Resources Limited (the 'head entity') and its wholly-owned Australian subsidiaries have formed an income tax consolidated group under the tax consolidation regime. The head entity and each subsidiary in the tax consolidated group continue to account for their own current and deferred tax amounts. The tax consolidated group has applied the 'separate taxpayer within group' approach in determining the appropriate amount of taxes to allocate to members of the tax consolidated group.

In addition to its own current and deferred tax amounts, the head entity also recognises the current tax liabilities (or assets) and the deferred tax assets arising from unused tax losses and unused tax credits assumed from each subsidiary in the tax consolidated group.

5. Cash and cash equivalents

5. Cash and cash equivalents
	2021	2020
	$'000	$'000
Current assets
Cash at bank	97,396	54,303

Accounting policy for cash and cash equivalents

Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

Aeris Resources

Aeris Resources Limited Notes to the consolidated financial statements 30 June 2021

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6. Trade and other receivables

Current assets Trade receivables Other receivables Non-current assets Restricted cash	2021 $'000 9,208 3,133	2020 $'000 15,867 1,527
	12,341	17,394
	20,776	17,262
	33,117	34,656

Other receivables is primarily composed of receivables in relation to Australian GST refund claims and security deposits held.

Restricted cash relates to cash held on deposit for security against bank guarantees held in relation to environmental bonding. Refer to note 27 for additional detail. The carrying amount of the restricted cash balance equates to its fair value.

Refer to note 23 for information about the impairment of trade receivables and the consolidated entity’s exposure to credit risk, foreign currency risk and interest rate risk.

Accounting policy for trade and other receivables

Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of business. They are generally due for settlement within 30 to 120 days and therefore are all classified as current. Trade receivables are recognised initially at fair value based on estimated amounts due and subsequently at amortised cost, less any provision for impairment. The consolidated entity holds the trade receivables with the objective to collect the contractual cash flows and therefore measures them subsequently at amortised cost using the effective interest method. For the commodity sales where pricing remains outstanding at the period end, the final consideration will be estimated in terms of AASB 9 Financial Instruments at the period end based on forward market prices for the relevant quotational period as there is a developed forward market. Details about the consolidated entity’s impairment policies and the calculation of any loss allowance are provided in note 23.

Other receivables are recognised at amortised cost, less any allowance for expected credit losses.

7. Inventories

Current assets Production supplies - at cost Work in progress - at cost	2021 $'000 14,987 17,427	2020 $'000 7,392 3,810
	32,414	11,202

Annual Report 2021

Aeris Resources Limited Notes to the consolidated financial statements 30 June 2021

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7. Inventories (continued)

Accounting policy for inventories

Mining inventories of raw materials and stores, work in progress and finished goods are stated at the lower of cost and net realisable value. Cost comprises direct materials, direct labour and an appropriate proportion of variable and fixed overhead expenditure, the latter being allocated on the basis of normal operating capacity. Costs are assigned to individual items of inventory on the basis of weighted average costs. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.

Inventory charged to the consolidated statement of comprehensive income has been included in note 3 as part of mining activities.

8. Financial assets at fair value through profit or loss

8. Financial assets at fair value through profit or loss
Current assets Australian listed equity - designated at fair value through profit or loss Reconciliation Reconciliation of the fair values at the beginning and end of the current and previous financial year are set out below: Opening fair value Additions Revaluation decrements Closing fair value	2021 $'000 6,087	2020 $'000 2,531
	2,531 4,000 (444)	3,722 - (1,191)
	6,087	2,531

Refer to note 23 for further information about the consolidated entity's exposure to price risk.

Refer to note 24 for further information on fair value measurement.

9. Other current assets

9. Other current assets
	2021	2020
	$'000	$'000
Current assets
Prepayments	1,935	748

Aeris Resources

Aeris Resources Limited Notes to the consolidated financial statements 30 June 2021

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10. Property, plant and equipment

10. Property, plant and equipment
Non-current assets Freehold land - at cost Buildings - at cost Less: Accumulated depreciation Plant and equipment - at cost Less: Accumulated depreciation Property, plant and equipment under lease Less: Accumulated depreciation	2021 $'000 4,015	2020 $'000 1,324
	7,743 (5,191)	6,748 (4,412)
	2,552	2,336
	122,719 (50,070)	98,810 (64,165)
	72,649	34,645
	10,327 (4,247)	20,079 (16,533)
	6,080	3,546
	85,296	41,851

Reconciliations

Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:

Balance at 1 July 2019 Additions Net disposals/write-offs Transfers to mine properties Transfers in/(out) Depreciation expense Balance at 30 June 2020 Additions Additions through business combinations (note 31) Net disposals/write-offs Transfers to exploration assets Transfers in/(out) Depreciation expense Balance at 30 June 2021	Freehold land $'000 1,324 - - - - -	Buildings $'000 3,136 - - - - (800)	Plant and equipment $'000 35,720 8,304 (101) (171) 754 (9,861)	Property, plant and equipment under lease $'000 10,489 410 (170) - (754) (6,429)	Total $'000 50,669 8,714 (271) (171) - (17,090)
	1,324 - 2,693 (2) - - -	2,336 - 1,878 (10) - - (1,652)	34,645 39,631 19,569 (2) (36) 722 (21,880)	3,546 6,272 - - - (722) (3,016)	41,851 45,903 24,140 (14) (36) - (26,548)
	4,015	2,552	72,649	6,080	85,296

Annual Report 2021

Aeris Resources Limited Notes to the consolidated financial statements 30 June 2021

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10. Property, plant and equipment (continued)

Assets in the course of construction

The carrying amounts of the assets disclosed above include assets that were in the course of construction as at the end of the reporting period. The relevant amounts are as follows:

Plant and equipment	2021 $'000 32,530	2020 $'000 6,531

Refer to note 14 for information on non-current assets pledged as security by the consolidated entity.

Accounting policy for property, plant and equipment

Property, plant and equipment is carried at cost less accumulated depreciation and impairment. Cost equals the fair value of the item at acquisition date, and includes expenditure that is directly attributable to the acquisition of the items. The cost of an item of property, plant and equipment also includes the initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located.

Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the consolidated entity and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance are charged to the consolidated statement of comprehensive income during the reporting period in which they are incurred.

Depreciation of plant and equipment is calculated using either the straight line or units-of-production method to allocate their cost, net of residual values, over their estimated useful lives. Estimated useful lives are between 2 and 5 years. Freehold land is not depreciated.

The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting year.

An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the consolidated statement of comprehensive income.

11. Exploration and evaluation

Non-current assets Exploration and evaluation - at cost	2021 $'000 51,818	2020 $'000 28,083

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11. Exploration and evaluation (continued)

Reconciliations

Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:

out below:
Balance at 1 July 2019 Expenditure during the year Balance at 30 June 2020 Additions through business combinations (note 31) Expenditure during the year Transfers from property, plant and equipment Balance at 30 June 2021	Exploration and evaluation $'000 26,360 1,723
	28,083 16,250 7,449 36
	51,818

Accounting policy for exploration and evaluation assets

Exploration and evaluation expenditure is carried forward in the financial statements, in respect of areas of interest for which the rights of tenure are current and where:

(i) Such costs are expected to be recouped through successful development and exploitation of the area of interest, or alternatively, by its sale; or
(ii) Exploration and/or evaluation activities in the area of interest have not yet reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable ore reserves and mineral resources and while active and significant operations in, or in relation to, the area are continuing.

Exploration expenditure incurred that does not satisfy the policy stated above is expensed in the year in which it is incurred. Exploration expenditure that has been capitalised which no longer satisfies the policy stated above is written off in the year in which that decision is made.

Upon commencement of mining activities, deferred exploration and development expenditure is reclassified to mine properties and then amortised in accordance with the accounting policy for mine properties.

The net carrying value of each area of interest is reviewed regularly and, to the extent to which this value exceeds its recoverable value, that excess is provided for or written off in the year in which this is determined.

12. Mine properties

Non-current assets Mine properties - at cost Less: Accumulated amortisation	2021 $'000 249,159 (184,064)	2020 $'000 138,927 (124,533)
	65,095	14,394

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12. Mine properties (continued)

Reconciliations

Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:

Balance at 1 July 2019 Expenditure during the year Impairment of assets Transfer from property, plant and equipment Amortisation expense Balance at 30 June 2020 Additions through business combinations (note 31) Expenditure during the year Increase to rehabilitation asset Amortisation expense Balance at 30 June 2021	Mine properties $'000 45,879 9,928 (23,127) 171 (18,457)
	14,394 62,971 40,118 7,264 (59,652)
	65,095

Impairment of non-financial assets

The consolidated entity considers annually whether there have been any indicators of impairment and tests whether or not non-current assets have suffered an impairment. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows which are largely independent of the cash flows from other assets or groups of assets.

This grouping of assets is referred to as a Cash Generating Unit (CGU). The consolidated entity currently assesses the Tritton Copper Operations and Cracow Gold Operations as two separate CGUs. The recoverable amount of each CGU has been determined based on fair value less costs of disposal (FVLCD). The FVLCD is calculated based on a Board approved life of mine plan (LOM).

This requires the use of estimates and judgements in relation to a range of inputs including:

Commodity prices;
Exchange prices;
Mineral Resources and Ore Reserves, and mining planning scheduling;
Production costs; and
Discount rates.

The impairment assessment of the Tritton Copper Operations CGU completed during the year ended 30 June 2020 resulted in an impairment of $23.127 million to mine properties. The discount rate used for the 30 June 2020 impairment assessment was a post-tax discount of 8.6% rate expressed in real terms. Commodity prices and exchange rates used in the model were sourced from independent reputable market sources.

There were no indicators of impairment identified and no impairment recognised during the year ended 30 June 2021 for either the Tritton Copper Operations CGU or Cracow Gold Operations CGU.

Accounting policy for mining assets

Mine properties represent the acquisition costs and/or accumulation of exploration, evaluation and development expenditure in respect of areas of interest in which mining has commenced.

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12. Mine properties (continued)

When further development expenditure is incurred in respect of a mine property after the commencement of production, such expenditure is carried forward as part of the mine property only when substantial future economic benefits are thereby established, otherwise such expenditure is classified as part of the cost of production.

Amortisation of mine properties is calculated using the units-of-production method which results in an amortisation charge proportional to the depletion of the anticipated remaining life of mine production. Each item's economic life has due regard to both its physical life limitations and to present assessments of economically recoverable Mineral Resources and Ore Reserves of the mine property at which it is located. The annual change in Mineral Resources and Ore Reserves driving the remaining life of mine production are accounted for prospectively when amortising existing mine development assets.

13. Trade and other payables

Current liabilities Trade payables Other payables	2021 $'000 68,424 525	2020 $'000 37,396 360
	68,949	37,756

Refer to note 23 for further information on financial instruments.

Accounting policy for trade and other payables

These amounts represent liabilities for goods and services provided to the consolidated entity prior to the end of the financial year, which are unpaid. The amounts are unsecured and are usually paid between 30 and 45 days of recognition. Trade and other payables are presented as current liabilities unless payment is not due within 12 months from the reporting date. They are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest method.

14. Borrowings

Current liabilities Secured: Loans Non-current liabilities Secured: Loans	2021 $'000 2,115	2020 $'000 61
	25,277	48,957
	27,392	49,018

Refer to note 23 for further information on financial instruments.

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14. Borrowings (continued)

Effective 1 July 2020, the terms of the consolidated entity's Senior Loan Note Subscription Agreement with Special Portfolio Opportunity V Limited (SPOV) were amended, resulting in the following changes:

Extension of the maturity dates for its Tranche A (Working Capital) and Tranche B (Term Loan) debt facilities to 1 July 2023 (previously 1 July 2021);
Quarterly loan amortisation payments of US$2.5 million on Tranche B, commencing 1 July 2021;
Quarterly loan amortisation payments of US$2.5 million on Tranche A, to commence after the repayment of Tranche B;
Establishment of the Tranche C (Acquisition Bridging) Facility for A$30 million to facilitate the acquisition of Cracow, with a maturity date of 1 July 2021 and quarterly loan amortisation payments of A$7.5 million commencing 1 October 2020; and
Establishment of a A$15 million Contingent Instrument Facility to be used for the replacement of financial assurances relating to Cracow.

The SPOV Tranche A Facility is a US dollar working capital facility that accrues cash interest at 5% per annum and PIK interest that accrues at 6% (compounding every 3 months). The consolidated entity made early repayments on this facility during the year ended 30 June 2021 of US$3.5 million. As at 30 June 2021 there was US$20.25 million outstanding on the facility, including US$8.25 million of capitalised interest.

The SPOV Tranche B Facility is a US dollar facility that accrued cash interest at a rate of 12.5% per annum. The consolidated entity made early repayments on this facility during the year ended 30 June 2021 of US$10 million. As at 30 June 2021, there was no outstanding balance on the SPOV Tranche B Facility.

The Tranche C Facility of A$30 million was drawn down on 1 July 2020 and accrued cash interest of 11% per annum. As at 30 June 2021, the consolidated entity had fully repaid the facility and there was no outstanding balance.

During June 2021, Aeris entered into an agreement with SPOV to re-profile its remaining facilities as follows:

Cash backing of the A$15 million Contingent Instrument Facility for environmental bonding obligations, which had an outstanding balance at 30 June 2021 of A$10 million, accelerated to be fully extinguished by March 2022, approximately 14 months ahead of the original schedule; and
Debt repayments on Tranche A during the year ending 30 June 2022 reduced from US$10 million (US$2.5 million per quarter) to a total of A$2 million, to be paid at the end of June 2022. The debt repayment profile for Tranche A for the year ending 30 June 2023 remained unchanged.

Please refer to note 35 for additional information regarding events after the report period in relation to the facilities disclosed above.

Total secured liabilities

The total secured liabilities are as follows:

Loans	2021 $'000 27,392	2020 $'000 49,018

Assets pledged as security

The carrying amount of non-current assets as at 30 June 2021 pledged as security for current and non-current borrowings and lease liabilities was $167,722,000 (2020: $70,560,000).

Credit stand-by arrangements

The consolidated entity has $20,776,000 (2020: $17,262,000) in restricted cash in respect of its obligations to provide environmental bonds over its mining and exploration licences.

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14. Borrowings (continued)

Financing arrangements

Unrestricted access was available at the reporting date to the following lines of credit:

Total facilities Loans Used at the reporting date Loans Unused at the reporting date Loans	2021 $'000 27,392	2020 $'000 49,018
	27,392	49,018
	-	-

Accounting policy for borrowings

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in the consolidated statement of comprehensive income over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility to which it relates.

Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in the consolidated statement of comprehensive income as other income or finance costs.

Borrowings are classified as current liabilities unless the consolidated entity has an unconditional right to defer settlement of the liability for at least 12 months after the end of the reporting year.

15. Lease liabilities

15. Lease liabilities
Current liabilities Lease liability Non-current liabilities Lease liability	2021 $'000 4,025	2020 $'000 3,565
	4,244	3,582
	8,269	7,147

The consolidated entity leases office premises and mobile equipment. Lease contracts are typically made for a fixed period of 2 to 5 years but may have extension options. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose any covenants other than the security interests in the leased assets that are held by the lessor.

The total cash outflow for leases, including interest, during the year ended 30 June 2021 was $4,947,000 (2020: $6,859,000).

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15. Lease liabilities (continued)

Refer to note 23 for further information on financial instruments.

Right-of-use assets

Balance at 1 July 2019 Adoption of AASB 16_Leases_ Additions Transfers in/(out) Net disposals/write-offs Depreciation expense Balance at 30 June 2020 Additions Transfers in/(out) Depreciation expense Balance at 30 June 2021	Property, plant and equipment $'000 10,212 277 410 (754) (170) (6,429)
	3,546
	6,272 (722) (3,016)
	6,080

Accounting policy for lease liabilities

A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present value of the lease payments to be made over the term of the lease, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the consolidated entity's incremental borrowing rate. Lease payments comprise of fixed payments less any lease incentives receivable, variable lease payments that depend on an index or a rate, amounts expected to be paid under residual value guarantees, exercise price of a purchase option when the exercise of the option is reasonably certain to occur, and any anticipated termination penalties. The variable lease payments that do not depend on an index or a rate are expensed in the period in which they are incurred.

Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured if there is a change in the following: future lease payments arising from a change in an index or a rate used; residual guarantee; lease term; certainty of a purchase option; and termination penalties. When a lease liability is remeasured, an adjustment is made to the corresponding right-of use asset, or to profit or loss if the carrying amount of the right-of-use asset is fully written down.

Accounting policy for right-of-use assets

A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the commencement date net of any lease incentives received, any initial direct costs incurred, and, except where included in the cost of inventories, an estimate of costs expected to be incurred for dismantling and removing the underlying asset, and restoring the site or asset.

Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful life of the asset, whichever is the shorter. Where the consolidated entity expects to obtain ownership of the leased asset at the end of the lease term, the depreciation is over its estimated useful life. Right-of use assets are subject to impairment or adjusted for any remeasurement of lease liabilities.

The consolidated entity has elected not to recognise a right-of-use asset and corresponding lease liability for short-term leases with terms of 12 months or less and leases of low-value assets. Lease payments on these assets are expensed to profit or loss as incurred.

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16. Derivative financial instruments

16. Derivative financial instruments
Current liabilities Commodity contracts - cash flow hedges Refer to note 23 for further information on financial instruments.	2021 $'000 3,641	2020 $'000 -

Refer to note 24 for further information on fair value measurement.

17. Provisions

Current liabilities Employee benefits Other Non-current liabilities Employee benefits Provision for rehabilitation and dismantling	2021 $'000 17,644 269	2020 $'000 7,767 157
	17,913	7,924
	752 28,908	489 11,785
	29,660	12,274
	47,573	20,198

Movements in provisions

Movements in each class of provision during the current financial year, other than employee benefits, are set out below:

2021 Carrying amount at the start of the year Additions through business combinations (note 31) Provisions recognised Amounts used Unwinding of discount Carrying amount at the end of the year	Provision for rehabilitation and dismantling $'000 11,785 9,725 7,283 - 115	Other $'000 157 - 269 (157) -
	28,908	269

Accounting policy for provisions

Provisions are recognised when the consolidated entity has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are not recognised for future operating losses.

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17. Provisions (continued)

Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.

Accounting policy for employee benefits

Short-term employee benefits

Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be settled wholly within 12 months of the reporting date are measured at the amounts expected to be paid when the liabilities are settled.

Other long-term employee benefits

The liability for annual leave and long service leave not expected to be settled within 12 months of the reporting date are measured at the present value of expected future payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the reporting date on high quality corporate bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.

Accounting policy for rehabilitation and dismantling

The consolidated entity has obligations to dismantle, remove, restore and rehabilitate certain items of property, plant and equipment. Under AASB 116 Property, Plant and Equipment , the cost of an item of property, plant and equipment includes the initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located, the obligation for which an entity incurs either when the item is acquired, or as a consequence of having used the item during a particular period.

AASB 137 Provisions, Contingent Liabilities, and Contingent Assets requires a provision to be raised for the present value of the estimated cost of settling the rehabilitation and restoration obligations existing at balance date. The estimated costs are discounted using a risk free discount rate that reflects the time value of money. The discount rate must not reflect risks for which future cash flow estimates have been adjusted. The increase in the provision due to the passage of time is recognised as interest expense.

18. Other liabilities

Deferred consideration $'000 - 13,337 807	2021 $'000 14,144	2020 $'000 -
	20,418	-
	34,562	-
	Contingent consideration $'000 - 19,623 795	Total $'000 - 32,960 1,602
14,144	20,418	34,562

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18. Other liabilities (continued)

Refer to note 31 for additional details regarding these liabilities

Refer to note 24 for further information on fair value measurement.

19. Issued capital

19. Issued capital
2021 Shares Ordinary shares - fully paid 2,207,352,758 *Movements in ordinary share capital* Details Date Balance 1 July 2019 Conversion of convertible preference shares (a) 8 April 2020 Share issued to fund cancellation of convertible preference shares (a) 8 April 2020 Placement (b) 15 June 2020 Entitlement Offer - Institutional (b) 15 June 2020 Institutional bookbuild (b) 15 June 2020 Less: Transaction costs arising on share issues Balance 30 June 2020 Entitlement offer - Retail (b) 1 July 2020 Management options exercised (c) 10 August 2020 Management options exercised (c) 12 August 2020 Management options exercised (c) 4 March 2021 Institutional placement (d) 18 June 2021 Less: Transaction costs arising on share issues Balance 30 June 2021	2021 Shares 2,207,352,758	2020 Shares 1,539,996,964	2021 $'000 509,888	2020 $'000 452,313
		Shares 455,711,613 83,665,000 1 244,337,606 272,069,601 484,213,143 - 1,539,996,964 333,258,016 8,911,371 14,852,285 22,418,546 287,915,576 - 2,207,352,758	Issue price $0.050 $0.000 $0.030 $0.030 $0.030 $0.000 $0.030 $0.000 $0.000 $0.000 $0.175 $0.000	$'000 420,837 4,208 - 7,330 8,162 14,526 (2,750)
				452,313 9,998 - - - 50,385 (2,808)
				509,888

Ordinary shares

Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the Company in proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the Company does not have a limited amount of authorised capital.

On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have one vote.

Movements in share capital

(a) Conversion and cancellation of convertible preference shares

On 2 April 2020, Aeris announced that Tudor Court Limited (TCL) had acquired 83,665,000 Convertible Redeemable Preference Shares (CPRS) in the Company from Standard Chartered Bank. On 8 April 2020, the 83,665,000 CPRS held by TCL were converted to fully paid ordinary shares, resulting in the issue of 83,665,000 new shares.

(b) Accelerated Renounceable Entitlement Offer and Placement

On 4 June 2020, the Company announced the launch of a fully underwritten $40.016 million Placement and 1:2.02 Renounceable Entitlement Offer (Entitlement Offer), with the proceeds raised used to fund:

A portion of the purchase price for the acquisition of 100% of the issued equity of Lion Mining Pty Ltd, owner and operator of the Cracow gold mine; and
The transaction costs associated with the Entitlement Offer and Placement and the acquisition.

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19. Issued capital (continued)

The $40.016 million Placement and Entitlement Offer, at a price of $0.03 per share, consisted of:

A Placement and Accelerated Institutional Entitlement Offer which was completed on 15 June 2020 and raised $30.018 million and resulted in the issue of 1,000,620,350 new shares; and
A Retail Entitlement Offer which closed on 1 July 2020 and raised $9.998 million with 333,258,016 new shares being issued. $7.216 million of the proceeds from the Retail Entitlement Offer were received prior to the 1 July 2020 issue of the related shares. These proceeds are recognised in the consolidated statement of financial position and consolidated statement of changes in equity as Prepaid Capital (refer note 20). The remainder of the proceeds were received on 1 July 2020.

(c) Management options

During the year ended 30 June 2021, 46,182,202 management options were exercised at $nil each. As at 30 June 2021, 47,228,407 management options remain outstanding, with an expiry date of 31 December 2021.

(d) Institutional placement

On 18 June 2021, Aeris issued 287,915,576 new ordinary fully paid shares to institutional and sophisticated investors at $0.175 per share.

Share buy-back

There is no current on-market share buy-back.

Capital risk management

The consolidated entity's objectives when managing capital is to safeguard its ability to continue as a going concern, so that it can provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to reduce the cost of capital.

Capital is regarded as total equity, as recognised in the consolidated statement of financial position, plus net debt. Net debt is calculated as total borrowings less cash and cash equivalents.

In order to maintain or adjust the capital structure, the consolidated entity may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

The consolidated entity would look to raise capital when an opportunity to invest in a business or company was seen as value adding relative to the Company's current share price at the time of the investment.

The consolidated entity is subject to certain financing arrangements covenants and meeting these is given priority in all capital risk management decisions. There have been no events of default on the financing arrangements during the financial year.

The capital risk management policy remains unchanged from the 2020 Annual Report.

The consolidated entity monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by total capital. Net debt in the table below is calculated as total borrowings (including "borrowings" and "lease liabilities" as shown in the consolidated statement of financial position) less "cash and cash equivalents" as shown in the consolidated statement of financial position. Total capital is calculated as "total equity" as shown in the consolidated statement of financial position (including non-controlling interest) plus net debt.

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19. Issued capital (continued)

The gearing ratio at the reporting date was as follows:

Current liabilities - borrowings (note 14) Current liabilities - lease liabilities (note 15) Non-current liabilities - borrowings (note 14) Non-current liabilities - lease liabilities (note 15) Total borrowings Current assets - cash and cash equivalents (note 5) Net debt/(Cash and cash equivalents, net of debt) Total equity Total capital Gearing ratio	2021 $'000 2,115 4,025 25,277 4,244	2020 $'000 61 3,565 48,957 3,582
	35,661 (97,396)	56,165 (54,303)
	(61,735) 183,864	1,862 73,649
	122,129	75,511
	(50.5%)	2.5%

Accounting policy for issued capital

Ordinary shares are classified as equity.

Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

20. Prepaid capital

Prepaid share capital	2021 $'000 -	2020 $'000 7,216

Prepaid capital at 30 June 2020 related to proceeds received in advance for the Retail Entitlement Offer, which closed on 1 July 2020 (refer to note 19). Upon the issue of the related shares on 1 July 2020, the proceeds converted to issued capital.

21. Reserves

Hedging reserve - cash flow hedges Share-based payments reserve Acquisition revaluation reserve	2021 $'000 (2,549) 4,349 (9,281)	2020 $'000 - 3,346 (9,443)
	(7,481)	(6,097)

– Hedging reserve cash flow hedges

The reserve is used to recognise the effective portion of the gain or loss of cash flow hedge instruments that is determined to be an effective hedge.

Share-based payments reserve

The reserve is used to recognise the value of equity benefits provided to employees and directors as part of their remuneration, and other parties as part of their compensation for services.

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21. Reserves (continued)

Acquisition revaluation reserve

This reserve is used to record the differences which may arise as a result of transactions with non-controlling interests that do not result in a loss of control. A change in ownership interest results in an adjustment between the carrying amounts of the controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any difference between the amount of the adjustment to non-controlling interests and any consideration paid or received are recognised in the acquisition revaluation reserve.

Movements in reserves

Movements in each class of reserve during the current and previous financial year are set out below:

Balance at 1 July 2019 Employee share based payments Balance at 30 June 2020 Disposal of subsidiary Employee share based payments Revaluation - gross Deferred tax Balance at 30 June 2021	Cash flow hedges $'000 - -	Share-based payments reserve $'000 2,720 626	Acquisition revaluation reserve $'000 (9,443) -	Total $'000 (6,723) 626
	- - - (3,641) 1,092	3,346 - 1,003 - -	(9,443) 162 - - -	(6,097) 162 1,003 (3,641) 1,092
	(2,549)	4,349	(9,281)	(7,481)

22. Dividends

There were no dividends paid, recommended or declared during the current or previous financial year.

The Company does not have any franking credits.

23. Financial instruments

Financial risk management objectives

The consolidated entity’s activities expose it to foreign currency risk, interest rate risk, price risk and credit risk. In order to minimise any adverse effects on the financial performance of the consolidated entity, derivative financial instruments, such as forward commodity contracts are used to hedge certain foreign currency and commodity price risk exposures. The consolidated entity also uses different methods to measure different types of risk to which it is exposed. The methods include sensitivity analysis in the case of interest rate, foreign exchange and ageing analysis for credit risk. Derivatives are used exclusively for hedging purposes and not as trading or speculative instruments.

Risk management is carried out by senior finance executives ('Finance') under policies approved by the Board of Directors ('the Board'). These policies include identification and analysis of the risk exposure of the consolidated entity and appropriate procedures, controls and risk limits. Finance identifies, evaluates and hedges financial risks within the consolidated entity's operating units. Finance reports to the Board on a monthly basis.

Market risk

(i) Foreign currency risk

Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities that are denominated in a currency that is not the entity’s functional currency. The majority of these exposures are generated by interest-bearing liabilities denominated in US dollars, commodity sales contracts which are typically denominated in US dollars, as well as associated receivables.

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23. Financial instruments (continued)

Generally, natural hedges, forward contracts and options are used to manage certain foreign exchange risk. During the year ended 30 June 2021, a portion of the consolidated entity's US dollar-denominated revenue from mining activities was cash flow hedged through unsecured Australian dollar-denominated copper hedges (refer to note 23(ii) for additional detail).

Sensitivity

Based on the financial instruments held at 30 June 2021, had the Australian dollar weakened/strengthened by 10% against the US dollar with all other variables held constant, the consolidated entity's profit for the year would have been $1.485 million lower (2020 loss: $2.686 million higher) or $1.215 million higher (2020 loss: $2.198 million lower), mainly as a result of foreign exchange gains/losses on translation of cash and cash equivalents, interest-bearing loans, receivables and payables denominated in foreign currencies. There would have been no impact on equity.

The carrying amount of the consolidated entity's foreign currency denominated financial assets and financial liabilities at the reporting date were as follows:

US dollars	Assets 2021 2020 $'000 $'000 8,529 15,770	Liabilities 2021 2020 $'000 $'000 27,803 51,816

(ii) Commodity price risk

Commodity price risk is the risk of financial loss resulting from movements in the price of the consolidated entity's commodity outputs.

During the year ended 30 June 2021, a portion of the consolidated entity's revenue from mining activities was cash flow hedged through unsecured gold and copper hedges.

Gold hedging was undertaken for 36,000 oz (3,000 oz per month from July 2020 to June 2021), at A$2,536.25/oz.

Copper hedging was undertaken for:

9,000 tonnes (1,500 tonnes per month from August 2020 to January 2021) at A$9,096.80/t;
5,000 tonnes (833 tonnes per month from February 2021 to July 2021) at A$9,228/t; and
4,000 tonnes (667 tonnes per month from February 2021 to July 2021) through a Zero Net Premium Option Collar, where Aeris buys put options and sells call options to form a collar structure with zero premium payable, with: - a strike price of the put options at A$10,000/t; and
a strike price of the call options at A$11,100/t.

Please refer to note 35 for information regarding additional copper hedging entered into after the reporting period.

No hedging was entered into during the year ended 30 June 2020.

(iii) Interest rate risk

Interest rate risk arises as a result of the re-pricing of investments, interest bearing receivables and borrowings and is affected by the length of the re-pricing period.

The significance and management of the risks to the consolidated entity are dependent on a number of factors including:

Interest rates (current and forward) and the currencies that the investments and borrowings are denominated in;
Level of cash, liquid investments and borrowings;
Maturity dates of investments and borrowings; and
Proportion of investments and borrowings that are fixed rate or floating rate.

The risk is measured using market and cash flow forecasting.

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23. Financial instruments (continued)

Sensitivity

At 30 June 2021, if interest rates had changed by -/+ 50 basis points from the weighted average year end rates with all other variables held constant, the consolidated entity's profit for the year would have been $0.289 million higher/lower (2020: loss would have been $0.054 million higher/lower), mainly as a result of higher/lower interest from loans, cash and cash equivalents and restricted cash.

The exposure of the consolidated entity's interest bearing liabilities at balance sheet date to interest rate changes at the contractual re-pricing dates are as follows:

0 - 12 months 1 - 5 years	2021 $'000 6,140 29,522	2020 $'000 3,626 52,539
	35,662	56,165

Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a financial loss to the consolidated entity. Credit risk is managed on a group basis. Credit risk arises from cash and cash equivalents, favourable derivative financial instruments and deposits with banks and financial institutions, as well as credit exposures to trade customers, including outstanding receivables and committed transactions.

(i) Risk management

Credit risk is managed on a consolidated basis. The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date to recognised financial assets, is the carrying amount, net of any provisions for impairment of those assets, as disclosed in the balance sheet and notes to the financial statements.

The consolidated entity has policies in place to ensure that sales of products are made to customers with an appropriate credit history and where necessary is effectively eliminated or substantially reduced by using bank and insurance instruments to secure payment for materials supplied and sold. The consolidated entity has policies that limit the amount of credit exposure to any one financial institution.

(ii) Trade receivables

The consolidated entity applies the AASB 9 Financial Instruments simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade receivables. To measure the expected credit losses, trade receivables and contract assets have been grouped based on shared credit risk characteristics and the days past due. Payments from the consolidated entity’s two major customers are historically received within the contractual payment terms.

The consolidated entity has trade receivables with embedded derivatives for provisional pricing. These receivables are generally held to collect but do not meet the 'solely payments of principal and interest' (SPPI) criteria and as a result must be held at fair value through profit or loss (FVTPL). Subsequent fair value gains or losses are taken to the consolidated statement of comprehensive income. The historical loss rates are adjusted to reflect current and forward looking information on macroeconomic factors affecting the ability of the customers to settle the receivables and sensitivity applied to the exposure on commodity price risk. The impact was considered very minimal and as a result there was no loss rate accounted for at 30 June 2021. Management will continue to monitor this position at each period end. There were also no credit losses provided for at 30 June 2021.

Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash, liquid investments and committed credit facilities to meet the consolidated entity's commitments as they arise.

Liquidity risk management covers daily, short-term and long-term needs. The appropriate levels of liquidity are determined by both the nature of the consolidated entity’s business and its risk profile.

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23. Financial instruments (continued)

Remaining contractual maturities

The following tables detail the consolidated entity's remaining contractual maturity for its financial instrument liabilities. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the financial liabilities are required to be paid. The tables include both interest and principal cash flows disclosed as remaining contractual maturities and therefore these totals may differ from their carrying amount in the consolidated statement of financial position.

1 year or less $'000 68,949 15,000 - 56 4,924 4,369	Between 1 and 5 years $'000 - - 21,309 222 27,303 4,488	Over 5 years $'000 - - 5,618 198 - -	Remaining contractual maturities $'000 68,949 15,000 26,927 476 32,227 8,857
93,298	53,322	5,816	152,436
3,641	-	-	3,641
3,641	-	-	3,641
1 year or less $'000 33,688 80 3,577 3,954	Between 1 and 5 years $'000 - 318 51,106 3,769	Over 5 years $'000 - 103 - -	Remaining contractual maturities $'000 33,688 501 54,683 7,723
41,299	55,193	103	96,595

Please refer to note 35 for additional information regarding events after the reporting period that impact the timing of cash flows disclosed above.

Fair value of financial instruments

Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.

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24. Fair value measurement

Fair value hierarchy

The following tables detail the consolidated entity's assets and liabilities, measured or disclosed at fair value, using a three level hierarchy, based on the lowest level of input that is significant to the entire fair value measurement, being: Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3: Unobservable inputs for the asset or liability.

Level 1 $'000 6,087	Level 2 $'000 -	Level 3 $'000 -	Total $'000 6,087
6,087	-	-	6,087
- -	3,641 -	- 20,418	3,641 20,418
-	3,641	20,418	24,059
Level 1 $'000 2,531	Level 2 $'000 -	Level 3 $'000 -	Total $'000 2,531
2,531	-	-	2,531

There were no transfers between levels during the financial year.

Valuation techniques for fair value measurements categorised within level 2 and level 3

The fair value of forward commodity contracts – cashflow hedges is determined using market rates and inputs at the reporting date and are considered a level 2 valuation.

The fair value of the contingent consideration (Net Value Royalty) payable in relation to the Cracow acquisition was estimated by calculating the present value of future probability-weighted cash flows using a Weighted Average Cost of Capital and is considered a level 3 valuation.

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24. Fair value measurement (continued)

Level 3 assets and liabilities

Movements in level 3 assets and liabilities during the current and previous financial year are set out below:

Balance at 1 July 2019 Balance at 30 June 2020 Additions - acquisition of Lion Mining Pty Ltd Unwinding of discount recognised through net finance costs Balance at 30 June 2021 Total losses for the current year included in profit or loss that relate to level 3 assets held at the end of the current year	Contingent consideration $'000 -
	- (19,623) (795)
	(20,418)
	(795)

The level 3 assets and liabilities unobservable inputs and sensitivity are as follows:

		Range
Description	Unobservable inputs	(weighted average)	Sensitivity
Contingent	Weighted average cost	7.4%	A change in the discount rate by 100 bps would
consideration payable	of capital		increase/decrease the fair value by $0.874
			million.
	Expected revenues	$250 - $300 million	If expected revenues were 10% higher or
			lower, the fair value would increase/decrease
			by $2.0 million.

Accounting policy for fair value measurement

When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date; and assumes that the transaction will take place either: in the principal market; or in the absence of a principal market, in the most advantageous market.

Fair value is measured using the assumptions that market participants would use when pricing the asset or liability, assuming they act in their economic best interests. For non-financial assets, the fair value measurement is based on its highest and best use. Valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, are used, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

Assets and liabilities measured at fair value are classified into three levels, using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. Classifications are reviewed at each reporting date and transfers between levels are determined based on a reassessment of the lowest level of input that is significant to the fair value measurement.

For recurring and non-recurring fair value measurements, external valuers may be used when internal expertise is either not available or when the valuation is deemed to be significant. External valuers are selected based on market knowledge and reputation. Where there is a significant change in fair value of an asset or liability from one period to another, an analysis is undertaken, which includes a verification of the major inputs applied in the latest valuation and a comparison, where applicable, with external sources of data.

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25. Key management personnel disclosures

Compensation

The aggregate compensation made to directors and other members of key management personnel of the consolidated entity is set out below:

entity is set out below:
Short-term employee benefits Post-employment benefits Long-term benefits Share-based payments	2021 $ 3,316,322 87,500 41,913 630,303	2020 $ 2,612,046 86,384 - 625,749
	4,076,038	3,324,179

26. Remuneration of auditors

During the financial year the following fees were paid or payable for services provided by PricewaterhouseCoopers, the auditor of the Company, and its network firms:

Audit services – PricewaterhouseCoopers Audit or review of the financial statements Other services – PricewaterhouseCoopers Tax compliance Tax advisory Total remuneration of PricewaterhouseCoopers Australia Other services – network firms Tax compliance	2021 $ 481,043	2020 $ 376,729
	214,013 237,204	154,913 275,237
	451,217	430,150
	932,260	806,879
	12,601	2,705

It is the consolidated entity's policy to employ the auditors on assignments additional to their statutory audit duties where their expertise and experience with the consolidated entity are important. These assignments are principally for taxation advice.

27. Contingent liabilities

As at 30 June 2021 the consolidated entity's financier Special Portfolio Opportunity Fund V Limited (SPOV) (a subsidiary of a fund managed by PAG) provided a A$15 million Contingent Instrument Facility (CI Facility) for environmental bonding. Under the CI Facility, the National Australia Bank (NAB) provides bank guarantees for environmental bonding on the consolidated entity's behalf and SPOV provides a guarantee to NAB for bonds that are not cash backed.

The terms of the CI Facility require that the consolidated entity cashback the bonds over the term of the facility, which expires June 2023. As at 30 June 2021, $5 million of the facility was cash backed, with a $10 million remaining to be cash backed.

Please refer to note 35 for additional information regarding events after the report period that impact the above arrangements.

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28. Commitments

28. Commitments
Exploration and mining leases Committed at the reporting date but not recognised as liabilities, payable: Within one year One to five years	2021 $'000 18,744 3,838	2020 $'000 2,504 2,767
	22,582	5,271

The items disclosed in the table above represent the minimum lease expenditure requirements of the consolidated entity.

29. Related party transactions

Parent entity

Aeris Resources Limited is the parent entity.

Subsidiaries

Interests in subsidiaries are set out in note 32.

Joint operations

Interests in joint operations are set out in note 33.

Key management personnel

Disclosures relating to key management personnel are set out in note 25 and the remuneration report included in the directors' report.

Transactions with related parties

(a) Directors

Mr Marcus Derwin was a Non-Executive Director up until 27 July 2020 but did not fall within the ASX definition of “independent” as he was a nominee Director of Standard Chartered Bank (SCB), which had a material business relationship with Aeris. In terms of the restructuring deed approved on 15 December 2015 that Aeris entered into with SCB and SPOV, SCB and SPOV each have a separate entitlement to appoint one Director to the Aeris Board provided their shareholding in Aeris, on a fully diluted basis, is 10% or more. SCB elected to take up this right and nominated Mr Marcus Derwin, who was appointed to the Aeris Board on 18 April 2016. As a result of the Convertible Redeemable Preference Shares held by SCB being sold or redeemed during the financial year ended 30 June 2020, SCB no longer have an entitlement to appoint a Director to the Aeris Board. Mr Derwin resigned his position as Director effective 27 July 2020.

(b) HopgoodGanim Lawyers (HG)

Mr Michele Muscillo, an independent Non-executive Director is a partner of HG. Invoices totalling $893,718 (2020: $521,978) were received from HG on normal commercial terms during the year.

Receivable from and payable to related parties

There were no trade receivables from or trade payables to related parties at the current and previous reporting date.

Loans to/from related parties

There were no loans to or from related parties at the current and previous reporting date.

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30. Parent entity information

Set out below is the supplementary information about the parent entity.

Statement of comprehensive income

Profit/(loss) after income tax Other comprehensive income for the year, net of tax Total comprehensive income	Parent 2021 2020 $'000 $'000 (22,349) 2,400 (2,387) - (24,736) 2,400	Parent 2021 2020 $'000 $'000 (22,349) 2,400 (2,387) - (24,736) 2,400
	(2,387)	-
	(24,736)	2,400

Statement of financial position

Total current assets Total non-current assets Total assets Total current liabilities Total non-current liabilities Total liabilities Net assets Equity Issued capital Prepaid capital Hedging reserve - cash flow hedges Share-based payments reserve Accumulated losses Total equity	Parent 2021 2020 $'000 $'000 63,423 43,814 132,919 120,403 196,342 164,217 13,007 8,139 789 - 13,796 8,139 182,546 156,078 509,888 452,313 - 7,216 (2,549) - 4,349 3,346 (329,142) (306,797) 182,546 156,078	Parent 2021 2020 $'000 $'000 63,423 43,814 132,919 120,403 196,342 164,217 13,007 8,139 789 - 13,796 8,139 182,546 156,078 509,888 452,313 - 7,216 (2,549) - 4,349 3,346 (329,142) (306,797) 182,546 156,078
	132,919	120,403
	196,342	164,217
	13,007	8,139
	789	-
	13,796	8,139
	182,546	156,078
	509,888 - (2,549) 4,349 (329,142)	452,313 7,216 - 3,346 (306,797)
	182,546	156,078

Guarantees entered into by the parent entity in relation to the debts of its subsidiaries

The parent entity has provided financial guarantees in respect of performance bonds for work commitments on mining and mineral exploration tenements, for the parent entity and its subsidiaries, secured by cash deposits amounting to $39,000 (2020: $5,087,651) with other cash backed financial guarantees of $230,244 (2020: $137,653), which together totalled $269,244 (2020: $5,225,303).

In addition, the parent entity also provided a parent company guarantee in relation to the SPOV debt facilities to Tritton Resources Pty Ltd and Aeris Regional Holdings Pty Ltd.

The parent entity and all its wholly-owned subsidiaries are party to a deed of cross guarantee under which each company guarantees the debts of the others. No deficiencies of assets exist in any of these subsidiaries.

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30. Parent entity information (continued)

Contingent liabilities

The parent entity had no contingent liabilities as at 30 June 2021 and 30 June 2020.

Capital commitments - Property, plant and equipment

The parent entity had no capital commitments for property, plant and equipment as at 30 June 2021 and 30 June 2020.

Significant accounting policies

The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in note 40, except for the following:

Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity; and
Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt may be an indicator of an impairment of the investment.

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31. Business combinations

Acquisition of Lion Mining Pty Ltd (Cracow)

On 1 July 2020, Aeris Resources Limited, through its wholly-owned subsidiary, Aeris Regional Holdings Pty Ltd, acquired 100% of the issued shares in Lion Mining Pty Ltd, owner and operator of the Cracow Gold Operations (Cracow). Cracow is an established, high grade, low-cost gold mine located 500 kilometres north-west of Brisbane in Queensland, Australia. The acquired business contributed revenues of $186.681 million and profit after tax of $46.020 million to the consolidated entity for the period from 1 July 2020 to 30 June 2021. The values identified in relation to the acquisition of Cracow are final as at 30 June 2021.

Details of the acquisition are as follows:

Cash and cash equivalents Trade and other receivables Inventories Property, plant and equipment Mine properties Exploration and evaluation Trade and other payables Employee benefits Rehabilitation Net assets acquired Goodwill Acquisition-date fair value of the total consideration transferred Representing: Cash paid to vendor Deferred consideration Contingent consideration Working capital adjustment Cash used to acquire business, net of cash acquired: Acquisition-date fair value of the total consideration transferred Less: cash and cash equivalents acquired Less: payments to be made in future periods Less: contingent consideration Net cash used	Fair value $'000 25 356 13,224 24,140 62,971 16,250 (10,450) (8,017) (9,725)
	88,774 -
	88,774
	60,000 13,337 19,623 (4,186)
	88,774
	88,774 (25) (13,337) (19,623)
	55,789

Deferred consideration

The purchase consideration for the Cracow acquisition includes a $15 million deferred payment due on 30 June 2022. The fair value of the deferred consideration recognised on 1 July 2020 of $13.337 million is the present value of the future cash flow using a discount rate of 6.1%.

For the period ended 30 June 2021, an expense of $807,000 was recognised in net finance costs related to the unwinding of the discount on the deferred consideration liability.

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31. Business combinations (continued)

Contingent consideration

The purchase consideration for the Cracow acquisition includes a contingent consideration arrangement that requires the consolidated entity to pay the former owners of Lion Mining Pty Ltd a mining royalty equivalent to 10% of the net value generated (revenue less C1 Direct Cash Cost, multiplied by 10%) from any gold produced by the Cracow operations for the period 1 July 2022 to 30 June 2027, up to a maximum undiscounted amount of $50 million (Net Value Royalty).

The fair value of the Net Value Royalty recognised on 1 July 2020 of $19.623 million was estimated by calculating the present value of future probability-weighted cash flows using a discount rate of 7.4%.

For the year ended 30 June 2021, an expense of $795,000 was recognised in net finance costs related to the unwinding of the discount on the contingent consideration liability.

Please refer to note 24 for additional detail regarding the fair value measurement of this liability as at 30 June 2021.

Acquisition-related costs

Transaction expenses of $4.068 million related to the acquisition of Cracow have been recognised in the consolidated statement of comprehensive income for the year ended 30 June 2021 ($3.126 million for the year ended 30 June 2020).

Accounting policy for business combinations

The acquisition method of accounting is used to account for business combinations regardless of whether equity instruments or other assets are acquired.

The consideration transferred is the sum of the acquisition-date fair values of the assets transferred, equity instruments issued or liabilities incurred by the acquirer to former owners of the acquiree and the amount of any non-controlling interest in the acquiree. For each business combination, the non-controlling interest in the acquiree is measured at either fair value or at the proportionate share of the acquiree's identifiable net assets. All acquisition costs are expensed as incurred to profit or loss.

On the acquisition of a business, the consolidated entity assesses the financial assets acquired and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic conditions, the consolidated entity's operating or accounting policies and other pertinent conditions in existence at the acquisitiondate.

Where the business combination is achieved in stages, the consolidated entity remeasures its previously held equity interest in the acquiree at the acquisition-date fair value and the difference between the fair value and the previous carrying amount is recognised in profit or loss.

Contingent consideration to be transferred by the acquirer is recognised at the acquisition-date fair value. Subsequent changes in the fair value of the contingent consideration classified as an asset or liability is recognised in profit or loss. Contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity.

The difference between the acquisition-date fair value of assets acquired, liabilities assumed and any non-controlling interest in the acquiree and the fair value of the consideration transferred and the fair value of any pre-existing investment in the acquiree is recognised as goodwill. If the consideration transferred and the pre-existing fair value is less than the fair value of the identifiable net assets acquired, being a bargain purchase to the acquirer, the difference is recognised as a gain directly in profit or loss by the acquirer on the acquisition-date, but only after a reassessment of the identification and measurement of the net assets acquired, the non-controlling interest in the acquiree, if any, the consideration transferred and the acquirer's previously held equity interest in the acquirer.

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31. Business combinations (continued)

Business combinations are initially accounted for on a provisional basis. The acquirer retrospectively adjusts the provisional amounts recognised and also recognises additional assets or liabilities during the measurement period, based on new information obtained about the facts and circumstances that existed at the acquisition-date. The measurement period ends on either the earlier of (i) 12 months from the date of the acquisition or (ii) when the acquirer receives all the information possible to determine fair value.

32. Interests in subsidiaries

The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the accounting policy described in note 40:

		Ownership	interest
	Principal place of business /	2021	2020
Name	Country of incorporation	%	%
Straits Mining Pty Ltd(1)	Australia	100%	100%
Girilambone Copper Company Pty Ltd(1) (4)	Australia	100%	100%
Tritton Resources Pty Ltd(1) (2)	Australia	100%	100%
Straits Exploration (Australia) Pty Ltd(1)	Australia	100%	100%
Straits Gold Pty Ltd(5)	Australia	-	100%
Straits Indo Gold Pty Ltd(6)	Australia	-	100%
Straits Mine Management Pty Ltd(1)	Australia	100%	100%
Templar Resources Pty Ltd(1) (4)	Australia	100%	100%
7874987 Canada Inc.(7)	Canada	-	100%
Goldminco Corporation Limited(3) (8)	Canada	-	100%
Goldminco Resources Pty Ltd(9)	Australia	-	100%
Straits Mineral Investments Pty Ltd(1)	Australia	100%	100%
Aeris Regional Holdings Pty Ltd(1)	Australia	100%	100%
Lion Mining Pty Ltd(1)	Australia	100%	-

(1) These subsidiaries have entered into a deed of cross guarantee with Aeris Resources Limited (refer note 34).

(2) Straits Mining Pty Ltd and Aeris Resources Limited hold 25.68% and 74.32% respectively, of the ordinary share capital of Tritton Resources Pty Ltd.

(3) Straits Exploration (Australia) Pty Ltd, 7874987 Canada Inc. and Straits Gold Pty Ltd held 4.14%, 28.67% and 67.19% respectively of the ordinary share capital of Goldminco Corporation Limited.

(4) Girilambone Copper Company Pty Ltd and Templar Resources Pty Ltd were de-registered on 7 July 2021.

(5) Sold 13 January 2021 (refer note 36).

(6) Deregistered on 16 December 2020.

(7) Dissolved on 13 March 2021.

(8) Deregistered on 13 October 2020.

(9) Deregistered on 16 December 2020.

33. Interests in joint operations

The consolidated entity has recognised its share of jointly held assets, liabilities, revenues and expenses of joint operations. These have been incorporated in the financial statements under the appropriate classifications. The consolidated entity has interests in the following joint operations:

		Ownership	interest
	Principal place of business /	2021	2020
Name	Country of incorporation	%	%
Torrens joint venture located in South Australia	Australia	70%	70%
Canbelago joint venture located in NSW	Australia	30%	30%

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34. Deed of cross guarantee

On 23 April 2021, Aeris Resources Limited entered into a Deed of Cross Guarantee (the Deed) with certain whollyowned subsidiaries as listed in note 32. The effect of the Deed is that the members of the Closed Group guarantee to each creditor, payment in full of any debt, in the event of winding up of any of the members under certain provisions of the Corporations Act 2001.

ASIC Corporations (Wholly-owned Companies) Instrument 2016/785 provides relief to parties to the Deed from the Corporations Act 2001 requirements for preparation, audit and lodgement of Financial Reports and Directors’ reports, subject to certain conditions as set out therein.

The consolidated statement of comprehensive income and consolidated statement of financial position are substantially the same as the consolidated entity and therefore have not been separately disclosed.

35. Events after the reporting period

On 13 July 2021, the Company announced that it had entered into additional unsecured Australian dollar copper hedges with Macquarie Bank Limited. The hedges cover the period August 2021 to June 2022 in scheduled monthly deliveries of 550 tonnes (6,050 tonnes in total). The hedges are through Zero net Premium Option Collars where the Company buys puts and sells call options to form a collar structure with zero premium payable:

The strike price of the put options is A$11,900/t; and
The strike price of the call options is A$12,900/t.

On 29 July 2021, the Company advised that it had repaid the outstanding balance (US$20.25 million) of its senior debt (Tranche A Facility) with Special Portfolio Opportunity V Limited (SPOV) (a subsidiary of a fund managed by PAG). The Company also announced that it had entered into arrangements for Australia and New Zealand Banking Group Limited (ANZ) to become the Company's senior banker. ANZ will provide the Company with a A$35 million Contingent Instrument Facility, a A$20 million Working Capital Facility and unsecured hedging lines for gold and foreign currency.

No other matter or circumstance has arisen since 30 June 2021 that has significantly affected, or may significantly affect the consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in future financial years.

36. Disposal of subsidiary

On 13 January 2021, the Company sold its wholly-owned subsidiary Straits Gold Pty Ltd to GBM Resources Limited (GBM). The principal asset in the subsidiary was the Yandan Gold Exploration Project. As consideration for the sale of Straits Gold Pty Ltd, the Company received $3 million in GBM shares and a 1.5% net smelter royalty on the first 300,000 ounces of gold equivalent mined from the Yandan tenements. The Company also subscribed for a placement of $1 million of shares in GBM.

Book values of net assets over which control was lost Restricted cash Gain on disposal of subsidiary Consideration received - shares in GBM Resources Limited Net assets disposed Loss on disposal	2021 $'000 5,238
	2021 $'000 3,000 (5,238)
	(2,238)

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37. Cash flow information

Reconciliation of profit/(loss) after income tax to net cash from operating activities

Profit/(loss) after income tax expense for the year Adjustments for: Depreciation and amortisation Fair value losses on financial assets at fair value through profit or loss Share-based payments Net loss on disposal of non-current assets Impairment loss Unrealised foreign exchange losses Finance costs - non-cash Change in operating assets and liabilities: Decrease/(increase) in trade and other receivables Decrease/(increase) in inventories Decrease in deferred tax assets Increase in prepayments Increase in trade and other payables Increase in other provisions Net cash from operating activities	2021 $'000 61,240 86,200 444 1,003 2,250 - (1,948) 3,845 3,589 (7,988) - (1,187) 19,833 2,369	2020 $'000 (38,351) 35,547 1,191 626 200 23,127 1,205 - (10,987) 5,055 334 - 12,003 288
	169,650	30,238

Changes in liabilities arising from financing activities

Balance at 1 July 2019 Net cash used in financing activities Exchange differences Other changes Balance at 30 June 2020 Net cash used in financing activities Acquisition of plant and equipment by means of leases Exchange differences Other changes Balance at 30 June 2021	Borrowings $'000 43,382 (56) 941 4,751	Leases $'000 13,288 (6,141) - -	Total $'000 56,670 (6,197) 941 4,751
	49,018 (18,933) - (4,821) 2,128	7,147 (4,422) 5,544 - -	56,165 (23,355) 5,544 (4,821) 2,128
	27,392	8,269	35,661

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38. Earnings per share

Profit/(loss) after income tax attributable to the owners of Aeris Resources Limited Weighted average number of ordinary shares used in calculating basic earnings per share Adjustments for calculation of diluted earnings per share: Options and rights over ordinary shares Weighted average number of ordinary shares used in calculating diluted earnings per share Basic earnings per share Diluted earnings per share	2021 $'000 61,240	2020 $'000 (38,351)
	Number 1,910,068,232 86,322,347	Number 515,858,189 -
	1,996,390,579	515,858,189
	Cents 3.2 3.1	Cents (7.4) (7.4)

35,777,281 performance rights (exercisable at $nil each with an expiry date of 30 June 2023) have been included in the calculation of diluted earnings per share for the year ended 30 June 2021.

93,410,609 unlisted management options (exercisable at $nil each with an expiry date of 31 December 2021) have been excluded from the calculation of diluted earnings per share for the year ended 30 June 2020 because they were antidilutive for that period. The weighted average of outstanding management options have been included in the calculation of diluted earnings per share for the year ended 30 June 2021.

72,169,292 Convertible Redeemable Preference Shares have been excluded from the calculation of diluted earnings per share for the year ended 30 June 2020 because they were anti-dilutive for that period. These Convertible Redeemable Preference Shares were cancelled or converted to ordinary shares on 8 April 2020, with the relevant portion being included in ordinary shares for the year ended 30 June 2020.

Accounting policy for earnings per share

Basic earnings per share

Basic earnings per share is calculated by dividing the profit attributable to the owners of Aeris Resources Limited, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the financial year.

Diluted earnings per share

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.

39. Share-based payments

Aeris Equity Incentive Plan

The Equity Incentive Plan is designed to provide an incentive to the Company's employees and executive Directors to achieve the long term objectives of the Company and to attract employees of experience and ability. The Equity Incentive Plan provides the Company with the ability to grant options or performance rights (each an Award). An Award is an entitlement to receive a share upon satisfaction of the applicable vesting or exercise conditions, the exercise (or deemed exercise) of the Award and the payment of an exercise price (if applicable).

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Aeris Resources Limited Notes to the consolidated financial statements 30 June 2021

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39. Share-based payments (continued)

At the Company's Annual General Meeting held on 26 November 2020, the shareholders approved the Company's Equity Incentive Plan. 35,777,281 performance rights have been issued to employees of Aeris Resources Limited, Lion Mining Pty Ltd and Tritton Resources Pty Ltd under this plan.

The performance rights are split into 4 equal tranches and vest over a three-year term in accordance with the following performance criteria:

	Percentage of
Tranche	rights	Performance criteria
1	25%	Total shareholder return performance relative to a group of peer companies for the
		period 1 July 2020 to 30 June 2023.
2	25%	Total share price increase for the period 1 July 2020 to 30 June 2023.
3	25%	Gold Ounces Reserve increase for the period 1 July 2020 to 30 June 2023.
4	25%	Copper Ounces Reserve increase for the period 1 July 2020 to 30 June 2023.

Set out below are summaries of performance rights granted under the Aeris Equity Incentive Plan:

2021 Exercise Grant date Expiry date price 26/11/2020 20/06/2023 $0.000	Balance at the start of the year -	Granted 35,777,281	Exercised -	Expired/ forfeited/ other -	Balance at the end of the year 35,777,281
	-	35,777,281	-	-	35,777,281

The weighted average remaining contractual life of performance rights outstanding at the end of the financial year was 1.97 years.

For the performance rights granted during the current financial year, the valuation model inputs used to determine the fair value at the grant date, are as follows:

		Share price at		Expected	Dividend	Risk-free	Fair value at
Grant date	Expiry date	grant date	Exercise price	volatility	yield	interest rate	grant date
26/11/2020	30/06/2023	$0.0735	$0.00	107.892%	-	0.110%	$0.0735

Management options

Management options (Options) were approved by shareholders at an EGM held on 15 December 2015 with a completion date of 31 December 2015. The options were issued to ensure that relevant managers remain employed by the Company to deliver on the Company’s stated business plan and growth strategy.

The Options were granted for no consideration and carry no dividend or voting rights.

When exercisable, each Option is convertible into one ordinary share issued within 10 business days after the Company receives an exercise notice. The options have a $nil exercise price.

The Options may only be exercised so as to not result in that holder having a voting power in the Company in excess of 19.99%. If a holder is unable to exercise their remaining vested Options the Company must use its best and all reasonable endeavours to obtain any approval or consent to allow such exercise.

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Aeris Resources Limited Notes to the consolidated financial statements 30 June 2021

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39. Share-based payments (continued)

Upon exercise the shares will be subject to a period of voluntary escrow, with the shares being released from escrow in progressive tranches from the third anniversary of the restructure date (31 December 2015).

Options that have not been exercised will expire 6 years after issue date (31 December 2021), or termination date whichever is earlier. To the extent the Options have not previously vested, they will be deemed immediately vested upon a Change of Control Event.

The number of options granted on 15 December 2015 totalled 93,410,609 at a $nil exercise price. As at 30 June 2021 all options had vested.

The assessed fair value at grant date in circumstances where there is a $nil exercise price, the value per Option on a fully marketable basis is equal to the value of the underlying share price less dividend ($0.04).

The shares are however subject to various escrow periods and as such a discount for lack of marketability to the Options was applied to take into consideration the escrow period. A discount for lack of marketability was applied as below:

25 % for Tranche 1 ($0.03)
20% for Tranche 2 ($0.032)
15% for Tranche 3 ($0.034)
10% for Tranche 4 ($0.036)
0% for Tranche 5 ($0.04)

Set out below are summaries of options granted:

Balance at the start of the year 93,410,609	Granted -	Exercised (46,182,202)	Expired/ forfeited/ other -	Balance at the end of the year 47,228,407
93,410,609	-	(46,182,202)	-	47,228,407
Balance at the start of the year 93,410,609	Granted -	Exercised -	Expired/ forfeited/ other -	Balance at the end of the year 93,410,609
93,410,609	-	-	-	93,410,609

The weighted average share price at the date of exercise of options exercised during the year ended 30 June 2021 was $0.087 (2020 – not applicable).

The weighted average remaining contractual life of options outstanding at the end of the financial year was 0.5 years (2020: 1.5 years).

Employee Share Acquisition Plan (ESAP)

A scheme under which shares may be issued by the Company to employees for no cash consideration was approved by the Board on 23 May 2011 and the ASIC exemption relief was published in the ASIC Gazette A045/11 on 7 June 2011.

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Aeris Resources Limited Notes to the consolidated financial statements 30 June 2021

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39. Share-based payments (continued)

The ESAP operates by allowing participants to obtain shares in the Company at market price, which are funded by a limited recourse interest free loan provided by the Company. The shares are held in trust with vesting of the shares subject to service conditions. If vesting conditions are satisfied, the shares continue to be held in trust subject to a holding lock until the underlying loan is repaid in full. The trust is currently dormant and there are no shares issued or allocated under the ESAP Plan.

Expenses arising from share-based payment transactions

Total expenses arising from share-based payment transactions recognised during the year as part of employee benefit expense were as follows:

expense were as follows:
Employee performance rights issued under the Aeris Equity Incentive Plan Management options	2021 $'000 704 299	2020 $'000 - 626
	1,003	626

Accounting policy for share-based payments

Equity-settled and cash-settled share-based compensation benefits are provided to employees.

Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in exchange for the rendering of services. Cash-settled transactions are awards of cash for the exchange of services, where the amount of cash is determined by reference to the share price.

The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently determined using either the Binomial or Black-Scholes option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option, together with non-vesting conditions that do not determine whether the consolidated entity receives the services that entitle the employees to receive payment. No account is taken of any other vesting conditions.

The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over the vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the best estimate of the number of awards that are likely to vest and the expired portion of the vesting period. The amount recognised in profit or loss for the period is the cumulative amount calculated at each reporting date less amounts already recognised in previous periods.

The cost of cash-settled transactions is initially, and at each reporting date until vested, determined by applying either the Binomial or Black-Scholes option pricing model, taking into consideration the terms and conditions on which the award was granted. The cumulative charge to profit or loss until settlement of the liability is calculated as follows:

during the vesting period, the liability at each reporting date is the fair value of the award at that date multiplied by the expired portion of the vesting period; and
from the end of the vesting period until settlement of the award, the liability is the full fair value of the liability at the reporting date.

All changes in the liability are recognised in profit or loss. The ultimate cost of cash-settled transactions is the cash paid to settle the liability.

Market conditions are taken into consideration in determining fair value. Therefore any awards subject to market conditions are considered to vest irrespective of whether or not that market condition has been met, provided all other conditions are satisfied.

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Aeris Resources Limited Notes to the consolidated financial statements 30 June 2021

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39. Share-based payments (continued)

If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been made. An additional expense is recognised, over the remaining vesting period, for any modification that increases the total fair value of the share-based compensation benefit as at the date of modification.

If the non-vesting condition is within the control of the consolidated entity or employee, the failure to satisfy the condition is treated as a cancellation. If the condition is not within the control of the consolidated entity or employee and is not satisfied during the vesting period, any remaining expense for the award is recognised over the remaining vesting period, unless the award is forfeited.

If equity-settled awards are cancelled, they are treated as if they had vested on the date of cancellation, and any remaining expense is recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled and new award is treated as if they were a modification.

40. Significant accounting policies

The principal accounting policies adopted in the preparation of the financial statements are set out either in the respective notes or below. These policies have been consistently applied to all the years presented, unless otherwise stated.

New or amended Accounting Standards and Interpretations adopted

The consolidated entity has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ("AASB") that are mandatory for the current reporting period. This includes the agenda decision issued by the IFRS Interpretations Committee in March 2021 which clarified the accounting treatment for Software-as-a-service (‘SaaS’) arrangements, including the accounting for related implementation, customisation and configuration costs. The adoption of these new or amended Accounting Standards and Interpretations did not have a material effect on the consolidated financial statements for the year.

Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.

Basis of preparation

These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001, as appropriate for for-profit oriented entities. These financial statements also comply with International Financial Reporting Standards as issued by the International Accounting Standards Board ("IASB").

Historical cost convention

The financial statements have been prepared under the historical cost convention, as modified by the revaluation of financial assets and liabilities (including derivative financial instruments) at fair value through profit and loss.

Critical accounting estimates

The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the consolidated entity's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in note 41.

Parent entity information

In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated entity only. Supplementary information about the parent entity is disclosed in note 30.

Principles of consolidation

The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Aeris Resources Limited ('Company' or 'parent entity') as at 30 June 2021 and the results of all subsidiaries for the year then ended. Aeris Resources Limited and its subsidiaries together are referred to in these financial statements as the 'consolidated entity'.

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Aeris Resources Limited Notes to the consolidated financial statements 30 June 2021

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40. Significant accounting policies (continued)

Subsidiaries are all those entities over which the consolidated entity has control. The consolidated entity controls an entity when the consolidated entity is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the consolidated entity. They are de-consolidated from the date that control ceases.

Intercompany transactions, balances and unrealised gains on transactions between entities in the consolidated entity are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the consolidated entity.

The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest, without the loss of control, is accounted for as an equity transaction, where the difference between the consideration transferred and the book value of the share of the non-controlling interest acquired is recognised directly in equity attributable to the parent.

Where the consolidated entity loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-controlling interest in the subsidiary together with any cumulative translation differences recognised in equity. The consolidated entity recognises the fair value of the consideration received and the fair value of any investment retained together with any gain or loss in profit or loss.

Current and non-current classification

Assets and liabilities are presented in the consolidated statement of financial position based on current and non-current classification.

An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the consolidated entity's normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months after the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period. All other assets are classified as non-current.

A liability is classified as current when: it is either expected to be settled in the consolidated entity's normal operating cycle; it is held primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities are classified as non-current.

Deferred tax assets and liabilities are always classified as non-current.

Derivative financial instruments

Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured to their fair value at each reporting date. The accounting for subsequent changes in fair value depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged.

The consolidated entity designates certain derivatives as either:

hedges of the fair value of recognised assets or liabilities or a firm commitment (fair value hedges)
hedges of a particular risk associated with the cash flows of recognised assets and liabilities and highly probable forecast transactions (cash flow hedges).

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Aeris Resources Limited Notes to the consolidated financial statements 30 June 2021

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40. Significant accounting policies (continued)

At inception of the hedge relationship, the consolidated entity documents the economic relationship between hedging instruments and hedged items including whether changes in the cash flows of the hedging instruments are expected to offset changes in the cash flows of hedged items. The consolidated entity documents its risk management objective and strategy for undertaking its hedge transactions. The fair values of derivative financial instruments designated in hedge relationships are disclosed in note 16. Movements in the hedging reserve in shareholders’ equity are shown in note 21. The full fair value of a hedging derivative is classified as a non-current asset or liability when the remaining maturity of the hedged item is more than 12 months; it is classified as a current asset or liability when the remaining maturity of the hedged item is less than 12 months. Trading derivatives are classified as a current asset or liability.

(i) Cash flow hedges that qualify for hedge accounting

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in the cash flow hedge reserve within equity. The gain or loss relating to the ineffective portion is recognised immediately in profit or loss, within other gains/(losses).

Amounts accumulated in equity are reclassified in the periods when the hedged item affects profit or loss.

When a hedging instrument expires, or is sold or terminated, or when a hedge no longer meets the criteria for hedge accounting, any cumulative deferred gain or loss and deferred costs of hedging in equity are immediately reclassified to profit or loss.

Joint operations

A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement. The consolidated entity has recognised its share of jointly held assets, liabilities, revenues and expenses of joint operations. These have been incorporated in the financial statements under the appropriate classifications.

Investments and other financial assets

Investments and other financial assets are initially measured at fair value. Transaction costs are included as part of the initial measurement, except for financial assets at fair value through profit or loss. Such assets are subsequently measured at either amortised cost or fair value depending on their classification. Classification is determined based on both the business model within which such assets are held and the contractual cash flow characteristics of the financial asset unless an accounting mismatch is being avoided.

Financial assets are derecognised when the rights to receive cash flows have expired or have been transferred and the consolidated entity has transferred substantially all the risks and rewards of ownership. When there is no reasonable expectation of recovering part or all of a financial asset, it's carrying value is written off.

Financial assets at amortised cost

A financial asset is measured at amortised cost only if both of the following conditions are met: (i) it is held within a business model whose objective is to hold assets in order to collect contractual cash flows; and (ii) the contractual terms of the financial asset represent contractual cash flows that are solely payments of principal and interest.

Financial assets at fair value through profit or loss

Financial assets not measured at amortised cost or at fair value through other comprehensive income are classified as financial assets at fair value through profit or loss. Typically, such financial assets will be either: (i) held for trading, where they are acquired for the purpose of selling in the short-term with an intention of making a profit, or a derivative; or (ii) designated as such upon initial recognition where permitted. Fair value movements are recognised in profit or loss.

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Aeris Resources Limited Notes to the consolidated financial statements 30 June 2021

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40. Significant accounting policies (continued)

Impairment of financial assets

The consolidated entity recognises a loss allowance for expected credit losses on financial assets which are either measured at amortised cost or fair value through other comprehensive income. The measurement of the loss allowance depends upon the consolidated entity's assessment at the end of each reporting period as to whether the financial instrument's credit risk has increased significantly since initial recognition, based on reasonable and supportable information that is available, without undue cost or effort to obtain.

Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-month expected credit loss allowance is estimated. This represents a portion of the asset's lifetime expected credit losses that is attributable to a default event that is possible within the next 12 months. Where a financial asset has become credit impaired or where it is determined that credit risk has increased significantly, the loss allowance is based on the asset's lifetime expected credit losses. The amount of expected credit loss recognised is measured on the basis of the probability weighted present value of anticipated cash shortfalls over the life of the instrument discounted at the original effective interest rate.

For financial assets mandatorily measured at fair value through other comprehensive income, the loss allowance is recognised in other comprehensive income with a corresponding expense through profit or loss. In all other cases, the loss allowance reduces the asset's carrying value with a corresponding expense through profit or loss.

Impairment of non-financial assets

Non-financial assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount.

Recoverable amount is the higher of an asset's fair value less costs of disposal and value-in-use. The value-in-use is the present value of the estimated future cash flows relating to the asset using a pre-tax discount rate specific to the asset or cash-generating unit to which the asset belongs. Assets that do not have independent cash flows are grouped together to form a cash-generating unit.

Finance costs

Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are expensed in the period in which they are incurred.

Goods and Services Tax ('GST') and other similar taxes

Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part of the expense.

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the tax authority is included in other receivables or other payables in the consolidated statement of financial position.

Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the tax authority, are presented as operating cash flows.

Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.

Rounding of amounts

The Company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and Investments Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with that Corporations Instrument to the nearest thousand dollars, or in certain cases, the nearest dollar.

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Aeris Resources Limited Notes to the consolidated financial statements 30 June 2021

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40. Significant accounting policies (continued)

New Accounting Standards and Interpretations not yet mandatory or early adopted

Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory, have not been early adopted by the consolidated entity for the annual reporting period ended 30 June 2021. The consolidated entity has not yet assessed the impact of these new or amended Accounting Standards and Interpretations.

41. Critical accounting judgements, estimates and assumptions

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and assumptions on historical experience and on other various factors, including expectations of future events, that management believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal the related actual results. The judgements, estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within the next financial year are discussed below.

Coronavirus (COVID-19) pandemic

Judgement has been exercised in considering the impacts that the Coronavirus (COVID-19) pandemic has had, or may have, on the consolidated entity based on known information. This consideration extends to the nature of the products offered, customers, supply chain, staffing and geographic regions in which the consolidated entity operates. Other than as addressed in specific notes, there does not currently appear to be either any significant impact upon the financial statements or any significant uncertainties with respect to events or conditions which may impact the consolidated entity unfavourably as at the reporting date or subsequently as a result of the Coronavirus (COVID-19) pandemic.

Mineral Resources and Ore Reserve estimates

In order to calculate Mineral Resources and Ore Reserves, estimates and assumptions are required about a range of geological, technical and economic factors. Estimating the quality and/or grade of the Mineral Resources and Ore Reserves requires the size, shape and depth of mineral and ore bodies to be determined by analysing geological data such as drilling samples. This process may require complex and difficult geological judgements and calculations to interpret the data. The consolidated entity is required to determine and report Mineral Resources and Ore Reserves in Australia under the principles incorporated in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves, known as the JORC Code. The JORC Code requires the use of reasonable investment assumptions to calculate Mineral Resources and Ore Reserves.

As the economic assumptions used to estimate Mineral Resources and Ore Reserves change from year to year, and as additional geological data is generated during the course of operations, estimates of Mineral Resources and Ore Reserves may change from year to year. Changes in reported Mineral Resources and Ore Reserves may affect the consolidated entity's financial results and financial position in a number of ways, including the following:

Recognition of deferred tax on mineral rights and exploration recognised on acquisitions;
Recoverable amount of deferred mining expenditure and capitalisation of development costs; and
Units of production method of depreciation and amortisation.

Estimation for the provision for rehabilitation and dismantling

Provision for rehabilitation and dismantling of property, plant and equipment is estimated taking into consideration facts and circumstances available at the balance sheet date. This estimate is based on the expenditure required to undertake the rehabilitation and dismantling, taking into consideration time value. This requires the use of estimates and judgements in relation to a range of inputs including:

Mineral Resources and Ore Reserves, and mine planning scheduling;
Production costs; and
Discount rates.

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Aeris Resources Limited Notes to the consolidated financial statements 30 June 2021

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41. Critical accounting judgements, estimates and assumptions (continued)

Impairment of non-financial assets

The consolidated entity considers annually whether there have been any indicators of impairment and then tests whether or not non-current assets have suffered an impairment.

This requires the use of estimates and judgements in relation to a range of inputs including:

Commodity prices;
Exchange rates;
Mineral Resources and Ore Reserves, and mine planning scheduling;
Production costs; and
Discount rates.

Refer to note 12 for additional detail regarding the estimates and judgements applied to impairment testing carried out during the year ended 30 June 2020.

Recoverability of deferred tax assets

In determining the recoverability of deferred tax assets, management prepare and review an analysis of estimated future results which support the future realisation of the deferred tax assets. The estimated future results are derived from estimates also used for impairment assessments referred to in the notes to the consolidated financial statements. To the extent that cash flows and taxable income differ significantly from estimates, the ability of the consolidated entity to realise recognised deferred tax assets would be impacted.

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Aeris Resources Limited Directors' declaration 30 June 2021

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In the Directors' opinion:

the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements;
the attached financial statements and notes comply with International Financial Reporting Standards as issued by the International Accounting Standards Board as described in note 40 to the financial statements;
the attached financial statements and notes give a true and fair view of the consolidated entity's financial position as at 30 June 2021 and of its performance for the financial year ended on that date;
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable; and
at the date of this declaration, there are reasonable grounds to believe that the members of the Closed Group will be able to meet any obligations or liabilities to which they are, or may become, subject by virtue of the deed of cross guarantee described in note 34 to the financial statements.

The Directors have been given the declarations required by section 295A of the Corporations Act 2001.

Signed in accordance with a resolution of Directors made pursuant to section 295(5)(a) of the Corporations Act 2001.

On behalf of the Directors

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Andre Labuschagne Executive Chairman

26 August 2021 Brisbane

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Independent auditor’s report

To the members of Aeris Resources Limited

Report on the audit of the financial report

Our opinion

In our opinion:

The accompanying financial report of Aeris Resources Limited (the Company) and its controlled entities (together the Group) is in accordance with the Corporations Act 2001 , including:

(a) giving a true and fair view of the Group's financial position as at 30 June 2021 and of its financial performance for the year then ended
(b) complying with Australian Accounting Standards and the Corporations Regulations 2001 .

What we have audited

The Group financial report comprises:

the consolidated statement of financial position as at 30 June 2021
the consolidated statement of comprehensive income for the year then ended
the consolidated statement of changes in equity for the year then ended
the consolidated statement of cash flows for the year then ended
the notes to the consolidated financial statements, which include significant accounting policies and other explanatory information
the directors’ declaration.

Basis for opinion

We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial report section of our report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.

Our audit approach

An audit is designed to provide reasonable assurance about whether the financial report is free from material misstatement. Misstatements may arise due to fraud or error. They are considered material if

480 Queen Street, BRISBANE QLD 4000, GPO Box 150, BRISBANE QLD 4001 T: +61 7 3257 5000, F: +61 7 3257 5999, www.pwc.com.au

PricewaterhouseCoopers, ABN 52 780 433 757

Liability limited by a scheme approved under Professional Standards Legislation.

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individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial report.

We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial report as a whole, taking into account the geographic and management structure of the Group, its accounting processes and controls and the industry in which it operates.

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	*Materiality*		*Audit scope*		*Key audit matters*
●	For the purpose of our audit	●	Our audit focused on where	●	Amongst other relevant topics,
	we used overall Group		the Group made subjective		we communicated the
	materiality of $3.1 million,		judgements; for example,		following key audit matters to
	which represents		significant accounting		the Audit and Risk Committee:
	approximately 5% of the Group’s profit before tax.		estimates involving assumptions and inherently uncertain future events.		− Carrying value of Mine properties
●	We applied this threshold, together with qualitative considerations, to determine	●	The Group has exploration and production assets at the		− Carrying value of exploration and evaluation assets
	the scope of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of		Tritton mine in New South Wales and the Cracow mine in Queensland.	●	− Business Combinations These are further described in the_Key audit matters_section
	misstatements on the	●	The accounting processes are		of our report.
	financial report as a whole.		structured around the head
			office finance function at the
●	We chose Group profit before tax because, in our view, it is		Group’s corporate office in Brisbane.
	the benchmark against which
	the performance of the Group
	is most commonly measured.

We utilised a 5% threshold based on our professional judgement, noting it is within the range of commonly acceptable thresholds.

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Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report for the current period. The key audit matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Further, any commentary on the outcomes of a particular audit procedure is made in that context.

*Key audit matter*	*How our audit addressed the key audit*
	*matter*
*Carrying value of Mine properties*	We considered the Group’s impairment indicator
(Refer to note 12) $65.1m	assessment for the mine properties and its conclusion
	that no impairment indicators, nor for impairment
Th G h i i i i	loss reversal existed at balance sheet date.

The Group has mine properties in use amounting $65.1m used in mine operations.

In respect of the impairment indicator assessment, we performed the following:

As required by Australian Accounting Standards, the Group performed an impairment trigger assessment of its mining properties as at 30 June 2021 and determined that there were no impairment indicators.

Evaluated the Group’s assessment of whether there was any indicator of impairment of its Tritton and Cracow operations assets CGU as at 30 June 2021 by comparing the considerations included in the Group’s assessment to the requirements of Australian Accounting Standards.
● Evaluated if the Group identified and considered the relevant internal and external factors in its assessment.
● Considered the Group’s market capitalisation at balance sheet date compared with the net assets of the Group.
● Obtained an understanding of the impact of the latest life of mine plan assumptions and assessed the competence and objectivity of management’s internal technical experts in preparing this plan.
● Evaluated the adequacy of the disclosures in light of the requirements of Australian Accounting Standards.
We evaluated the Group’s impairment triggers assessment by performing the following procedures, amongst others:

The determination of whether an impairment or impairment trigger exists can be judgemental. Management must determine the recoverable amount for property, plant and equipment and mine properties when impairment indicators are identified.

The carrying value of mine properties was a key audit matter due to its significance at year end, and because the Group’s determination of the existence of indicators of impairments for each CGU involves significant judgements.

Carrying value of exploration and evaluation assets (Refer to note 11) $51.8m

Discussed with key operational and finance staff to develop an understanding of the current status and future exploration intentions for each asset inspecting the budgets for each tenement to assess that future expenditure is budgeted for exploration and evaluation assets.
● Identifying any areas where the Group’s right to explore is either at, or close to, expiry through reference to the tenements’ lease expiry dates and assessing the appropriateness of retaining the associated costs as an asset by obtaining copies of

The Group’s exploration and evaluation assets amount to $51.8m at 30 June 2021.

As required by Australian Accounting Standards, the Group performed an impairment trigger assessment of its exploration and evaluation tenements assets at 30 June 2021 and determined that there were no impairment indicators. The carrying value of exploration and evaluation assets was a key audit matter due to the financial significance of the exploration and evaluation assets and the judgement required in estimating resources

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Key audit matter How our audit addressed the key audit matter
available in each tenement that requires further applications for renewal of the leases with exploration and evaluation. relevant authorities. ● Evaluating any unsuccessful exploration activities during the year by inspecting the results of drilling and other activities conducted during the year and considering the Group’s future exploration plans for the related tenements.
● Considering any changes in exploration plans for each tenement by considering the exploration and evaluating activities planned during the year ended 30 June 2021.
● For a sample of additions to exploration assets capitalised as at 30 June 2021, compared amounts and details to relevant invoices and appropriate supporting documents. Evaluated whether, in view of the requirements of Australian Accounting Standards, the financial report provide adequate disclosures for exploration and evaluation assets.

Business Combinations (Refer to note 31) $88.8m The Group acquired 100% of the shares in Lion Mining Pty Ltd, owner and operator of the Cracow Gold Operations for total consideration of $88.8m, as described in note 31 of the financial report. The accounting for the acquisition was a key audit matter because it was a significant transaction for the year given the financial and operational impacts on the Group. In addition, the Group made complex judgements when accounting for the acquisition, including:

considering whether the Group acquired assets or a business. The accounting treatment required differs between accounting for assets and business acquisitions, including in respect of transaction costs and goodwill recognition.
● assessing the Group’s ability to influence Lion Mining Pty Ltd’s financial and operating policies and hence whether Lion Mining Pty Ltd should be included in the Group financial report through consolidation or equity accounting.
● identifying all assets and liabilities of the newly acquired business and estimating the fair value of each asset and liability for initial recognition by the Group, particularly the exploration and evaluation assets and mining properties. The Group was assisted by an external valuation expert in this process.

●	estimating the purchase consideration, particularly in respect of contingent

Assisted by PwC valuation experts in aspects of our work, our procedures included the following, amongst others:

Evaluating the Group’s accounting against the requirements of Australian Accounting Standards, key transaction agreements, our understanding of the business acquired and its industry, selected minutes of the board of directors meetings, selected documents evaluating the transactions and legal correspondence.
● Assessing the fair values of the acquired assets and liabilities recognised, including: o obtaining and inspecting the valuation assessment prepared by the Group with the assistance of management’s experts on which the fair values of the identifiable assets and liabilities acquired were based, and
o assessing the competence and capability of management’s expert.
● Considering the adequacy of the business combination disclosures in light of the requirements of Australian Accounting Standards.
In relation to the valuation of the contingent consideration, our procedures included, amongst others: ● Assessing if the calculation of the contingent consideration was in accordance with the

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*Key audit matter*	*How our audit addressed the key audit*	*How our audit addressed the key audit*
	*matter*
consideration payable on the achievement of		contractual arrangements and the requirements
certain operational performance targets.		of Australian Accounting Standards.
	●	Assessing the Group’s evaluation of whether the
		conditions required for the contingent
		consideration to be paid were likely to be met in
		the future based upon actual performance since
		acquisition, current Group forecasts and market
		forecasts.
	●	Developing an understanding of the Group’s
		perspective on the future growth of the acquired
		business.

Other information

The directors are responsible for the other information. The other information comprises the information included in the annual report for the year ended 30 June 2021, but does not include the financial report and our auditor’s report thereon. Prior to the date of this auditor's report, the other information we obtained included the Corporate Directory and Director’s report. We expect the remaining other information to be made available to us after the date of this auditor's report.

Our opinion on the financial report does not cover the other information and we do not and will not express an opinion or any form of assurance conclusion thereon.

In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

If, based on the work we have performed on the other information that we obtained prior to the date of this auditor’s report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

When we read the other information not yet received, if we conclude that there is a material misstatement therein, we are required to communicate the matter to the directors and use our professional judgement to determine the appropriate action to take.

Responsibilities of the directors for the financial report

The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.

In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.

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Auditor’s responsibilities for the audit of the financial report

Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial report.

A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance Standards Board website at: https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of our auditor's report.

Report on the remuneration report

Our opinion on the remuneration report

We have audited the remuneration report included in pages 12 to 24 of the directors’ report for the 65 78 year ended 30 June 2021.

In our opinion, the remuneration report of Aeris Resources Limited for the year ended 30 June 2021 complies with section 300A of the Corporations Act 2001.

Responsibilities

The directors of the Company are responsible for the preparation and presentation of the remuneration report in accordance with section 300A of the Corporations Act 2001 . Our responsibility is to express an opinion on the remuneration report, based on our audit conducted in accordance with Australian Auditing Standards.

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PricewaterhouseCoopers

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Simon Neill Partner

Brisbane 26 August 2021

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Annual Report 2021

Shareholder Information

The shareholder information as set out below was applicable at 30 September 2021.

Issued Capital:

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----- Start of picture text -----

|||
|---|---|
|Range|
|Fully paid ordinary Shares|2,229,864,717|
|Employee options|24,716,448|

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Distribution of holders of fully paid ordinary shares:

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----- Start of picture text -----

Range Units No. of holders %
100,001 and Over 2,050,576,808 1,343 17.16
10,001 to 100,000 165,852,394 3,979 50.83
5,001 to 10,000 9,728,533 1,203 15.37
1,001 to 5,000 3,659,775 984 12.57
1 to 1,000 47,207 319 4.08
Total 2,229,864,717 7,828 100.00
Unmarketable Parcels 1,056,455 706 9.02
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Substantial shareholders:

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----- Start of picture text -----

Shareholder Units %
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----- Start of picture text -----

||||
|---|---|---|
|TUDOR COURT|430,637,062|19.31|
|PARADICE INVESTMENT MGT|223,282,592|9.85|
|DGJ KEET INVESTMENTS|107,299,760|4.81|

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Voting rights:

On a show of hands, every member present has one vote; and

On a poll, every member present has one vote for each share held by the member and in respect of which the member is entitled to vote except in respect of partly paid shares, each of which will confer on a poll only a fraction of one vote which the amount paid up on the share bears to the total issue price of the share .

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Shareholder Information

Top 20 Shareholders:

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----- Start of picture text -----

Rank Name Number %
1 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 836,525,555 37.51
2 CITICORP NOMINEES PTY LIMITED 198,015,324 8.88
3 NATIONAL NOMINEES LIMITED 107,743,943 4.83
4 J P MORGAN NOMINEES AUSTRALIA PTY LIMITED 73,303,615 3.29
5 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 47,246,434 2.12
6 MR WILLIE LABUSCHAGNE 37,504,244 1.68
7 DARRELL JAMES HOLDINGS PTY LTD 30,000,000 1.35
8 BNP PARIBAS NOMS PTY LTD 15,846,768 0.71
9 BNP PARIBAS NOMINEES PTY LTD 15,000,576 0.67
10 BRAZIL FARMING PTY LTD 15,000,000 0.67
11 GLENCORE FINANCE (BERMUDA) LTD 13,151,314 0.59
12 MR IAN KINGSLEY SHEPPARD 12,118,137 0.54
13 CERTANE CT PTY LTD 12,114,002 0.54
14 CERTANE CT PTY LTD 10,728,408 0.48
15 CS THIRD NOMINEES PTY LIMITED 9,847,661 0.44
16 MR ROBERT ALLAN BRAINSBURY 9,138,037 0.41
17 MR KENNETH JOSEPH HALL 9,000,000 0.40
18 MR ANDREW FERGUSON 7,000,000 0.31
19 MR BASTIAAN SCHEEPERS 6,333,010 0.28
20 AUSTRALIAN EXECUTOR TRUSTEES LIMITED 6,130,707 0.27
Top 20 holders of fully paid ordinary shares 1,471,747,735 66.00
Balance of register 758,116,982 34.00
Grand total 2,229,864,717 100.00
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143

Annual Report 2021

Glossary

$ or A$ Australian dollar Aeris Aeris Resources Limited Ag Silver ASX Australian Securities Exchange Au Gold AuEq Gold equivalent – gold plus silver expressed in equivalent ounces of gold using a conversion ratio dependent on prevailing gold and silver prices Bcm Bank cubic metres Board Board of Directors of Aeris Resources Limited Company or company Aeris Resources Limited Consolidated Entity Aeris and its subsidiaries Cu Copper Cu% Copper percentage for the year 12 months to 30 June 2021 FY Financial year g Gram Injury Statistics Lost Time Injury (LTI) - An injury (including a fatality or permanent disability) that results in a minimum of one full shift absence from work. Restricted Work Injury (RWI) - An injury resulting in a person not returning to his/her complete range of normal duties. Medical Treatment Injury (MTI) - An injury requiring external/professional medical treatment (not first aid treatment only). Total Recordable Injury (TRI) = LTI + RWI + MTI. Frequency Rate (for LTIFR and TRIFR) - The number of occupational injuries expressed as a rate per million man hours worked. Usually calculated as a rolling 12 month average. Calculated as: Number of injuries (LTI or TRI) x 1,000,000/number of hours worked kt Thousands of metric tonnes M Million Mo Molybdenum oz Ounces RL Relative Level (height above mine datun) tpa Tonnes per annum t Metric tonne US$ United States dollar

144

Aeris Resources

Corporate Directory

Directors

Andre Labuschagne Executive Chairman Alastair Morrison Non Executive Director

REGISTERED AND HEAD OFFICE

Suite 2.2, Level 2, HQ South Tower 520 Wickham Street Fortitude Valley, Brisbane, Queensland 4006 Australia

Tel: +61 7 3034 6200 Email: [email protected]

Michele Muscillo Non Executive Director

Marcus Derwin Non Executive Director (Resigned 27 July 2020)

Colin Moorhead Non Executive Director (Appointed 27 July 2020)

Company Secretaries

SHARE REGISTRY

Link Market Services Level 21, 10 Eagle Street Brisbane, Queensland 4000 Australia

Tel: +61 7 3320 2200 Fax: +61 2 9287 0303 Email: [email protected]

WEBSITE

www.aerisresources.com.au

Robert Brainsbury

Dané van Heerden

STOCK EXCHANGE LISTING

Australian Securities Exchange (ASX: AIS)

Senior Management – Corporate

Robert Brainsbury Chief Financial Officer

Ian Sheppard Chief Operating Officer Kim Franks Chief People Officer

AUDITORS

PricewaterhouseCoopers

LAWYERS

HopgoodGanim Lawyers

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AI assistant

AERIS RESOURCES LIMITED — Annual Report 2021

64347_rns_2021-10-25_c42e4bb6-7df9-4d89-940d-1b956035d9c1.pdf

Aeris Resources

Contents

Producing

22,987t

73,685oz

Strengthening

Exploring

Growing

Tritton Copper Operations

Cracow Gold Operations

Corporate – strengthening the Balance Sheet

A message from Andre Labuschagne, Executive Chairman

Dear shareholder,

Financial Review

Financial Results

Financial Position

Significant Changes in the State of Affairs

Acquisition of Cracow Gold Operations (Cracow)

Extension of debt and contingent instrument facilities as a result of acquisition of Cracow

Repayment of Debt

Gold and Copper Hedging

Gold hedging

Copper hedging

Equity placement

Sale of Yandan Gold Exploration Project

SIGNIFICANT EVENTS AFTER THE BALANCE DATE

Other events

COVID-19 Impact

FY2022 LIKELY DEVELOPMENTS AND EXPECTED RESULTS

Tritton Copper Operations

TRITTON ANNUAL COPPER PRODUCTION (TONNES)

Cracow Gold Operations

CRACOW ANNUAL

GOLD OPERATIONS (OUNCES)

Tritton Copper Operations

Tritton Copper Operations

Murrawombie Underground Mine

Tritton Underground Mine (Tritton)

Mining Project - Budgerygar Underground

Mining Project – Murrawombie Open Pit

Mining Project – Avoca Tank Underground

Mining Project – Budgery Deposit Open Pit

Cracow Gold Operations (Cracow)

Tailings Dam Project

Exploration

Tritton Copper Operations (Aeris 100%)

Aeris’ exploration strategy within the Tritton tenement package is based on a combination of extending mineralisation at the current Mineral Resource deposits and advanced projects and greenfields exploration for new deposits.

Constellation Deposit

Surface auger geochemistry sampling program

Tritton - Budgerygar Corridor

Murrawombie Deposit

Avoca Tank

Kurrajong Deposit

Canbelego JV (Aeris 30%)

Cracow Gold Operations (Aeris 100%)

Surface RC drill programs

Crown and Royal Deeps

Roses Pride Deeps surface drilling

Near mine underground Resource definition drilling

Klondyke - Royal surface drilling

Torrens JV (Aeris 70%)

2021 Resources and Reserves

Aeris Resources Limited has updated its Mineral Resource and Ore Reserve estimates for its 100% owned Tritton Copper Operations and Cracow Gold Operations at 30 June 2021.

Tritton Copper Operations

Cracow Gold Operations

Mineral Resource

Tritton Copper Operations

Tritton deposit changes

Tritton Upper level remnant pillars

Murrawombie deposit changes

Cracow Gold Operations

Cracow deposit changes

2021 Mineral Resource Tritton Tenement Package

June 2021

June 2021 (Continued)

June 2020

June 2020 (Continued)

AERIS RESOURCES LIMITED Annual Report 2021