Aurelia Metals ascends to the peak

Two is better than one for Aurelia Metals (ASX: AMI). To meet mounting copper demand amidst a global push for decarbonisation, the company is rapidly progressing the Federation Project, integrating it with the capable Peak Mine with the aims of producing 100,000-140,000t in FY25 and looking towards a full capacity operation in CY26.

Leveraging its strong financial position and efficient approval process, the success of the Federation Project is a case study in attracting significant industry interest.

Expedited timelines

Following first discovery in 2019, the company, from the outset focused on rapid development.

Aurelia Metals chief executive and managing director Bryan Quinn says the move from discovery, to studies, to exploration and permitting happened very quickly.

Defying the norms of a traditionally long and complex discovery to production journey, by 2022 Aurelia had secured an exploration lease and by 2023 approvals were in place to begin development.

“There’s been more, pretty impressive, drilling completed around the resource to define its final extent,” Mr Quinn said.

“A parallel study was undertaken to understand how best to process the material, whether on-site or off-site, and to determine the optimal throughput capacity to generate value.”

The company is well on the way to actualising its vision, as the Peak processing facility has already processed the first ore from the Federation Mine.

The ore has shown positive initial recovery performance of zinc, lead and gold and the concentrates produced are within offtake specifications.

With promising initial results, an accelerated timeline, strategic integration with Peak Mine, a clear vision for future production and promising market trends, Aurelia is positioned for a bright future.

Production timeline and financial viability

With approvals in place and mining infrastructure progressing, the company is focused on its production targets.

“We’re targeting around 100,000 to 140,000t tons in FY25,” Mr Quinn said.

“By the end of that fiscal year, around June, we expect to be at commercial production levels.

“From there, we want to ramp up to 50,000t in CY26, moving toward full capacity.”

Aurelia is projecting a positive cash flow by the end of FY25 with the view to ramp up in CY26 from a reinvestment and continued expansion perspective.

Meeting the copper demand boom

As companies work towards their net zero commitments, and the world continues to accelerate electrification and decarbonisation efforts, the demand for copper continues to soar.

“Copper has a very strong future,” Mr Quinn said.

“Just based on the mega trends out there in terms of what’s required for decarbonisation, copper is going to be something which continues to trend upward.”

Projected market drivers are based on the sheer volume of big companies nearing the conclusion of their 10-year net zero commitments. Limited supply of the resources required to meet these promises could see an unprecedented increase in price.

Economic and industry outcomes

The project has significant implications for the local economy and the industry at large. The increased production capacity and focus on high-demand metals is set to create jobs, boost regional economic growth and contribute to Australia’s standing as a leading producer of critical minerals.

Additionally, the expansion of the Peak Mine’s capacity showcases how existing mining assets can be leveraged for maximum efficiency, allowing the project to confidently ride the waves of volatile mining cycles. The case study offers industry lots of learning opportunities from an optimisation perspective.

Mr Quinn says mining is very cyclical.

“The key to all of these mining companies is to make sure your cost structure is at the lower end of the cost curve, so that you can withstand all the storms.

“Our journey is always going to be about having a good cost structure and the right commodities.”

Harnessing local power

Committed to ensuring that the economic benefits of the Federation project flow directly into regional NSW, Aurelia Metals has prioritised hiring locally, sourcing employees from Dubbo, Orange, Mudgee and other nearby communities.

“We want to see Cobar and the local regions get the benefit of being there,” Mr Quinn said.

“Now it’s easier said than done, so we need to be pragmatic. We’re not always going to find people who want to live in Cobar.”

To address these recruitment challenges, the company is offering drive-in, drive-out (DIDO) opportunities for those based in surrounding regions. Aurelia relies on a small proportion of contracted workers to fill critical skill gaps. While not the ideal solution, this approach ensures the project can continue to operate smoothly while maximising opportunities for regional workers.

Peak Mine synergies

Made up of two sections, the North and South mines, Mr Quinn says Peak South Mine is slowing down in lead-zinc-gold production just as Federation is ramping up in those same materials.

“While we transition Peak Mine toward more copper-heavy production in the North, Federation keeps our plant full of high-quality lead, zinc and gold ores,” he said.

“This allows us to optimise plant operations and maximise value.”

Federation’s accelerated trajectory is largely being driven by its seamless integration with the Peak Mine and processing facility in Cobar, a synergistic integration that has facilitated streamlining and efficiency gains that is paying in dividends.

Aurelia’s bespoke Peak processing facility can also handle high-metallic ores, including lead, gold, zinc and silver.

Looking ahead: future growth

With the mining lease granted and approvals largely in place, focus on Federation has shifted to ramping production to full operational capacity. Expecting to reach this milestone by CY26, Aurelia is well-positioned for sustained growth.

In the first half of FY25, Aurelia undertook extensive underground exploration programs within the Peak Mine.

Significant copper was intersected at Kairos, in the Peak South Mine, and at Jubilee North and New Cobar, in the Peak North Mine. Significant gold and copper were also intersected in drilling at Hercules, in the Peak South Mine.

“It’s been an impressive journey from discovery to production,” Mr Quinn said.

“We’re confident in our ability to deliver on our targets and continue to grow in line with market demand.”

With copper demand showing no signs of slowing and regulatory approvals secured, the project stands to continue to be a key example of the power of efficient planning and excellent strategic execution, and how this translates to successful mining organisation outcomes.