AIC Mines : Annual Report 31 December 2021

For personal use only

Annual Report

For the year ended 31 December 2021

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Corporate Directory

ABN: 11 060 156 452

onlyDIRECTORS

Josef El-Raghy, Chairman

Aaron Colleran, Managing Director and CEO

Brett Montgomery, Non-Executive Director

Tony Wolfe, Non-Executive Director

Jon Young, Non-Executive Director

COMPANY SECRETARY

Linda Hale

useREGISTERED OFFICE A8, 435 Roberts Road Subiaco WA 6008 Tel: (08) 6269 0110 Fax: (08) 6230 5176

Email:info@aicmines.com.au

BANKERS personalNational Australia Bank

100 St Georges Terrace

Perth WA 6000

SHARE REGISTRY

Computershare Investor Services Pty Limited

Level 11

172 St Georges Terrace

Perth WA 6000

Tel: 1300 850 505 (within Australia) or + 61 3 9415 4000 (outside Australia) www.computershare.com/au

STOCK EXCHANGE

AIC Mines Limited shares are listed on the Australian Securities Exchange (ASX). ASX Code: A1M

AUDITORS

Ernst & Young

11 Mounts Bay Road

ForPerth WA 6000

INTERNET ADDRESS

www.aicmines.com.au

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Chairman's Letter

Dear Fellow Shareholders,

I am pleased to present the 2021 Annual Report to you and provide an overview of our production and exploration activities.

only2021 was a transformational year for AIC Mines with the successful acquisition of the Eloise Copper Mine completed on 1 November 2021. The acquisition elevated us to copper producer and provides a source of strong cashflow from which to further grow the Group. In addition, we continued to progress our exploration activities at the Lamil and Marymia Projects in Western Australia and acquired a new exploration project in New South Wales, the Delamerian Project, through new tenement applications.

The Eloise Copper Mine is a low cost, cash generative asset with significant growth potential located in the prolific copper districts f Mt Isa and Cloncurry in Queensland. In the first two months of ownership the mine generated A$11.7 million in operating

cashflow and A$4.7 million in net mine cashflow at a low all-in sustaining cost of A$3.05/lb of copper sold.

We believe that there is an outstanding opportunity at Eloise to add value through exploration success, resource growth, operational reliability, and regional consolidation. Our exploration strategy at Eloise is focused on extending the known resource

useareas and discovery of new satellite lodes within the Eloise tenements, with a view to extend the mine life well beyond 5 years. At Lamil, a second drilling program was completed during the year focused on the Lamil Main Dome .target area, where anomalous copper-gold mineralisation was intercepted in the maiden drilling program in 2020 and also testing other copper-gold and zinc- lead targets. A total of forty-three holes for 8,800 metres of reverse circulation drilling was completed. The drilling intersected prospective lithologies and zones of alteration and associated sulphides, further advancing our understanding of the geological environment.

At Marymia, exploration for copper focused on the Copper Hills Belt where a total of nine holes for 1,820 metres of reverse circulation drilling was completed. Testing was conducted on wide spaced lines along the entire length of the approximately 7km personalong Copper Hills copper oxide trend. The drilling was successful in intersecting multiple metre zones of chalcopyrite in stringer veins. In addition to the copper exploration, gold exploration focused on four targets primarily within underexplored extensions of the Plutonic-Marymia greenstone belt. A total of thirty-two holes for 3,974 metres of reverse circulation drilling was completed at the Middle Island, DeGrussa North and Hermes North prospects and one diamond hole was drilled for 684 meters at the Stetson

Prospect.

The Group also expanded its exploration portfolio through the staking of two applications of over 4,280 km2 in the Delamerian Orogen in NSW. This early-stage project offers belt scale opportunities for copper, gold and nickel in an emerging region that is analogous to other highly endowed carton margin settings in Australia, such as the Paterson Province and Albany-Fraser Belt. It is an early-mover opportunity where government investment into unlocking the exploration potential is underway. We plan to leverage off the new regional datasets and mineral system knowledge that government bodies, like the state Geological Surveys and the MinEx Cooperative Research Centre, are now collecting.

We continue to assess opportunities to grow the Group through mergers and acquisitions. We are targeting late-stage gold and copper projects located in Australia where we can add value through exploration and development. We remain disciplined in our r view of new projects.

I would like to thank shareholders for their ongoing support and the AIC Mines team for their ongoing commitment. We look forward with confidence to the year ahead.

Yours sincerely,

ForJosef El-Raghy

Chairman

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Directors' Report

The directors present their report together with the consolidated financial statements for AIC Mines Limited and the entities it controlled at the end of, or during, the year ended 31 December 2021 ('the Group", "AIC") and the auditor's report thereon.

Items included in the directors' report and consolidated financial statements are presented in Australian dollars unless otherwise

onlystated.

DIRECTORS

The names and details of the Group's directors in office during the financial year and until the date of this report are as follows. The directors were in office for the entire period unless otherwise stated. No director has served as a director of any other ASX- listed company in the past 3 years unless mentioned below.

Josef El-Raghy

Chairman - Appointed 18 April 2019

Mr El-Raghy has extensive experience in developing and managing gold companies. Most recently, Mr El-Raghy was Chairman useof Centamin Plc, a gold mining company listed on the Main Board of the London Stock Exchange and the Toronto Stock Exchange. Mr El-Raghy joined Centamin as Managing Director in August 2002 and oversaw the Group's transition from junior explorer to successful gold miner before ceasing with the Group in June 2020. Mr El-Raghy was formerly a director of both CIBC Wood Gundy and Paterson Ord Minnett and had a ten-year career in stockbroking. In addition to his direct management experience of project development and operation, his time at Centamin has also provided him with deep experience with

international capital markets.

Aaron Colleran

Managing Director and CEO - Appointed 18 April 2019

personalMr Colleran has extensive experience in public markets mergers and acquisitions and strategic planning. Prior to joining AIC, Mr Colleran was a founding member of the leadership team of Australian gold producer Evolution Mining Limited, having managed its business development and investor relations program from inception through to 2018. He was instrumental in the multiple merger and acquisition transactions that created Evolution Mining, now one of Australia's largest gold mining companies. Mr Colleran was previously a Non-Executive Director of Kidman Resources Limited (from January 2018 to September 2019) and Riversgold Limited (from February 2019 to August 2019).

Brett Montgomery

Non-Executive Director - Appointed 18 April 2019

Mr Montgomery has extensive experience in public company management in both executive and non-executive roles. Mr Montgomery is currently a Non-Executive Director of Tanami Gold NL (commencing February 2013). He was previously Managing Director of Kalimantan Gold NL and a Director of Bard 1 Life Sciences Ltd (from November 2014 to June 2019), Grants Patch Mining Ltd, EZA Corporation Ltd and Magnum Gas and Power Ltd.

Tony Wolfe

Non-Executive Director - Appointed 25 November 2016

Mr Wolfe has experience in asset management having managed event driven and special situations portfolios across the Asia- ForPacific region. Mr Wolfe currently holds the position of Portfolio Manager for Brahman Capital Management Pte Ltd focusing on equity driven and special situation investments. Brahman Pure Alpha Pte Ltd, an entity controlled by Brahman Capital Management Pte Ltd is a substantial holder in AIC Mines. Previously, Mr Wolfe was a Portfolio Manager at Brummer & Partners AG, a multi-strategy hedge fund that manages over US$15.0 billion in assets under management. Mr Wolfe has also held senior

portfolio management roles at Pengana Capital and Rubicon Asset Management in Sydney.

Jon Young

Non-Executive Director - Appointed 2 November 2021

Mr Young is Chairman of FMR Investments Pty Ltd, AIC Mines' largest shareholder, and is a Director of Wealth Management at Canaccord Genuity Financial Limited. Mr Young has over 30 years' experience in financial services and has been advising clients with Canaccord Genuity (formerly Patersons) since 2001. Mr Young holds a Bachelor of Commerce Degree from the University of Western Australia and is a member of the Chartered Accountants Australia and New Zealand. Mr Young is also a non- executive director of ASX-listed Greenstone Resources Limited and was previously a non-executive director of ASX-listed Breakaway Resources Limited.

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