Aeris Resources Shares Soar on $50 Million Capital Raise (ASX:AIS)

Aeris Resources Shares Soar on $50 Million Capital Raise (ASX:AIS)

The Aeris Resources Ltd [ASX:AIS] shares has raised $50.4 million via an institutional placement to accelerate copper and gold exploration programs.

AIS shares were up 7% on the news, exchanging hands for 22 cents a share.

The copper and gold explorer is ending the week on a high, up 25% over the last seven days.

AIS shares are also up a substantial 500% over the last 12 months.

ASX AIS - Aeris Resources Share Price Chart


$50 million boost

Aeris Resources today confirmed the completion of its institutional placement to raise $50.4 million.

The raised capital will accelerate exploration programs at AIS’s 100% owned Tritton Copper Operation and its Cracow Gold Operation.

The funds will also cover general working capital costs.

The placement was conducted at 17.5 cents per share, representing a 14.6% discount to Aeris’s last closing price of 20.5 cents, with about 287.9 million new ordinary shares issued.

Aeris’s Executive Chairman Andre Labuschagne offered the following commentary:

This is an exceptional outcome for Aeris and its shareholders and provides the balance sheet strength to accelerate exploration at both our operations in FY22, while progressing in parallel, life extension projects at Tritton.

In FY22 we will continue development of the Budgerygar underground mine. We are also finalising plans to commence development of Avoca Tank (underground) and a cut-back of the open pit at Murrawombie.

The strong institutional support for the Placement I believe is a reflection of not only the transformation of the Company over the last 12 months but also an endorsement of our strategy focusing on copper and gold and adding value through organic and acquired growth.

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AIS ASX outlook

Aeris’s announcement comes after US inflation data showed domestic prices rising slighter faster than expected, which caused real Treasury yields to decline.


Source: Bloomberg

According to Bloomberg, the increase in the US consumer price index last month ‘extends a months-long build-up in inflation that risks becoming more established as the economy strengthens.

Inflation risks tend to favour gold as investors flock to the metal as an inflation hedge and safe haven.

Of course, it wasn’t only the US informing speculation in gold.

The European Central Bank recently renewed its pledge to maintain faster emergency bond-buying, which could see the European economy run hot — and possibly lead to higher prices.

The run-up in AIS shares could reflect a bullish sentiment forming, with bullish investors likely thinking that the producer’s large cash injection has come at an opportune moment.

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Lachlann Tierney,

For The Daily Reckoning Australia

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