AIC Mines Ltd (ASX: A1M) shares had a day to forget on Thursday.
The ASX copper stock ended the day around 18% lower at 67 cents.
Image source: Getty Images
What happened?
Investors were hitting the sell button following the release of the company's quarterly update, which revealed higher than expected costs at the Eloise copper mine.
Commenting on the update, Bell Potter said:
A1M has met production and cost guidance for its 3rd consecutive year. At its 100%- owned Eloise Copper Mine in QLD, A1M has reported production for the June 2026 quarter of 3,106t copper in concentrate plus 1,605oz gold at All-In-Sustaining-Costs (AISC) of A$6.15/lb (vs BPe 3,299t Cu in concentrate plus 1,389oz Au at A$4.51/lb). Compared with our numbers, this was a slight miss on copper, a beat on gold, but costs were a negative surprise and the highest reported from Eloise under A1M's ownership.
Bell Potter has also been looking at the ASX copper stock's expansion plans and is pleased with its progress. However, it concedes that AIC Mines' higher costs has raised concerns that it may have to raise capital to fund the expansion. It said:
We recently attended a site visit to Eloise and returned comfortable with the view that the mine expansion is on schedule and mill commissioning will commence as planned in the December quarter 2026. This timeline was reiterated by A1M with the June quarterly report, albeit with some non-critical-path delays. A1M will also provide an updated outlook on 20 July 2026 covering FY27, FY28 and FY29 production targets.
We anticipate this will include an update on a staged expansion from 1.1Mtpa to 1.5Mtpa, which is already partially catered for with the current expansion to 1.1Mtpa. On our current forecasts the expansion is fully funded. However, the higher costs reported in this quarterly have caused, in our view, some in the market to question this and it being a factor in today's negative share price reaction.
Should you buy this ASX copper stock?
According to the note, the broker has retained its buy rating on AIC Mines' shares with a reduced price target of 90 cents.
Based on its current share price of 67 cents, this implies potential upside of 34% for investors over the next 12 months.
Commenting on its buy thesis, Bell Potter said:
EPS changes with this update are: FY26: -13%, FY27: -8% and FY28: -9%, on the softer June quarter, forecast higher underlying unit costs, and slightly lower production. A1M represents leveraged, unhedged copper exposure via its Eloise Copper Project with a clear, organic growth strategy being advanced. It has a strong track record of delivery to guidance and a well-credentialed management team. We retain our Buy recommendation on a lowered NPV-based target price of $0.90/sh.
