In a recent podcast Direct from the Desk: A deep dive into Oz Minerals by James Gerrish, Market Matters and Peter O'Connor, Senior Analyst, Shaw & Partners, as published on Livewire on 9 June 2021, Peter said the following about Aeris:
Aeris, which is AIS, I think is the ticker. Aeris were a copper company with a very high-cost copper mine. They bought a gold mine off Evolution last year. And they're getting a lot of airtime at the moment with what they're doing, and in markets where you're buying cyclicality and leverage, you want to buy the high-cost producer. Why? Because that leverage, that dollar leverage is so much more extreme. So, Aeris has been getting a lot of airtime.
Can the experienced folks in our community decipher and explain this in layman terms as to what it means ? Why would buying a high-cost producer be good at any point in the cycle ? What does leverage mean in this case ?
Appreciate any insights.