Aura Energy Limited Quarterly Report for the Period Ending 31 March 23 (8536X)

TIDMAURA

RNS Number : 8536X

Aura Energy Limited

28 April 2023

28 April 2023

Quarterly Report for the Period Ending 31 March 2023

KEY POINTS:

-- Enhanced Definitive Feasibility Study (EFS) confirms robust financial returns based on a 150% increase in annual production and near-term production potential of the Tiris Uranium Project

-- Substantially improved EFS based on a 52% increase in Measured and Indicated Resources at Tiris Uranium Project

-- Mining Conventions signed with the Government of Mauritania for the Tiris Uranium Project provide 30 years of financial stability for tax, royalties, and customs associated with the Tiris Uranium Project

-- Shareholders' Agreement (15% shareholding) signed with the Agence Nationale de Recherches Géologiques et du Patrimoine Minier ("ANARPAM") in Mauritania

-- Front-End Engineering Design for the Tiris Uranium Project continues using the revised metrics outlined in the EFS.

Aura Energy Limited (ASX: AEE, AIM: AURA) ("Aura" or "the Company") a company focused on the fast-tracked development of its Tiris Project in Mauritania ("Tiris" or the "Tiris Project"), is pleased to provide an overview of activities for the period ended 31 March 2023 ("Quarter" or "Reporting Period") to accompany the Appendix 5B.

To view the Appendix 5B please click here: http://www.rns-pdf.londonstockexchange.com/rns/8536X_1-2023-4-28.pdf

Company Activities

During the Quarter the Company delivered a significant milestone with the completion of the EFS that confirmed the robust project economics of the Tiris Project based on the increased resource size and quality. With the signing of the Mining Conventions with the Mauritanian Government, which provides 30 years of financial stability for tax, royalties, and customs associated with the development of the Tiris Project, the company remains on track for a potential final investment decision in Q4 2023.

The company continues to progress with the export permit for the uranium, with the final transport and shipping protocols in the final stages of preparation to allow the permit to be submitted during the next quarter.

Aura continues to support the Swedish government's strategy to rescind the present ban on uranium mining and continues to progress with the work for the delivery of the exploitation permit for the Häggån Project that supports the independence of Sweden's future energy supply.

Aura continues to be adequately funded for key programs aimed at supporting a final investment decision in Q4 CY2023.

Tiris Project Update

During the March 2023 Quarter, the Company achieved significant development milestones at the Tiris Uranium including:

-- A 52% increase in Measured and Indicated Resources at Tiris Uranium Project of contained U(3) O(8) to 29.6 Mlbs U(3) O(8) , 62.1Mt at 216 ppm U(3) O(8) at a 100ppm grade cut-off.

-- Finalisation of the EFS that increased steady-state production from 0.8 Mlbs U(3) O(8) to 2.0 Mlbs pa U(3) O(8) .

-- Strong financial metrics delivered from the EFS, headlined by a 180% increase in the Base Case post-tax NPV to US$ 226M and IRR of 28%.

   --    Forecast 57% cash margins from an AISC of US$ 28.77 / lb U(3) O(8) . 

-- Initial capital cost of US$87.9 million to produce 0.8 M lbs U(3) O(8) and an additional capital of US$90.3 million to produce 2.0 Mlbs pa U(3) O(8) .

-- Completion of transformation Mining Convention agreements with the Government of Mauritania to provide 30 years of financial stability for tax, royalties, and customs associated with the Tiris Uranium Project.

-- The signing of a Shareholders Agreement with ANARPAM to formalise the government shareholding (15%) of the Tiris Project in Mauritania.

Major Resource Upgrade for the Tiris Project

On 14 February 2023, the Company announced that the Resource Upgrade program completed in late 2022 has increased the Measured and Indicated (M&I) Resources at the Tiris by 52%. The new Measured and Indicated Resources of 29.6 Mlbs U(3) O(8) from 62.1Mt at 216 ppm U(3) O(8) at a 100ppm grade cut-off.

This Resource upgrade was important because it formed one of the critical inputs to the Enhanced Definitive Feasibility Study project work. The EFS was designed to assess the potential to increase the production from Tiris and to achieve this required an increased M&I resource.

As part of the exploration program, several additional near-term exploration targets have been identified as exhibiting the potential to grow the Tiris resource further.

Enhanced Definitive Feasibility Study

On 29 March 2023, the Company released the results of the EFS. The revised study was based on the original 2021 study but benefited from the recently upgraded Mineral Resource Estimate and revised throughput modelling. The EFS confirmed the strong financial case for Tiris with an increase in steady-state production to 2.0 Mlbs pa U(3) O(8) delivering robust returns to shareholders over the life of the Project.

The key highlights from the EFS were:

   --    150% increase in average steady-state production to 2.0 Mlbs U(3) O(8) 
   --    Proven processing with simple free dig mining 
   --    Rapid beneficiation that delivers >2,000 ppm U(3) O(8) leach feed grade 

-- High confidence in production schedule with 76% of forecast production from Proved and Probable Reserves, and 24% from Inferred Mineral Resources

   --    Low initial capital cost and high capital efficiency from any future expansion 
   --    Excellent cash margins driven by an AISC of US$ 28.77 / lb 
   --    18-month construction period provides a rapid path to production following FID 

30 - Year Mining Conventions Agreed for the Tiris Project

On 1 February 2023, Aura announced the Mauritanian Government's approval and execution of mining conventions providing tenure security and fiscal certainty for an initial 30-year period. In addition, the company has executed a Shareholder's Agreement with ANARPAM (15% shareholding), the representative Mauritania government body in relation to the Tiris Project.

Tiris Project Front-End Engineering Design

During the quarter front-end-engineering design (FEED) has continued to investigate optimisation strategies and incorporated the outcomes of the EFS. Additional improvements to the recovery of U(3) O(8) within the leaching, ion exchange, and precipitation circuits are under investigation and seek to optimise the production profile.

This FEED work will provide detailed engineering costings for the Board's final investment decision targeted for Q4 2023. It will also identify long-lead items to ensure the timely delivery of the construction of the Tiris Project.

Häggån Project Update

Following a debate in the Swedish Parliament (Riksdag), some reporting conveyed the premature impression that the removal of the ban on uranium mining had been rejected. To clear up misinformation on the situation, the Company has provided a full translation of the debate on its website (auraenergy.com.au).

Aura understands that the rejection of the motions by the Industry Committee does not represent any change of policy or direction by the Government, which has repeated its support to lift the ban on uranium mining.

Aura supports the Swedish Government's policy to undertake an orderly and considered review of uranium mining and Aura will continue to progress with the work required to deliver an exploitation permit in 2024. Key to this will be enhanced consultation and collaboration with all stakeholders at the national, regional, Sami and community levels.

Finance and Offtake Activities

Cash

Aura's cash position as of 31 March 2023 was A$4.4m, with the major expenditures during the quarter comprising:

-- A$1.2m in the Tiris Project development costs (A$1.4m total expenditure on projects) inclusive of the costs associated with the EFS completion.

   --    A$837k of corporate costs. 

Forecast net operating cashflow and the investment in exploration and evaluation for the quarter of $2.2m and the closing cash balance of $4.4m the company has enough cash for 1.97 quarters.

The directors believe that the Company can raise capital as required based on the success of previous capital raises and the continued development of the Company's projects.

The directors expect to continue to raise funds through the exercise of 90 million listed options, the exercise price of A$0.052, that have the potential to raise A$4.7m.

30 million of the options are held by large shareholders who have continued to support the Company.

The directors anticipate that the existing funds and those received from the exercise of options will be sufficient to cover the operating activities and exploration and evaluation activities of the business.

 
 Use of Funds under March 2022     Funds allocated      Funds expended          Variance 
  Placement                        under Prospectus    between Placement 
                                                        and 31 Mar 2023 
                                 ==================  =================== 
 
  Tiris 
  Project                            $7,600,000           $4,423,199       $3,176,801    42% 
                                 ==================  ===================  ============  ===== 
 
  Costs 
  of 
  the 
  Placement 
  (inc. 
  issue 
  and 
  listing 
  fees)                               $557,000             $540,810          $16,190      3% 
                                 ==================  ===================  ============  ===== 
 
  Working 
  capital                             $643,000             $643,000            $0         0% 
                                 ==================  ===================  ============  ===== 
 
  Total                              $8,800,000           $5,607,009        $3,192,991    37% 
                                 ==================  ===================  ============  ===== 
 

Table 1 - Use of Funds under March 2022 Placement

Tenement Summary

Details of mining tenements, farm-in and farm-out agreements held at the end of the Quarter, and any changes to such tenements and agreements during the Quarter.

 
 Tenement         Name           Grant /          Expiry        Km(2)          Holder           Equity 
    No.                         Application 
                                   Date 
           =================  =============  ================  ======  ====================== 
 Mauritania 
                                              Exploitation              Tiris Ressources 
 2491C4     Ain Sder           8/02/2019       License          207      SA                     85% 
           =================  =============  ================  ======  ====================  ========= 
                                              Exploitation              Tiris Ressources 
 2492C4     Oued El Foule      8/02/2019       License          190      SA                     85% 
           =================  =============  ================  ======  ====================  ========= 
                                              Subject 
 561        Oum Ferkik         16/04/2008      to exclusivity   60      Aura Energy Limited     100% 
           =================  =============  ================  ======  ====================  ========= 
            Hadeibet                                                    Tiris International 
 2457B2      Belaa             2/04/2019      2/04/2022         41       Mining Co.             100% 
           =================  =============  ================  ======  ====================  ========= 
                                                                        Tiris International 
 2458B2     Touerig Taet       2/04/2019      2/04/2022         134      Mining Co.             100% 
           =================  =============  ================  ======  ====================  ========= 
 Sweden 
            Häggån                                            Vanadis Battery 
 2007-243    nr 1              28/08/2007     28/08/2024        18       Metals AB              100% 
           =================  =============  ================  ======  ====================  ========= 
            Mockelasen                                                  Vanadis Battery 
 2018-9      nr 1              21/01/2019     21/01/2024        18       Metals AB              100% 
           =================  =============  ================  ======  ====================  ========= 
            Skallbole                                                   Vanadis Battery 
 2018-7      nr 1              20/01/2019     20/01/2024        8        Metals AB              100% 
           =================  =============  ================  ======  ====================  ========= 
 
 

Table 2 - Tenement Summary

Farm-in agreement with Nomads Mining Company sarl, Mauritania, to earn up to 70% interest in Nomads 100%-owned exploration permit in Mauritania (refer to ASX announcement 11 June 2019).

Measured and Indicated Resources at Tiris Uranium Project as at 14 Feb 2023

 
Cut-off U(3) O(8)    Resource    Class    Tonnes (Mt)    U(3) O(8) (g/t)    U(3) O(8) (Mlb) 
       g/t 
                     Zone 
                   ---------- 
       100             All     Measured      29.1             218                14 
                   ----------  ---------  -----------  -----------------  ----------------- 
       100             All     Indicated     33.1             215               15.6 
                   ----------  ---------  -----------  -----------------  ----------------- 
       100             All     Total M&I     62.2             216               29.6 
                   ----------  ---------  -----------  -----------------  ----------------- 
       100             All     Inferred      50.9             259               29.2 
                   ----------  ---------  -----------  -----------------  ----------------- 
       100             All        All         113             236               58.9 
                   ----------  ---------  -----------  -----------------  ----------------- 
 

Full details announced 14 February 2023 "Major Resource Upgrade at Aura Energy's Tiris Project".

Totals may not add due to rounding.

Table 3 - Measured and Indicated Resources at Tiris Uranium Project

For further information, please contact:

 
 David Woodall                    Paul Ryan 
  Managing Director and CEO        Citadel-MAGNUS 
  Aura Energy Limited              Investor & Media Relations 
  [e-mail]           [e-mail] 
                                   [phone] 
 SP Angel Corporate Finance LLP   WH Ireland Limited 
  (Nominated Advisor and Joint     (Joint Broker) 
  Broker)                          James Bavister 
  David Hignell                    Andrew de Andrade 
  Kasia Brzozowska                 [phone] 
  [phone] 
                                 ---------------------------- 
 

About Aura Energy (ASX: AEE, AIM: AURA)

Aura Energy is an Australian-based minerals company that has major uranium and polymetallic projects with large resources in Africa and Europe. The Company is now focused on uranium production from the Tiris Project, a major greenfield uranium discovery in Mauritania.

A recent Enhanced Feasibility Study has increased the project NPV significantly which reconfirms Tiris as one of the lowest capex, lowest operating cost uranium projects that remain undeveloped in the world.

In October 2021, the Company entered a US$10m Offtake Financing Agreement with Curzon, which includes an additional up to US$10m facility, bringing the maximum available under the agreement to US$20m.

In 2023, Aura will continue to transition from a uranium explorer to a uranium producer, to capitalise on the rapidly growing demand for nuclear power as the world continues to shift towards a decarbonised energy sector.

Disclaimer Regarding Forward-Looking Statements

This ASX announcement (Announcement) contains various forward-looking statements. All statements other than statements of historical fact are forward-looking statements. Forward-looking statements are inherently subject to uncertainties in that they may be affected by a variety of known and unknown risks, variables and factors which could cause actual values or results, performance or achievements to differ materially from the expectations described in such forward-looking statements. The Company does not give any assurance that the anticipated results, performance or achievements expressed or implied in those forward-looking statements will be achieved.

Mineral Resource and Ore Reserve Estimates

The information in this announcement that relates to Mineral Resources or Ore Reserves is extracted from the reports titled ' Tiris Uranium Project - Resource Upgrade of 10% ' released to the Australian Securities Exchange (ASX) on 27 August 2021 and 'Tiris Uranium Project DFS Update' released to the ASX on 18 August 2021 and for which Competent Persons' consents were obtained. Each Competent Person's consent remains in place for subsequent releases by the Company of the same information in the same form and context, until the consent is withdrawn or replaced by a subsequent report and accompanying consent. The Company confirms that it is not aware of any new information or data that materially affects the information included in the original ASX announcements and, in the case of estimates of Mineral Resources or Ore Reserves, that all material assumptions and technical parameters underpinning the estimates in the original ASX announcements continue to apply and have not materially changed.

The Company confirms that the form and context in which the Competent Person's findings are presented have not been materially modified from the original ASX announcements.

In respect to Resource statements, there is a low level of geological confidence associated with the inferred mineral resource and there is no certainty that further exploration work will result in the determination of indicated measured resource or that the production target will be realised.

Notes to Project Description

The Company confirms that the material assumptions underpinning the Tiris Uranium Production Target and the associated financial information derived from the Tiris production target as outlined in the Aura Energy release dated 18 August 2021 for the Tiris Uranium Project Definitive Feasibility Study continue to apply and have not materially changed.

The Tiris Uranium Project Resource was released on 27 August 2021 "Resource Upgrade of 10% - Tiris Uranium Project". The Company confirms that it is not aware of any new information or data that materially affects the information included in the relevant market announcement and that all material assumptions and technical parameters underpinning the estimates in the relevant market announcements continue to apply and have not materially changed.

In respect to Resource statements, there is a low level of geological confidence associated with the inferred mineral resource and there is no certainty that further exploration work will result in the determination of indicated measured resource or that the production target will be realised.

Competent Persons

The Competent Person for the portion of the 2022 Tiris Vanadium Mineral Resource Estimate and classification relating to the Hippolyte, Hippolyte South, Lazare North, and Lazare South deposits is Mr Arnold van der Heyden of H&S Consulting Pty Ltd. The information in the report to which this statement is attached that relates to the 2018 Mineral Resource Estimate is based on information compiled by Mr van der Heyden. Mr van der Heyden has sufficient experience that is relevant to the resource estimation to qualify Mr van der Heyden as a Competent Person as defined in the 2012 edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr van der Heyden is an employee of H&S Consultants Pty Ltd, a Sydney-based geological consulting firm. Mr van der Heyden is a Member and Chartered Professional of The Australasian Institute of Mining and Metallurgy (AusIMM) and consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

The Competent Person for the portion of the 2022 Tiris Vanadium Resource Estimate and classification relating to all other deposits within the resource (Sadi South, Sadi North, Marie, Hippolyte West, Oum Ferkik East, Oum Ferkik West deposits) is Mr Oliver Mapeto, an independent resources consultant.

The information in the report to which this statement is attached that relates to the 2018 Resource Estimate is based on information compiled by Mr Mapeto. Mr Mapeto has sufficient experience that is relevant to the resource estimation to qualify Mr Mapeto as a Competent Person as defined in the 2012 edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Mapeto is a Member of The Australasian Institute of Mining and Metallurgy (AusIMM) and consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

The Competent Person for drill hole data and for integrating the different resource estimates is Mr Neil Clifford. The information in the report to which this statement is attached that relates to compiling resource estimates and drill hole data is based on information compiled by Mr Neil Clifford. Mr Clifford has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify Mr Clifford as a Competent Person as defined in the 2012 edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Clifford is a consultant to Aura Energy. Mr Clifford is a Member of the Australasian Institute of Geoscientists. Mr Clifford consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

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April 28, 2023 02:45 ET (06:45 GMT)