Half-year Report

TO VIEW THE FULL HALF YEARLY REPORT AS A .PDF PLEASE VISIT THE COMPANY WEBSITE:

http://www.auraenergy.com.au/investor/ASX%20Announcements/2017/Half%20Year%20Report%20December%202016.pdf

16 MARCH 2017

AURA ENERGY LIMITED

(“Aura” or the “Company”)

Half Yearly Report

Aura Energy Limited (ASX:AEE / AIM:AURA), the uranium development company focused on developing projects in Africa and Europe towards production, has released its Half Yearly report.

Principal activities

The principal activity of the Group is mineral exploration, primarily the discovery and development of uranium deposits in Mauritania and Sweden.

Operating Results

The consolidated interim statement of profit or loss and other comprehensive income shows a Loss after tax of $1,514,366 for the half-year ended 31 December 2016 (2015: $777,258), including one-off costs associated with the Alternative Investment Market (AIM) admission of $683,121.

Review of operations

Aura is an Australian incorporated and listed entity with its Tiris Project located in Mauritania and its Haggan Project located in Sweden. During the Half-Year, Aura completed a successful listing on the Alternative Investment market as well as an Australian Placement to raise $5 million and diversified its portfolio with the acquisition of the Tasiast South gold prospects and the application for Lithium and Soda Ash research permits.

With the funding from the AIM admission, the Company recommenced its Feasibility Study (FS) activities on its Tiris uranium project in northern Mauritania and began planning for further drilling activities at its Haggan project in Sweden.

TIRIS PROJECT (Mauritania)

Aura re-commenced the feasibility study of its 100% owned 49 million pound U3O8 calcrete project in Mauritania (see Figure 1). The project has low operating costs and low development capital with strong financial returns under long-term pricing scenarios.

Tiris Project Studies

The Tiris FS restarted across many critical areas of the project during the period. In general terms, the main areas remaining in the study are resource upgrade and validation, leaching test work and process design, environmental and social impact study and infrastructure.

During the Half-Year the main aspects of work were:

• Recruitment of a Study Manager who has developed projects in the relevant regions of Africa
• Permanent appointment of Dr Will Goodall as Principal Metallurgist for the Company
• Completion of a downhole logging survey as part of the resource validation assessment
• Ultra-detailed ground radiometric surveying over the key resource zones to establish more precisely the outlines of, and zonation within, mineralisation across the major resources
• This ground radiometric survey work was continued over the Hippolyte South prospect, currently under application, which hosts extensive and strong radiometric anomalies south of the main Hippolyte resource. This will define drill targets for future resource drilling on this very prospective target
• Planning for continuation of previous metallurgical studies for leaching and beneficiation
• Environmental and social impact assessment field work was undertaken with consultants on all resource sites. Associated meetings with relevant government officials have also taken place and are continuing
• The Terms of Reference for the Environmental and Social Impact Statement was submitted to the government
• Water search consultants have commenced work which involves an initial program of ground geophysics to select drill targets prior to drill testing of these sites. The study will focus principally on the basal sedimentary units of the Taoudeni Basin to the south of the project area. These are known to host substantial water supplies elsewhere in the region. A few favourable sites on Reguibat Shield rocks closer to the project site will also be tested in this program
• Preparation of documents for the Mining Lease Application
• Two additional Exploration Permits were granted to Aura during the Half- Year. One, Oum Ferkik South, covers the extension to the south of the mineralised zone that contains Aura’s Ferkik Resource. The other, Aguelet, contains an Inferred Resource of 0.7 million lbs U3O8 at 240 ppm U3O8

AMARE LITHIUM AND SODA ASH PROJECT (Mauritania)

During the Half-Year, the Company announced that as part of a continual review of mineral opportunities in Mauritania, it has taken a position in 2 large Sabkhas (salt pans) in the region of its Tiris Uranium Project with a view to exploring them for soda ash and other minerals.

Soda ash is the leach agent proposed for the Tiris project and if the source were confirmed it would provide significant benefits to the project economics.

The Sabkhas which are 165 km from Hippolyte are large on a relative basis covering an area of over 85 km2 (see Figure 2). Sabkha is an Arabic name for a salt-flat that has come into general use in sedimentology. They are also known as “Salars” in South America and generically as salt pans or flats. The valuable salts can occur in the Sabkha environment either in clays at or near surface or in brine reservoirs deeper in the lake sediments.

The location of the Sabkha between Aura’s Tiris project East and West tenements provide a favourable location should a source of soda ash (Na2CO3) be identified.

Initial sampling of the Amare lithium and soda ash prospect was undertaken during the Half-Year and assaying is underway.

Aura will continue to review other opportunities for similar mineral occurrences throughout the local region given the favourable conditions for the numerous Sabkhas close to its project areas.

TASIAST SOUTH GOLD PROJECT (Mauritania)

The Company announced on 27 June 2016 that it has secured rights to acquire 175 km2 covering two under-explored mineralised greenstone belts in Mauritania (see Figure 3). The areas lie along strike from Kinross’ giant Tasiast Gold Mine and from Algold’s Tijirit gold deposits. The two areas are currently held under exploration permit applications and are expected to be granted in the near future.

These highly prospective gold areas represent an excellent opportunity in lightly explored Archean greenstone belts and will leverage Aura’s extensive operating experience in this part of the world. The project is favourably located 200 km from Aura’s Nouakchott office, 60 km from the coast, and can be managed efficiently within the company’s existing management resources without distraction from Aura’s core uranium focus.

Aura’s Tasiast South Project area has the following attributes:

• Tenements over two lightly explored greenstone belts covering 175 km2.
• The +20 Moz Tasiast gold deposit is nearby on the same greenstone belt and highlights the potential for major deposits in the region (see Figure 3).
• $3m has been expended by the previous explorer on airborne geophysics, reverse circulation and air- core drilling, and sampling.
• Broad zones of gold mineralisation have been identified with strong similarities to the Tasiast Gold Mine mineralisation and alteration.
• No testing deeper than 150m with most previous holes less than 100m.
• High grade drill intersections have been reported by others in the district from both past and current programs, including one in progress with Algold Resources (TSX), which highlight the current interest and potential in these poorly tested belts.

Half-Year Aura continued to plan and assess the best approach to the exploration of these tenements.

Nickel and base metal potential

Previous exploration for gold on these permit areas also located strongly anomalous nickel values in  several areas, associated with ultramafic rocks (see Figure 4). In parts of the tenements high nickel values are associated with anomalous copper highlighting potential for nickel-copper sulphide mineralisation, as occurs also in the greenstone belts of Australia and Canada. At this stage, there has been no follow-up work carried out on these nickel targets.

Future work program and other opportunities

Next steps envisaged at Tasiast South are:

• Ground electrical geophysics to locate the strongest zones of disseminated sulphide development for drill targeting.
• Additional bedrock sampling by air- core or auger-drilling to better define the high nickel ultramafics and zones of copper/nickel for follow up drilling.
• Deep drill testing (RC and DD) of targets defined.

Aura’s timing for this work is dependent on granting of the permits and on financing however some of the work described is relatively low cost and may be funded from existing resources. Aura will also explore other financing options to progress this work plan including joint ventures, royalties and work-for-equity funding.

HAGGAN PROJECT (Sweden)

The Häggån project has an Inferred Resource of 803 million pounds of U3O8. Scoping studies previously completed by Aura have indicated that the Häggån Project has the potential be a very large low cost uranium producer.

Work continued regarding a community engagement for the Häggån Project.

The key aspects of the community liaison program are twofold:

• Recruitment of an appropriate representative and further the education and understanding of Aura’s project in those areas.
• Completion of an economic development study to outline the benefits of the project in terms of direct and indirect jobs, capital outlay and broader contribution to the local and regional economy.

Aura continues to press the Häggån project as a unique and strategic energy source in Europe which the European nuclear energy sector is beginning to realise can play an important role as a uranium source in the future.

The Company believes Häggån is a 5-7 year proposition as a development project and is scoping its work program around that time frame.

A program of 750m of diamond drilling in 3 holes is programmed for the first Quarter 2017 for geostatistical and resource upgrade purposes.

Uranium sector and price

The price of uranium has enjoyed improved sentiment and recovered from its recent lows in the face of producer cutbacks. The current price series is as follows:

• Spot Price - US$23.65/lb
• Mid Term - US$22.00/lb
• Long Term - US$30.00/lb

Key points of interest to note from the uranium sector have been:

• KazAtomProm stated it would cut output by 10%, equivalent to 2000t or 3 % of global supply, because of low prices.
• The Trump presidency may result in a more pro-nuclear stance by the US and policy shifts in the US under a new administration are likely to play an important role in the nuclear industry over the next few years.
• Over the next 2-3 years, many of the long-term supply contracts will expire requiring renegotiation at prices unlikely to be done at current midterm or long-term pricing

A key point worth repeating and highlighting is the lack of term contracting in 2013 and 2014 as shown in the chart below. This remains a key risk for utilities going forward and will need to be filled at some stage. This contracting phase will strongly impact the Long-Term price as evidenced in the chart below between 2004 and 2007.

CORPORATE

Mauritanides Conference - Mauritania

Aura Energy attended the Mauritanides conference in Nouakchott Mauritania in October 2017. The government sponsored bi-annual conference is the key resources conference in the country and is attended by the President, Prime Minister and Mines Minister.

Key points of the conference and trip were:

• Excellent company meetings with the Mines Minister demonstrating strong support for Aura’s activities in the country.
• The depth of resource industry involvement in the country including significant oil and gas activity.
• Recent success of Algold’s gold exploration and its significance to Aura’s gold properties

Subsequent events

During the course of February 2017, the Company secured the support of a number of option holders to advance its newly secured gold project in Mauritania. The option holders exercised 72,642,413 options over ordinary shares at an exercise price of 2.5 cents per option over ordinary share. The exercise of the options over ordinary shares has provided the Company with $1,816,060 to dedicate to the advancement of its gold projects and specifically, undertaking a detailed drilling campaign.

Condensed consolidated interim statement of financial position

As at 31 December 2016

	Note	31 DEC 2016 $	31 DEC 2015 $
Assets
Current assets
Cash and cash equivalents	8	3,432,754	317,758
Trade and other receivables	9	74,351	57,708
Other	10	43,594	43,625
Total current assets		3,550,699	419,091
Non-current assets
Exploration and evaluation	11	14,160,331	14,137,710
Property, plant and equipment		20,808	-
Total non-current assets		14,181,139	14,137,710
Total assets		17,731,838	14,556,801
Liabilities
Current liabilities
Trade and other payables	12	372,358	550,844
Provisions	13	160,992	165,251
Total current liabilities		533,350	716,095
Total liabilities		533,350	716,095
Net assets		17,198,488	13,840,706
Equity
Issued and paid-up capital	14	37,750,260	32,784,203
Reserves		890,935	1,029,542
Accumulated losses		(21,442,707)	(19,973,039)
Total equity		17,198,488	13,840,706

Condensed consolidated interim statement of profit or loss and other comprehensive income

For the six months ended 31 December 2016

	NOTE	6 MONTHS TO ‘31 DEC 2016	6 MONTHS TO ‘31 DEC 2015
Finance income		1,784	2,970
Other income		-	-
Administrative expenses		(324,543)	(367,165)
Depreciation expense		-	(1,603)
Employee benefits expense		(320,014)	(379,803)
Exchange fluctuation		(72,191)	(614)
Finance costs		-	(5,008)
Listing costs on AIM market		(683,121)	-
Share-based payments		(120,458)	(145,293)
Other		4,177	(20,742)
Loss before tax		(1,514,366)	(917,258)
Income tax benefit		-	140,000
Total profit/(loss) for the period after  tax		(1,514,366)	(777,258)
Other comprehensive income/(loss)		(237,156)	204,758
Total comprehensive  income/(loss)  attributable  to members of Aura Energy Limited		(1,751,522)	(572,500)
Earnings/(loss) per share attributable to members of Aura Energy Limited
Basic earnings/(loss) per share (cents)		(0.25)	(0.21)
Diluted earnings/(loss) per share (cents)		(0.25)	(0.21)

Condensed consolidated interim statement of cash flows

For the six months ended 31 December 2016

	NOTE	6 MONTHS TO ‘31 DEC 2016	6 MONTHS TO ‘31 DEC 2015
Cash flows from operating activities
Payments to suppliers and employees		(1,533,891)	(659,193)
Interest received		1,784	2,970
Interest and borrowing payments		-	(1,211)
Net cash from/ (used in) operating activities		(1,532,107)	(657,434)
Cash flows from investing activities
Exploration and evaluation payments		(253,339)	(719,772)
Acquisition of property, plant and equipment		(20,808)	-
Net cash from/ (used in) investing activities		(274,147)	(719,772)
Cash flows from financing activities
Share issues		5,129,719	860,870
Equity raising costs		(137,624)	(52,343)
Repayment of borrowings		-	(8,656)
Net cash from/(used in) financing activities		4,992,095	799,871
Net increase/(decrease) in cash and cash equivalents		3,185,841	(577,335)
Cash and cash equivalents at beginning of the period		317,758	943,011
Exchange fluctuation		(70,845)	(614)
Cash and cash equivalents at period end		3,432,754	365,062

Condensed consolidated interim statement of changes in equity

For the six months ended 31 December 2016

	SHARE CAPITAL $	SHARE-BASED PAYMENTS RESERVE $	OPTION-BASED PAYMENTS RESERVE $	TRANSLATION RESERVE $	ACCUMULATED LOSSES $	TOTAL $
Balance at 1 July 2015	31,311,988	-	398,924	502,328	(18,451,415)	13,761,825
Share issues	957,376	-	-	-	-	957,376
Equity raising costs	(52,343)	-	-	-	-	(52,343)
Exercise of options over ordinary shares	-	-	-	-	-	-
Vest of options over ordinary shares	-	-	-	-	-	-
Transfer to share-based payments reserve	-	34,253	-	-	-	34,253
Transfer to option-based payments reserve	-	-	145,293	-	-	145,293
Loss after tax for the period	-	-	-	-	(777,258)	(777,258)
Other comprehensive income/(loss) for the period	-	-	-	204,758	-	204,758
Balance at 31 December 2015	32,217,021	34,253	544,217	707,086	(19,228,673)	14,273,904
Balance at 1 July 2016	32,784,203	-	495,651	533,891	(19,973,039)	13,840,706
Share issues	5,157,183	-	-	-	-	5,157,183
Equity raising costs	(318,167)	-	-	-	-	(318,167)
Exercise of options over ordinary shares	127,041	-	-	-	-	127,041
Expiry of options over ordinary shares	-	-	(44,698)	-	44,698	-
Vest of options over ordinary shares	-	-	-	-	-	-
Transfer to share-based payments reserve	-	-	-	-	-	-
Transfer to option-based payments reserve	-	-	143,247	-	-	143,247
Loss after tax for the period	-	-	-	-	(1,514,366)	(1,514,36)
Other comprehensive income/(loss) for the period	-	-	-	(237,156)	-	(237,156)
Balance at 31 December 2016	37,750,260	-	594,200	296,735	(21,442,707)	17,198,488

TO VIEW THE FULL HALF YEARLY REPORT AS A .PDF PLEASE VISIT THE COMPANY WEBSITE:

http://www.auraenergy.com.au/announcements-2017.html

ENDS

For more information please visit www.auraenergy.com.au or contact the following:

Aura Energy Limited Peter Reeve (Executive Chairman)	Telephone: [phone] [e-mail]
WH Ireland Limited Adrian Hadden James Bavister	Telephone: [phone]
Yellow Jersey PR Limited Felicity Winkles Joe Burgess	Telephone:  [phone] [phone]

Aura Energy  is a dual-listed (ASX/AIM) uranium company focused on developing projects in Africa and Europe towards production. The Company has 100% ownership of a portfolio of prospective uranium projects.

Aura has a simple development approach as it looks to build itself into a cash-generative uranium producer in the near to mid-term.  Its immediate growth strategy is focused on development of its 49Mlbs Tiris uranium project in Mauritania ("Tiris"), a Feasibility Study of which is currently underway and expected to be completed in late 2017, with mine construction following. The Company is also advancing its longer-term 803Mlbs HäggÃ¥n uranium project in Sweden ("HäggÃ¥n"). In addition, the Company is exploring opportunities in gold, lithium and soda ash in Mauritania.