Quarterly Report

RNS Number : 8681Q

Aura Energy Limited

01 November 2021

 

 

  01 November 2021

Quarterly Report for the Period Ending 30 September 2021

KEY POINTS:

· The Company's shares recommenced trading on the ASX, with Aura continuing to fast track the low capex, low operating cost Tiris Uranium Project to near term production.

· Aura entered a US$10m Offtake Financing Agreement with Curzon in October 2021, with the funds to be used for mining working capital and commencement of production. The Agreement includes an additional up to US$10m facility by mutual consent. The potential maximum available under the Agreement is US$20m.

· Resource upgrade of 10% or 5.0 million lb U₃O₈ to the Company's Tiris uranium deposit in Mauritania, bringing the total JORC Resource to 56 Mlbs (at a 100 ppm U₃O₈ lower cut-off grade).

· Capital estimate update for Tiris to reflect 2021 input costs, with only a modest increase in the Capital Estimate.

· Updated DFS reconfirming Tiris as a low capital cost development opportunity.

· Stage 2 exploration underway at Tiris with the results from the Opportunity Review, Net Zero Emission Study, Water Drilling and Vanadium assays expected before the end of the 2021 calendar year.

· Two geophysical crews from gravity specialist, GeoFocus, were mobilised from South Africa to carry out detailed gravity surveying on all three of Aura's tenements.

· As announced on 1 April 2021, Aura is offering a fully underwritten 1 Loyalty Option Entitlement Rights Issue ("Options") for every 3 Shares held with the Record Date of 22 October 2021.   

Aura Energy Limited (ASX:AEE, AIM:AURA) ("Aura", the "Company") is pleased to provide an overview of activities for the period ending 30 September 2021 ("Quarter, "Reporting Period") to accompany the Appendix 5B.

To view the Appendix 5B Report, please click here: 

http://www.rns-pdf.londonstockexchange.com/rns/8681Q_1-2021-11-1.pdf

Commenting on the Quarter, Managing Director, Peter Reeve, said:   "The September 2021 Quarter was a monumental period for Aura, with the Company's shares relisting on the ASX on 23 September 2021, with Aura's share price and market cap rerating upon listing. During the Quarter, Aura also announced a resource upgrade of 10% bringing the total resource to 56 Mlbs, and with an updated capital estimate, we now have one of, it not the most current Definitive Feasibility Studies compared to our uranium peers."

"Although occurring outside the Reporting Period, in October 2021 Aura announced a US$10m Offtake Financing Agreement with Curzon, with the funds to be used for mining working capital and production commencement, complementing the Uranium Offtake Agreement executed with Curzon in January 2019.  The Agreement includes an additional up to US$10m facility by mutual consent. With the sentiment towards uranium and nuclear power shifting rapidly amongst investors, we see considerable potential to further expand our resource, production throughput and undertake further offtake finance agreements."

"With stage two exploration currently underway at Tiris, we look forward to releasing the results of the water drilling confirming the results from the 2019 campaign, as well as the results from the Opportunity Review, Net Zero Emission Study and Vanadium assays, which are expected before the end of the 2021 calendar year."

"We also continued to advance activities at the Tasiast South Gold Projects, with Two geophysical crews from gravity specialist, GeoFocus, mobilised from South Africa to carry out detailed gravity surveying on all three of Aura's tenements."

"I would like to thank shareholders for their ongoing support to date and we look forward to an exciting period to come as we continue to advance Tiris to near term production and capitalise the rapidly growing demand for carbon free energy."

Aura Energy Recommences Trading on the ASX

On 23 September, the Company's shares (ASX:AEE) recommenced trading on the ASX, with Aura continuing to fast track the low capex, low operating cost Tiris Uranium Project ("Tiris", "Project") to near term production.  Upon relisting, Aura's shares and market capitalisation rerated, driven in part by Sprott Asset Management's aggressive buying of physical uranium supplies.

Offtake Financing Agreement with Curzon

As an after balance date event, Aura entered a US$10m Offtake Financing Agreement with Curzon in October 2021, with the funds to be used for mining working capital and production commencement, complementing the Uranium Offtake Agreement executed with Curzon in January 2019. The Agreement includes an additional up to US$10m facility by mutual consent.

The Agreement complements the Uranium Offtake Agreement executed with Curzon in January 2019[1], for the sale of 800,000 pounds or uranium production at fixed prices, 750,000 pounds at market linked pricing, and a further 1.05 million pounds of uranium production available to Curzon as optional volumes at fixed and market pricing, with the average price above US$44 per pound U₃O₈. The January 2019 agreement is over a seven-year period starting from the commencement of production.

With the original production at approximately 1 million pounds of U₃O₈ pa, the fixed pricing volumes of the original 2019 offtake agreement account 150,000 pounds of U₃O₈ pa.

This provides the ability for Aura Energy to undertake further offtake finance agreements and be exposed to potentially higher uranium prices.

Tiris Uranium Project - Resource Upgrade

During the Quarter, Aura announced a Resource upgrade of 10% or 5.0 million lb U3O8 to the Company's Tiris uranium deposit in Mauritania, bringing the total JORC Resource to 56 Mlbs (at a 100 ppm U₃O₈ lower cut-off grade).   Aura Energy is the operator and has an 85% interest in the Zero Emission Tiris Uranium Project.

The Resource Upgrade follows Aura commissioning a new resource estimate on the Sadi South Zone to incorporate drillholes not included in earlier resource estimates. This resulted in a 5.4 Mlbs U₃O₈ increase in the Tiris resource of which 2.4 Mlbs is classified as Indicated Resource with the remainder classified as Inferred Resource.

Prior to the Resource Upgrade, Tiris held a resource of 50.6 Mlbs at a grade if 254 ppm U₃O₈ (at a 100 ppm U₃O₈ lower cut-off grade), including 38.4 Mlbs at 343 ppm U₃O₈ (at a 200 ppm U₃O₈ lower cut-off grade)[2]. 

Within this resource Aura has defined Proven and Probable Reserves of 8.1 Mlb U₃O₈ at an average grade of 336 ppm U₃O₈ and completed a Definitive Feasibility Study.[3]

Updated Capital Estimate and DFS

During the Reporting Period, Aura updated the capital estimate for Tiris to reflect 2021 input costs, with the Company confirming that despite significant changes in global economies due the COVID-19 pandemic, the Tiris Capital Estimate remains robust and within the error and sensitivity margins of the original estimate. 

Since completion of the DFS in 2019, global economic conditions have changed, with increases in steel, freight and other project development costs driven by the COVID-9 pandemic.  Subsequently, Aura has updated the capital costs for the DFS to ensure that in the two years since completion, the input costs remain valid.

To understand the impact of changing global conditions on the capital cost estimate, Aura commissioned Mincore Engineers Pty Ltd to provide the update to the Tiris capital estimate.  This has provided the opportunity for Aura to progress the project with confidence that DFS estimates are robust and up to date.

Subsequent to the capital estimate update, Aura released an updated DFS reconfirming the Tiris Uranium Project as a low capital cost development opportunity.

Stage 2 Exploration

In July 2021, Aura Energy commenced Stage 2 exploration at Tiris, with results expected before the end of the 2021 Calendar Year.

The key results expected in this timeframe are:

· Detailed results of the Tiris Opportunity Review with several items being considered to lower operating costs for the project

· Completion and outcomes of the Net Zero emission study by Wood PLC

· Water drilling results continuing the 2019 findings

· Potential positive impact on Tiris operating cost from vanadium by-product recovery

During the Quarter, the Company commenced water drilling at Tiris and Aura is confident that the program will continue the previous results from Water Drilling undertaken by Aura in 2019.  Substantial water located within the Oued el Foule Depression in the first drilling program will ensure production can be expedited.

Following a period of initial geophysical evaluation, in 2019 Aura conducted a significant and broad based round of water drilling at Tiris, which reported significant success. Of 5 targets tested, 2 reported significant water flows, with the current follow up water drilling campaign designed to reconfirm that significant water exists within the Oued el Foule Depression, as discovered in a number of the deeper drillholes during evaluation drilling into the Tiris uranium mineralisation.

To view Image 1 - Water drilling underway at Tiris, please click here:

http://www.rns-pdf.londonstockexchange.com/rns/8681Q_2-2021-11-1.pdf

Gravity Survey Results for Tasiast South

During the Quarter, two geophysical crews from gravity specialist, GeoFocus, were mobilised from South Africa to carry out detailed gravity surveying on all three of Aura's tenements, with the data to allow better definition of geology, the identification of structures likely to be of relevance to gold deposition and the possibility of direct detection of sulphide mineralisation on the nickel/cobalt targets.

In total 6,643 stations were surveyed, with the program specifications designed and activities overseen by Newexco, geophysical consultants based in Perth, with extensive experience in Archean geophysics. 

The gravity data allows better definition of geology, the identification of structures likely to be of relevance to gold deposition and the possibility of direct detection of sulphide mineralisation on the nickel/cobalt targets.

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.

Country / Tenement number	Name	Grant / Application date	Expiry date	km2	Holder	Equity
Mauritania
2491C4	Ain Sder	8/02/2019	Exploitation Licence	207	Tiris Resources SA	85%
2492C4	Oued El Foule	8/02/2019	Exploitation Licence	190	Tiris Resources SA	85%
561	Oum Ferkik	16/04/2008	Subject to exclusivity negotiation	60	Aura Energy Limited	100%
2457B2	Hadeibet Belaa	2/04/2019	2/04/2022	41	Tiris International Mining Co.	100%
2458B2	Touerig Taet	2/04/2019	2/04/2022	134	Tiris International Mining Co.	100%
Sweden
2007-243	Haggan nr 1	28/08/2007	28/08/2022	18	Vanadis Battery Metals AB	100%
2018-9	Mockelasen nr 1	21/01/2019	21/01/2022	18	Vanadis Battery Metals AB	100%
2018-7	Skallbole nr 1	20/01/2019	20/01/2022	8	Vanadis Battery Metals AB	100%

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

This ASX Release was authorised by the Aura Energy Board of Directors.

For Further Information, please contact:

Peter Reeve Managing Director & CEO Aura Energy Limited [e-mail]	Jane Morgan JMM Investor & Media Relations [e-mail] [phone]
SP Angel Corporate Finance LLP (Nominated Advisor and Joint Broker) Ewan Leggat Caroline Rowe Telephone: [phone]	WH Ireland Limited (Joint Broker) Adrian Hadden Andrew de Andrade Telephone: [phone]

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

Aura Energy is an Australian based minerals company that has major polymetallic and uranium projects with large resources in Europe and Africa. The company has rapidly grown by acquiring new projects in areas with known polymetallic and uranium occurrences including Sweden and greenfield projects in Mauritania    

The Company is now focused on the Tiris Uranium Project, a major greenfields uranium discovery in Mauritania, with 49 Mlb U ₃ 0 ₈   in current resources from 66 million tonnes @ 334   ppm U ₃ 0 ₈ .    

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.    

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.  

 

Annexure A - Tiris Resource Inventory as at 27 August 2021[4]

Cut-off U3O8 g/t	Resource	Class	Tonnes (Mt)	U3O8 (g/t)	U3O8 (Mkg)	U3O8 (Mlb)
	Zone
100	All	Measured	10.2	236	2.4	5.3
100	All	Indicated	29.0	222	6.4	14.2
100	All	Total M&I	39.2	226	8.8	19.5
100	All	Inferred	61.1	267	16.3	36.0
100	All	All	100.3	254	25.2	55.5

Note: Totals may not add due to rounding. 

Annexure B - Tiris Reserve Estimate as at 18 August 2021[5]

Description	Mt	U3O8 (ppm)	U3O8 (Mlb)
Proved	4.1	339	3.1
Probable	6.8	333	5.0
Total	10.9	336	8.1

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.

 

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[1]   Released 29 January 2019

[2]   Refer Aura ASX announcement dated 30 April 2018 "Tiris Resource Upgrade Success"

[3]   Refer ASX announcement dated 29 July 2019: "Tiris Uranium Definitive Feasibility Study Completed.

[4] Released 27 August 2021 "Tiris Uranium Project - Resource Upgrade of 10%" 

[5] Released 18 August 2021 "Tiris Uranium Project DFS Update"

 

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