Zero Emission Tiris Uranium Project DFS Update

RNS Number : 0092J

Aura Energy Limited

18 August 2021

 

 

       18 August 2021

Zero Emission Tiris Uranium Project Definitive Feasibility Study - Updated Capital Estimate

KEY PROJECT OUTCOMES OF THE STUDY:

· Low capital cost of US$74.8 million

· Low C1 cash cost of US$25.43/lb U₃O₈

· All-In Sustaining Cost (AISC) of US$29.81/lb U₃O₈

· Production is 12.4 Mlbs U₃O₈ over 15 years

· Payback period is 4 years

· Maiden Ore Reserve Estimate for Tiris is 10.9 Mt @ 336 ppm U₃O₈

KEY FINANCIAL OUTCOMES OF THE STUDY:

· Total project After   Tax cash flow is US$214 million (A$305 million)

· Average After Tax cash flow of US$17.1 million pa (A$24.4 million)

· Project IRR of 22%

PROJECT UPSIDE

· Potential for Reserve addition via conversion from Global Resource

· Potential for Resource addition in known mineralised areas

· Exploration of known targets in project area

· Vanadium production from leach solution

· 3 Mlb U₃O₈ pa expansion case potential

· Optimisation of reagent use

· Optimisation of beneficiation in production to increase throughput

· Production optimisation of current Reserve Estimation

IMPLEMENTATION

· Fully Permitted for development[1]

· Exploitation Licence granted

· Environment Approval granted

· Competitive uranium off-take contract in place

· Export Credit Agency Finance achieving a very promising response

· Mincore Engineering acted as overall Project Engineer

· Simulus Engineering performed Leach Plant Engineering

· Adelaide Control Engineering (ACE) - U₃O₈ recovery and packaging

PEER COMPARISON

· Tiris has one of the lowest uranium development capital costs of the current uranium projects

· Robust capital development estimate with 85% of cost estimated from direct supplier quotes

· Development capital cost very competitive versus LOM capital cost for in-situ leach projects with repeat development capital

· Low development cost enables rapid development relative to peers

· Tiris' AISC is among the lowest in the world

· Many peer companies quote Pre-Tax project financials

Aura Energy Limited (AEE; ASX, AURA; AIM) ("Aura", the Company ") is pleased to advise that the Tiris Uranium Definitive Feasibility Study (DFS) capital update has been completed (ASX Release: Capital Estimate Update - Zero Emission Tiris Uranium Project, 18 August 2021) and has confirmed the Tiris Uranium Project as a low capital cost development opportunity.

Since completion of the DFS in 2019, global economic conditions have changed, with increases in steel, freight and other project development costs.  Subsequently, Aura has updated the estimated capital costs for the DFS, to ensure that in the two years since completion, the input costs along with currency assumptions remain valid.

Aura Energy, Managing Director and CEO, Peter Reeve, commented:  "With the updated capital estimate recently completed for the zero emission Tiris Uranium Project, we are pleased to present the updated Definitive Feasibility Study.  Tiris remains as a highly robust uranium project, which the company aims to capitalise on as the uranium market continues to recover.  With the DFS now updated with 2021 capital figures, Aura is well positioned to continue its discussions with global financiers in relation to both debt and equity funding arrangements.  We now look forward to fast tracking Tiris into production, as the world shifts towards a decarbonised energy system."

"In the current uranium market environment, a key attribute of any uranium development project is the capital cost of development. Aura has strived through the entire DFS to maintain this cost at the lowest level possible whilst retaining a robust development design. With the $US74.8 million capital defined, with 85% of the capital estimate from supplier quotes, Aura now stands among its peers as having one of the lowest, if not the lowest, all in life of mine capital of any of the currently proposed uranium development projects".

"A number of very good in-situ leach projects state low upfront capital, however, the 'repeat development capital' required in many of these projects in their early years needs to be considered as development capital. Aura in many instances competes very well with these projects".

"The capital figure is exceptionally important as in tough markets it can impact upon the investability of the project and Tiris' small footprint and low capital cost makes this project poised for quick development when financing can be achieved. Aura has spoken of the 'building blocks to cashflow' and the completion of the DFS sets another of those building blocks in place and puts Aura on a path for producer status and cashflow."

"Additionally, the All-In Sustaining Cash Cost of $US29.81/lb U₃O₈ is extremely competitive when compared to our uranium development peers. The benefits of shallow mining and the beneficiation stage in the process, which leads to a small project footprint, have shown to being positive for the projects operating cost".

Capital Cost

The updated Tiris Project capital cost is US$74.8 million.

Engineering company, Mincore, provided the updated capital cost estimate for the Tiris Project as specified in ASX Release: Capital Estimate Update - Zero Emission Tiris Uranium Project, 18 August 2021. This includes the scope of facilities and services required to design, purchase and construct the entire project, up to practical completion and handover to operations. 

Table 1: Tiris Project Capital Cost Summary

Description	Cost (U$M)
Mining (contract mining assumed)	0.00
Process Plant	$45.10
Infrastructure	$8.58
EPCM	$6.57
Owner's cost	$3.00
Contingency	$4.92
Total Capital Cost	$74.80

An exhaustive in-country engineering review was conducted including all infrastructure needs, particularly the road infrastructure to site. Of the 680 km road from Zouerate to Tiris, only 2km will require substantial roadworks.

Significantly, 85% of the capital cost for the Tiris Project has been sourced from direct supplier quotes. As a result of this thorough estimating approach, Aura is confident that the capital cost estimate for Tiris Uranium Project is robust.

No direct mining capital costs are outlined as infrastructure to support the mining operations is included in the infrastructure numbers, and there is no pre-strip required and mining costs are based direct supplier quotes from a number of mining contractors with all mobile equipment costs all included in the operating cost estimation received.

Operating Cost

The operating cost estimate is summarised in the table below. 

Table 2: Tiris Project Operating Cost Summary

Category	US$/lb U3O8
Contract Mining	7.16
Labour	3.68
Power	4.57
Reagents	3.95
Maintenance	2.28
G&A	3.80
Total cash cost (C1)	25.43
All In Sustaining Cost (AISC)	29.81

The C1 cash cost will be US$25.43/lb U₃O₈.

The All-In Sustaining Cost (AISC) will be US$29.81/lb U₃O_8.

The AISC is inclusive of royalties, Life of Mine (LOM) sustaining capital, insurances and product transport.  These costs have been estimated as an average of annualised expenditure. 

Project Outcomes Summary

Table 3: Project Outcomes Summary

	Key Metric	DFS
Resource	Life of Mine (LOM)	15 Years
	Beneficiation Plant ore throughput (Design)	1.25 Mtpa
	Process Plant ore throughput	0.16 Mtpa
	ROM uranium grade (LOM)	364 ppm U3O8
Production	Uranium Metallurgical Recovery	86.1%
	Average Annual uranium production	823,000 lb U3O8
	LOM uranium production	12.35 Mlb U3O8

Financial Outcomes Summary

Table 4: Financial Outcomes Summary

	Key Metric	US$		A$
Capital	Process, plant, infrastructure, indirects	70.1 M		100.1 M
	Contingency	4.7 M		6.8 M
	Total Capital	74.8 M		106.9 M
Operations	Exchange rate (USD:AUD)	0.70
	C1 Cash operating cost ($/lb U3O8)	25.43		36.33
	AISC operating cost ($/lb U3O8)	29.81		42.56
Project Financials	Assumed price (baseline) ($/lb U3O8)	60		86
	Project NPV8 (incl Royalties and tax)	79.9 M		114 M
	Project IRR (incl Royalties and tax)	22%
	Cashflow - Total (after-tax)	214 M		305 M
	Cashflow - Annual (after-tax)	17.1 M pa		24.4 M pa
	Project NPV8 (incl Royalties, pre-tax)	106 M		151 M
	Project Cashflow - Total (pre-tax)	275 M		393 M
	Project Cashflow - Annual (pre-tax)	24.5 M pa		33 M pa
	Project payback from start-up	4 years

Uranium Price Sensitivity

The table below outlines the project financials at both US$60/lb U₃O₈ and US$50/lb U₃O_8.

Table 5: Project Financials

Item	Uranium Price
	US$60/lb U3O8	US$50/lb U3O8
Project cashflow total (pre-tax)	US$275 M A$393 M	US$169 M A$241 M
Project cashflow - per annum (pre-tax)	US$24.5 M A$33.4 M	US$17.4 M A$24.9 M
Project cashflow total (after-tax)	US$214 M A$305 M	US$132 M A$189 M
Project cashflow - per annum (after-tax)	US$18.6 M A$27.4 M	US$13.4 M A$19.4 M
NPV8 (including royalties, pre-tax)	US$106 M A$151 M	US$56 M A$80 M
NPV8 (including royalties, after-tax)	US$79.9 M A$114 M	US$36 M A$51.4 M

Water

Of four water sourcing options identified by hydrological consultants, Aura's water search and development activities have focussed on the closest source, the Oued El Foule Depression, an extensive drainage system, the central axis of which is less than 20 km from the Tiris plant site.

Aura has undertaken a significant program of water study and review which identified a number of major structures likely to host water and included a program of ground geophysics over 24 structural targets within 50 km of the proposed plant. 15 of the most promising targets have been selected for drilling and testing is underway.

On one of these structures identified by Aura, drilling successfully located water in two bores.  Of four holes drilled in the area, two successfully located good volumes of water, with one producing 15,000 litres per hour. The 50% strike rate in drilling bodes well for the location of additional water sources in the same geology and indicates a strong likelihood that the current drilling program will locate additional water supply for the relatively low water requirement of the Tiris Project. 

The water testing and development program will continue for a period of time beyond the completion of the DFS and during construction.

Reserve Estimate

The Ore Reserve estimate was generated by Mining Plus. The overall project financial model was prepared by Aura using inputs from the mining schedule physicals and the cost model.  Detailed processing, tailings disposal, power, water, camp infrastructure and logistics, and other costs were also developed as part of the Feasibility Study. Mining Plus reviewed the cash flow model with Aura to ensure that the project has a positive cash flow outcome, and this has been confirmed.

The declared Ore Reserve, at a 175 ppm U₃O₈ cut off is shown in Error! Reference source not found.6.

Table 6: Ore Reserve

Description	Mt	U3O8 (ppm)	U3O8 (Mlb)
Lazare North
Proved	0.7	354	0.6
Probable	4.4	332	3.2
Lazare South
Proved	1.5	342	1.1
Probable	0.7	340	0.5
Hippolyte
Proved	1.9	331	1.4
Probable	1.7	334	1.3
Total
Proved	4.1	339	3.1
Probable	6.8	333	5.0
Total	10.9	336	8.1

The Ore Reserve was generated from the Mineral Resource Estimate produced by H&S Consultants (Sydney) with the appropriate modifying factors to apply for mining dilution. This Resource model was used in an open pit optimisation process to produce a range of pit areas using operating costs and other inputs derived from previous studies. Mining costs were built up from estimates derived from equipment supplier and mining contractor submissions and applied to a detailed mine schedule.

The Ore Reserve is based on information complied by the following:

· Revenue prices, based on historical averages and forward estimates, based on Offtake Agreement with Curzon Resources provided by Aura.

· Processing recoveries based on the geometallurgical model developed by Aura.

· Mineral Resource estimate, H&S Consultants, 1May 2018.

· Pit optimisation and mine design completed by Mining Plus.

· Capital costs, Mining Plus, Mincore, Simulus Engineers, Adelaide Control Engineers (ACE) and Aura.

· Operating costs, Mining Plus, Mincore, Simulus Engineers, ACE and Aura.

Vanadium Potential

Vanadium occurs with uranium in carnotite, the host mineral for uranium in the Tiris Project as potassium uranium vanadate (K₂(UO₂)₂(VO₄)₂·3H₂O). Vanadium hosted with carnotite is leached alongside uranium in the Tiris extraction circuit. Aura has conducted preliminary evaluation on the feasibility of vanadium recovery from solution. The Tiris project value, which is driven by low operating and development capital costs, would benefit further with vanadium recovery which is considered technically achievable.

Vanadium occurs in the Tiris ore at a grade of 330 ppm V₂O₅[2] , a similar concentration to that of U₃O₈. Approximately half of this vanadium occurs within the uranium host mineral carnotite

Uranium Market

Aura continues to monitor the uranium market with the assistance of its advisors.

Aura has long maintained that the return to the Long-Term Contracting market by utilities will be a key driver in sentiment for uranium and strongly impact the uranium price. Our UK based advisors note an increasing focus from utilities on the low level of contract coverage in both 2021 and 2022. There is potential for near term improved market conditions should this level of contracting be increased.

Comparison with 2019 Definitive Feasibility Study

In 2019 Aura released a Definitive Feasibility Study on the Tiris Uranium Project.  In general, the results of the DFS remain unchanged and the current update reflects the price inflation between 2019 and 2021.  In this time significant global economic upheaval due to the COVID-19 pandemic has occurred and Aura determined that it was relevant to fully understand the potential impact of these changed conditions on project implementation.

The comparison of the 2021 DFS Capital cost estimate with the 2019 DFS showed an increase of 19% on a USD basis. This is a good result given it remains within both the estimate accuracy levels and base sensitivity levels used in project evaluation.

Table 7: Comparison of DFS 2019 and 2021 CAPEX estimate. 

Description	DFS 2019	DFS update 2021	Variation
	US$/M	US$/M	%
Mining	0.00	0.00	0.00
Process Plant	26.3	39.1	39%
Infrastructure	18.9	17.6	-7%
EPCM	4.45	4.9	10%
Owner's cost	8.2	9.9	21%
Contingency	4.30	4.8	11%
Total Capital Cost	62.94	74.8	19%

Cautionary Statement

This report may contain some references to forecasts, estimates, assumptions and other forward-looking statements. Although Aura believes that its expectations, estimates and forecast outcomes are based on reasonable assumptions, it can give no assurance that they will be achieved.

They may be affected by a variety of variables and changes in underlying assumptions that are subject to risk factors associated with the nature of the business, which could cause actual results to differ materially from those expressed herein.

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 [phone]	WH Ireland Limited (Joint Broker) Adrian Hadden James Sinclair-Ford [phone]

Appendix

Glossary of terms

Set out below are key terms referred to in the ASX announcement for the Resource Estimate

Carnotite  is a hydrated uranium, vanadium and potassium oxide with the mineral formula  K₂(UO₂)₂(VO₄)₂·3H₂O and approximately 53% of carnotite by weight is uranium .

Competent Person  is a minerals industry professional who is a Member or Fellow of The Australasian Institute of Mining and Metallurgy, or of the Australian Institute of Geoscientists or of a Recognised Professional Organisation, as included in a list on the JORC and ASX websites.  A Competent Person must have a minimum of five years relevant experience in the style of mineralisation or type of deposit under consideration and in the activity which that person is undertaking;

Cut-off grade  the lowest grade, or quality, of mineralised material that qualifies at economically mineable and available in a given deposit;

Gamma logging  a method of estimating uranium concentration in a drill hole by measuring radioactivity emitted by the mineralisation

Grade  any physical or chemical measurement of the characteristics of the material of interest in samples or product;

g/t  grams per tonne (where 1 gram per tonne = 1 ppm)

Indicated Resource  is that part of a Mineral resource for which  quantity, grade (or quality), densities, shape and physical characteristics are estimated with sufficient confidence and detail to support mine planning and evaluation of economic viability of the deposit.

Geological evidence is derived from adequately detailed and reliable exploration, sampling and testing gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes and is sufficient to assume geological and grade (or quality) continuity between points of observation where data and samples are gathered;

Inferred Resource  that part of a Mineral Resource for which quantity and grade (or quality) are estimated on the basis of limited geological evidence and sampling.  Geological evidence is sufficient to imply but not verify geological and grade (or quality) continuity.  It is based on exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes;

JORC  the Australasian Code for the Reporting of Exploration Results, Mineral Resources and Ore Reserves, as published by the Joint Ore Reserves Committee of The Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Minerals Council of Australia;

JORC 2012  the 2012 edition of the JORC Code

LBS  pounds (where 2.2046 pounds = 1 kilogram)

Measured Resource    is that part of a Mineral Resource for which 

  quantity, grade (or quality), densities, shape   

  and physical characteristics are estimated

   which confidence sufficient to support detailed

   mine planning and final evaluation of the

   economic viability of the deposit.  Geological

   evidence is derived from detailed and reliable

   exploration, sampling and testing gathered

   through appropriate techniques from locations

   such as outcrops, trenches, pits, workings and drill holes and is sufficient to confirm geological and grade (or quality) continuity between points of observation where data and samples are gathered;

Mineral Resource  a concentration or occurrence of material of economic interest in or on the earth's crust in such form and quantity that there are reasonable and realistic prospects for eventual economic extraction.  The location, quantity, grade, continuity and other geological characteristics of a Mineral Resource are known, estimated from specific geological evidence and knowledge, or interpreted from a well-constrained and portrayed geological model;

Mlb  million pounds avoirdupois;

Mt  Million tonnes;

pmm  parts per million by weight;

Radioactive equilibrium  is the condition in which a radioactive substance and its radioactive decay products have attained such proportions that they all disintegrate at the same numerical rate and therefore maintain constant proportions. In geologically young uranium deposits, radioactive decay products may not have

attained equilibrium concentrations. 

In this situation gamma radiation used to measure uranium concentration, which is emitted principally by the radioactive daughter products rather than by uranium itself, will underestimate uranium concentration;

U₃O₈  uranium oxide.

Competent Persons

The Competent Person for the information in this report that relates to Tiris Mineral Reserves is based on information compiled and reviewed by Mr Andrew Hutson, a Competent Person who is a Fellow of the Australian Institute of Mining and Metallurgy (AusIMM) and a full-time employee of Mining Plus Pty Ltd. Mr Hutson has sufficient experience which is relevant to the style of mineralisation and type of deposits under consideration and to the activity which he has undertaken to qualify as a Competent Person as defined in the JORC Code 2012. Mr Hutson has no economic, financial or pecuniary interest in the company and consents to the inclusion in this 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 aggregating the 2018 and 2011 resource estimates is Mr Neil Clifford.  The information in the report to which this statement is attached that relates to drill hole data and to aggregation of the resource estimates 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.  This qualifies 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 an independent consultant to Aura Energy.  Mr Clifford is a Member of the Australasian Institute of Mining and Metallurgy (AusIMM). 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.

The Competent Person for the Tiris Metallurgical Testwork is Dr Will Goodall. The information in the report to which this statement is attached that relates to the testwork is based on information compiled by Dr Will Goodall. Dr Goodall has sufficient experience that is relevant to the testwork program and to the activity which he is undertaking. This qualifies Dr Goodall as a Competent Personas defined in the 2012 edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Dr Goodall is a Member of The Australasian Institute of Mining and Metallurgy (AusIMM). Dr Goodall consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

1.1  Section 4 Estimation and Reporting of Ore Reserves

(Criteria listed in section 1, and where relevant in sections 2 and 3, also apply to this section.)

Mineral Resource estimate for conversion to Ore Reserves	· Description of the Mineral Resource estimate used as a basis for the conversion to an Ore Reserve. · Clear statement as to whether the Mineral Resources are reported additional to, or inclusive of, the Ore Reserves.	· The Lazare and Hippolyte Mineral Resource was provided to the ASX 30th April 2018 for the Tiri Project and forms the basis of this Ore Reserve. The Mineral Resource update was reported in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves, (JORC Code 2012) and validated by H&S Consultants Pty Ltd. · The Mineral Resources are inclusive of the Ore Reserves.
Site visits	· Comment on any site visits undertaken by the Competent Person and the outcome of those visits. · If no site visits have been undertaken indicate why this is the case.	· Andrew Hutson of Mining Plus (Competent Person) has not visited the site. Due to the small scale of the project, the low complexity of mining and the time required to visit the site within the timeframe of the project a site visit was not warranted. · Andrew Hutson as worked for a number of uranium mining operations including one of similar mineralogy, mining and processing methodologies.
Study status	· The type and level of study undertaken to enable Mineral Resources to be converted to Ore Reserves. · The Code requires that a study to at least Pre-Feasibility Study level has been undertaken to convert Mineral Resources to Ore Reserves. Such studies will have been carried out and will have determined a mine plan that is technically achievable and economically viable, and that material Modifying Factors have been considered.	· The Ore Reserve estimate was based on the Feasibility Study (FS) for the Tiris Project on data built from the PFS and updated from the Definitive Feasibility Study (DFS) due for completion in the July 2019. · Financial modelling completed to support this Ore Reserve estimate is based on the FS and this modelling shows that the Ore Reserve is economically viable at U3O8 metal prices supported by consensus long term contract uranium price scenarios in the range of US$40-50/lb U3O8.

Cut-off parameters	· The basis of the cut-off grade(s) or quality parameters applied.	· The cut off grade used to determine ore tonnes is 175 ppm U3O8
Mining factors or assumptions	· The method and assumptions used as reported in the Pre-Feasibility or Feasibility Study to convert the Mineral Resource to an Ore Reserve (i.e. either by application of appropriate factors by optimisation or by preliminary or detailed design). · The choice, nature and appropriateness of the selected mining method(s) and other mining parameters including associated design issues such as pre-strip, access, etc. · The assumptions made regarding geotechnical parameters (eg pit slopes, stope sizes, etc), grade control and pre-production drilling. · The major assumptions made and Mineral Resource model used for pit and stope optimisation (if appropriate). · The mining dilution factors used. · The mining recovery factors used. · Any minimum mining widths used. · The manner in which Inferred Mineral Resources are utilised in mining studies and the sensitivity of the outcome to their inclusion. · The infrastructure requirements of the selected mining methods.	· Aura Energy proposes to use conventional mining methods employing backhoe excavators and dump trucks to expose and recover the ore. The mining method proposed is utilised world wide and is low risk. No drilling and blasting of the ore over overlying materials is planned due to the unconsolidated nature of the materials. · Due to the shallow nature (<5m) and the short time which the mining voids are open before backfilling no pit slope geotechnical work was required. · Only Proved and Probable Ore Reserves are used as ore within the mine production schedule and financial modelling. Inferred Mineral Resource for the purpose of the Ore Reserve estimate is treated as waste which has been economically carried by the Ore. · The mine production schedule assumes effective operation of the mining fleet and is based on realistic utilisation estimates · The geological block models used as basis for Ore Reserve are MIK recoverable resource models and as such no additional mining dilution or recovery factors have been added · Pit optimisations were carried out using Daussalt Whittle software. Whittle was also used to analyse the sensitivity of the resource models over variations of -30% to + 30% to the following parameters in order to define the effects on project ore tonnage, total tonnes mined, contained metal and undiscounted cash flow; o  Mining cost o  Uranium price o  Processing cost o  Plant recovery

Metallurgical factors or assumptions	· The metallurgical process proposed and the appropriateness of that process to the style of mineralisation. · Whether the metallurgical process is well-tested technology or novel in nature. · The nature, amount and representativeness of metallurgical test work undertaken, the nature of the metallurgical domaining applied and the corresponding metallurgical recovery factors applied. · Any assumptions or allowances made for deleterious elements. · The existence of any bulk sample or pilot scale test work and the degree to which such samples are considered representative of the orebody as a whole. · For minerals that are defined by a specification, has the ore reserve estimation been based on the appropriate mineralogy to meet the specifications?	· The metallurgical process proposed is conventional beneficiation with heated alkaline uranium leach and ion exchange. · All metallurgical processes proposed are well tested technology and appropriate for the styles of mineralisation. · Extensive metallurgical test work has been undertaken and included: o  Material characterisation mineralogy (ANSTO Minerals) o  Geometallurgical testing o  Scrubbing tests (AMML) o  Screening and beneficiation tests (AMML) o  Diagnostic leaching (ANSTO Minerals) o  Rheological characterisation of leach feed and post-leach slurries. (Rheological Consulting Services) o  Ion exchange test work and modelling (ANSTO Minerals) o  Sodium Diuranate (SDU) precipitation and dissolution. (ANSTO Minerals) o  UOC precipitation and product characterisation (ANSTO Minerals) o  Rotary scrubbing and Derrick screening pilot study. (Mintek, South Africa) o  Steady state simuluation (ANSTO Minerals, Aura Energy, Simulus) · Metallurgical domaining was defined based on two geometallurgical studies on spatially representative trench samples from the Hippolyte, Lazare North and Lazare South Resources.  Geometallurgical domains were define

		based on uranium upgrade factor at target screen cut size of 150um and Sulphate mineral rejection factor. · Uranium recovery between 84.6% and 86.6% was achieved, dependent on geometallurgical domain. · Deleterious minerals were identified as gypsum (CaSO4.2H2O) and Celestine (SrSO4).  These minerals were monitored in geometallurgical domaining and included in domain definition parameters to manage impact on process.  Clay minerals were also identified as potentially deleterious and monitored through inclusion of particle size distribution definitions in geometallurgical domaining.  Results of metallurgical test work were undertaken in a staged approach with a focus on assessment of process variability.  Bulk bench scale assessment of beneficiation and leaching was undertaken on 120-150kg composite samples representative of geometallurgical domains scheduled for the first 6 years of operation. undertaken in a staged approach with a focus on assessment of process variability.  Bulk bench scale assessment of beneficiation and leaching was undertaken on 120-150kg composite samples representative of geometallurgical domains scheduled for the first 6 years of operation...  The geometallurgical domain composite samples on which these metallurgical results are based is from Aura's trench sampling program completed in 2018

		across the Lazare North and Lazare South Resources. (ASX release: Quarterly report June 2018 and Appendix 5B, 31st July 2018).  Trench locations were selected to correspond to diamond drill (DD) locations from 2017 drilling program (ASX Release: Tiris Resource upgrade success, 30 April 2018) as reported in ASX release: Quarterly report June 2018 and Appendix 5B, 31st July 2018.  A total of 11 trenches were excavated (8 Lazare South and 3 Lazare North) to a depth of 4m.  Trenches were oriented west to east and sampling was undertaken by channel sampling of north and south walls at 0.5m depth intervals.  Interval samples were not split on site.  Trench interval samples were split at Aura Energy's Nouakchott laboratory by rotary splitter divider (RSD).  A minimum 2kg sub sample was collected for assay, a 1kg sub sample was collected for geometallurgical test work, a 2kg sample was collected for reference and the remainder was stored as inputs for bulk metallurgical composite preparation.  Given the fine-grained nature of the uranium minerals these sample sizes are appropriate.  Sub samples for assay were sent to ALS Minerals, Nouakchott where they were crushed by jaw crusher to -12mm and 1kg was riffle split for pulverising to +85% passing 75 microns.  An c. 100g split was bagged and sent for analysis by pressed pellet XRF.

		Previous analysis comparing different analytical methods (XRF, ICP, DNC) had indicated that XRF is an accurate method on this material, if an x-ray band is selected for measurement that is not affected by the presence of strontium, and this was done.  This method will measure total uranium.  A sub-split of assay samples was prepared by ALS Laboratories Nouakchott by Method Prep 22 (Crush to 70% less than 6mm, pulverize entire sample to better than 85% passing 75 microns).  An c. 100g sample of pulp was split off using mini-riffle splitter, placed in sample envelope and forwarded by air to ALS in Ireland for uranium analysis by ALS Method U-MS62 (U by ICP-MS after 4 acid digestion).  4 acid digestion provides near total extraction.  Geometallurgical samples for each interval were screened at 1mm, 300µm, 150µm and 75µm and fractions weighed and assayed by portable XRF.  A split of the -75µm fraction for each interval was collected by RSD and sent to ALS Minerals for uranium analysis by ALS Method U-MS62 (U by ICP-MS after 4 acid digestion).  4 acid digestion provides near total extraction.  The results of assay and geometallurgical analysis were analysed to define process behaviour based geometallurgical domains.  Three domains were identified (2 x Lazare South and 1 x Lazare North).

		· These formed the basis for generation of bulk composite samples for metallurgical test work.  Interval samples were sent to Australian MinMet Metallurgical Laboratories (AMML), Gosford, Australia where they were combined based on composite definitions and mixed by rolling barrel.  Composited samples were assayed by Direct Neutron Activation and pressed pellet XRF by Australian Nuclear Science and Technology Organisation (ANSTO Minerals), Lucas Heights, Australia.  Composite sample head assays were well reconciled with weighted average grade calculated from input interval samples. · Aura's UOC product complies with ASTM standards for commercial sale to uranium converters.  Analysis of the UOC falls within sales specifications provided by the major uranium conversion facilities. Therefore, no allowance is made for deleterious elements.
Environmental	· The status of studies of potential environmental impacts of the mining and processing operation. Details of waste rock characterisation and the consideration of potential sites, status of design options considered and, where applicable, the status of approvals for process residue storage and waste dumps should be reported.	· The major studies incorporated by the Environmental Impact Study (EIA) and Environmental Impact Report (RIMA) included the following: o  Archaeology and Cultural Heritage o  Ecology and Biodiversity o  Meteorology, Air Quality, Noise and Vibration o  Radiation Impact Assessment o  Socio-economic, Health, Transport and Security o  Hydrology, Hydrogeology and Water

		Waste rock, beneficiation reject, and process plant tailings are inert and will disposed of in mined out pits.  The final location for all waste products is backfilled into the mining voids, however some stockpiling will be required until pit voids become available. It is planned that the process plant tailings will be preferentially placed into the mining voids followed by the coarser screening plant rejects and finally the mine waste and overburden.  The processing plant tailings are a filtered product at a 63% solids density and will be transported from the plant to the mine by truck at an average rate of 20 dry tonnes per hour. · The ESIA has been approved by the   Mauritanian government and  exploitation licence has been granted  (ASX release: 5th October 2017)

Infrastructure	The existence of appropriate infrastructure: availability of land for plant development, power, water, transportation (particularly for bulk commodities), labour, accommodation; or the ease with which the infrastructure can be provided, or accessed.	· The Tiris site is a remote site located 700km from the closest settlement of Zouerate and 1400km from the Mauritanian Capital, Nouakchott. · Access to all land required as been granted as part of the Exploitation Licence (ASX release: TIRIS URANIUM PROJECT EXPLOITATION LICENCE GRANTED, 18/12/2018). · Transportation will be by access road to Zouerate, maintained by the operation.  A uranium transport plan has been developed for safe transport of uranium product based on IAEA guidelines. · Power will be supplied by series of diesel generator power plants at key process sites.  The power supply for the main processing plant and camp will be supplemented by 50% solar generation capacity. · Water will be sourced and pumped from remote bores and pumping station within a 30km radius of the main processing facility. · A camp for accommodation of up to 120 personnel will be provided at the operation.
Costs	· The derivation of, or assumptions made, regarding projected capital costs in the study. · The methodology used to estimate operating costs. · Allowances made for the content of deleterious elements. · The source of exchange rates used in the study.	· The mine, process plant and infrastructure capital cost estimate for a 1.25Mtpa operation was prepared by MinCore Engineers from information developed in-house by Aura Energy.  The basic key information package provided by Aura included block Process Flow Diagrams (PFDs) as well as key Design Criteria to allow an

	· Derivation of transportation charges. · The basis for forecasting or source of treatment and refining charges, penalties for failure to meet specification, etc. · The allowances made for royalties payable, both Government and private .	extension of the design by others.  Based upon this package of information, external consultants were employed to further develop sufficient engineering to allow preparation of scope of work, lists, datasheets specifications and bill of quantities relevant to the scope.  Much of the engineering and the preparation of the capital cost estimate was performed by Mincore Pty Ltd.  The scope for the facilities also consists of two specialised plant areas and these were separately engineered for both quantities and prices.  o  Fluid Bed Precipitation, Calcining and Drum Packing Plant developed by Adelaide Control Engineering.  o  Leach and Uranium Recovery plant developed by Simulus Engineers.  · Cost estimate was prepared for the Feasibility Study and the cost estimate is compliant to Australasian Institute of Mining & Metallurgy (AusIMM) Class 3 estimate with an accuracy -15% to +20%. Capital costs included the process facilities, site infrastructure, utilities and support facilities and a contingency and for the DFS totalled USD74.8M · DFS operating costs for mining, treatment and G&A were derived from first principles by MiningPlus Consultants (mining), Simulus Engineers, Adelaide Control Engineering and Aura Energy (treatment and services) and Aura Energy (G&A), with input in all areas

		from MinCore Engineers.  For the DFS the average mining cost was estimated at ($3.45/t) and the average mill throughput cost (processing plus G&A) was US$15.51/t milled. · As the revenue from uranium sales is effectively received in US$ exchange rates for the Mauritanian Ouguiya and to a much lesser extent other currencies have been used at the prevailing public mid-rate when costs have been estimated. · Transportation and local freight costs have been provided by international and local suppliers as part of the estimation of capital and operating costs and are well established for projects in Mauritania. · The royalty paid to the Mauritanian government will be 3.5% of net sales revenue at uranium price up to US$42/lb U3O8 and 4.9% of net sales revenue at uranium price greater than US$42/lb U3O8.

Revenue factors	· The derivation of, or assumptions made regarding revenue factors including head grade, metal or commodity price(s) exchange rates, transportation and treatment charges, penalties, net smelter returns, etc. · The derivation of assumptions made of metal or commodity price(s), for the principal metals, minerals and co-products.	· A financial model for the Tiris Uranium Project has been developed by Aura Energy for the DFS. · The quantity of ore and head grade delivered to the mill each year is estimated using the optimised block model over the life-of-mine. · Metallurgical recoveries are then applied to the mine schedule to calculate final yearly production volumes . · Fixed and variable unit costs for mining on an A$/t waste or ore and A$/t ROM for processing have been applied to generate the annual operating cost for the Project. · Uranium price is based on the long term consensus incentive price to stimulate development of new uranium projects sufficient to meet a range of market demand forecasts. · Revenues for Ore Reserve calculations have been based on the US$ uranium price (per pound U3O8) from offtake agreement signed with Curzon Resources.  This provides an average price of US$44/lb U3O8 for 30% of annual production over 7 years.  (ASX Release:

\

	· The demand, supply and stock situation for the particular commodity, consumption trends and factors likely to affect supply and demand into the future. · A customer and competitor analysis along with the identification of likely market windows for the product. · Price and volume forecasts and the basis for these forecasts. · For industrial minerals the customer specification, testing and acceptance requirements prior to a supply contract.	· The uranium market is currently in a surplus position largely as a result of strong low cost production growth from Kazakhstan coupled with the significant global demand shock following the Fukushima reactor incident in March 2011. · A significant future increase in nuclear generation capacity is expected to be driven by China with production targets for an increase from current operational capacity (22GW) to 58GW by 2020 with a further >30GW under construction at that time. The increase in Chinese capacity is consistent with growing Chinese energy demand and a recently stated emissions target for 20% of energy to be generated from non-fossil fuel sources by 2030 from 9.8% in 2013. · The increase in nuclear generation capacity will require a significant increase in uranium mine production. Under current uranium prices (spot US$31/lb and term US$38/lb) there is a lack of identifiable projects with the returns sufficient to justify new mine investment. As such, post the ramp up of Cigar Lake and Husab there is minimal new production growth expected in primary mine supply. Leading industry participants are highlighting around US$65/lb as a potential floor price for development of their higher quality projects in more stable jurisdictions.

Economic	· The inputs to the economic analysis to produce the net present value (NPV) in the study, the source and confidence of these economic inputs including estimated inflation, discount rate, etc. · NPV ranges and sensitivity to variations in the significant assumptions and inputs.	· Aura Energy performed an economic and financial review of the Tiris Uranium Project using a range of uranium price scenarios and spot base metal prices as described above. A discounted cash flow model has been developed with a valuation date of June 2019. · NPV8 range from US$36M at sales price of US$50/lb U3O8 to US$102M at sales price of US$65/lb U3O8
Social	· The status of agreements with key stakeholders and matters leading to social licence to operate.	· The Tiris Uranium Project Exploration and Exploitation licences are located on unallocated crown land. · No native title claims cover the Tiris Uranium Project The nearest population centre is Zouerate, 700km to the West.
Other	· To the extent relevant, the impact of the following on the project and/or on the estimation and classification of the Ore Reserves: · Any identified material naturally occurring risks. · The status of material legal agreements and marketing arrangements. · The status of governmental agreements and approvals critical to the viability of the project, such as mineral tenement status, and government and statutory approvals. There must be reasonable grounds to expect that all necessary Government approvals will be received within the timeframes anticipated in the Pre-Feasibility or Feasibility study.	· Water drilling within a 30km radius of the central process facility is underway.  Recent water drilling by the Mauritanian government was successful 57km from the Tiris Project, resulting in 2 operating bores with flow of 15m3/hr each.  There are reasonable prospects for Aura to locate water on the same geological structure within the target 30km radius. · Project commissioning is targeted for 2020/21There are very reasonable grounds to expect that all necessary Government secondary project approvals will be received within the timeframes required for commencement of construction.

	Highlight and discuss the materiality of any unresolved matter that is dependent on a third party on which extraction of the reserve is contingent.
Classification	· The basis for the classification of the Ore Reserves into varying confidence categories. · Whether the result appropriately reflects the Competent Person's view of the deposit. · The proportion of Probable Ore Reserves that have been derived from Measured Mineral Resources (if any).	· Ore Reserves reported here are classified as both Proved and Probable as they are derived from Measured and Indicated Mineral Resources in accordance with the JORC Code (2012). · The results of the Ore Reserve estimate reflect the Competent Person's view of the deposit.
Audits or reviews	· The results of any audits or reviews of Ore Reserve estimates.
Discussion of relative accuracy/ confidence	· Where appropriate a statement of the relative accuracy and confidence level in the Ore Reserve estimate using an approach or procedure deemed appropriate by the Competent Person. For example, the application of statistical or geostatistical procedures to quantify the relative accuracy of the reserve within stated confidence limits, or, if such an approach is not deemed appropriate, a qualitative discussion of the factors which could affect the relative accuracy and confidence of the estimate. · The statement should specify whether it relates to global or local estimates, and, if local, state the relevant tonnages, which should be relevant to technical and economic	· Reporting of the project Ore Reserve considers; o  the Mineral Resources compliant with the JORC Code 2012 Edition, o  the conversion of these resources into an Ore Reserves, and o  the costed mining plan capable of delivering ore from a mine production schedule Dilution of the Mineral Resource model and an allowance for ore loss was included in the Ore Reserve estimate. All the Mineral Resources intersected by the open pit mine designs classified as Measured and Indicated Resource has been converted to Proved and Probable Ore Reserves

	As part of the FS works, the project team have engaged with potential contractors in country to confirm construction, mining and logistics costs. · Accuracy and confidence discussions should extend to specific discussions of any applied Modifying Factors that may have a material impact on Ore Reserve viability, or for which there are remaining areas of uncertainty at the current study stage. · It is recognised that this may not be possible or appropriate in all circumstances. These statements of relative accuracy and confidence of the estimate should be compared with production data, where available.	estimate. All the Mineral Resources intersected by the open pit mine designs classified as Measured and Indicated Resource has been converted to Proved and Probable Ore Reserves after consideration of all mining, metallurgical, social, environmental, statutory and financial aspects of the Project. · The mine planning and scheduling assumptions are based on current industry practice, which are seen as globally correct at this level of study; which further work in the next level of study to understand any periodic cost fluctuations. · The project team has estimated the cost estimates and financial evaluation with specialist consultants and team members, which are considered sufficient to support this level of study. The accuracy of the cost estimate is +/-15%. · As part of the FS works, the project team have engaged with potential contractors in country to confirm construction, mining and logistics costs.

To view Definitive Feasibility Study on Tiris Uranium Project please click here:  http://www.rns-pdf.londonstockexchange.com/rns/0092J_1-2021-8-18.pdf

 

---

[1] Minor operating permits will be required.

 

END

 

 

UPDGUGDILSBDGBI