Aura's Managing Director and CEO Andrew Grove
said,
"The FEED
study clearly demonstrates that Tiris will be a low-cost, high
value, near-term uranium producer with the ability to scale in a
very strong uranium market. The market is in structural deficit and
likely to continue that way for an extended period. The strong
economics at Tiris are supported by the simple, low risk mining and
beneficiation that delivers the high-grade, 1,750ppm to 2,000ppm
U3O8, ore to the leach plant and there are no
requirements for crushing or grinding the ore. These high grades
are only matched by the deep underground mines in Canada and
exceeding any current or proposed open pit uranium mines
worldwide."
"The Board
believes the current exploration drilling is likely to deliver near
term resource growth around Tiris East. This will enhance the
strong economics delivered in the FEED study, and also provide
optionality to further expand the production rate beyond the
current design of 2Mlbs pa U3O8 and extend
the mine life."
"Mauritania
is open for business, and we look forward to working with the
government and all our stakeholders to develop the Tiris Uranium
Project."
Key
highlights and outcomes of the FEED Study:
The FEED study progressed the design of the
processing plant and infrastructure to enable a detailed capital
and operating cost estimate to be prepared, with an accuracy level
of between +10% and 15%.
• Robust base case project financial economics
demonstrated by post-tax NPV8 of US$ 366M
(A$ 523M) IRR
of 34%, and a 2.5 year payback at realised
uranium price of US$ 80/lb U3O8
• At uranium prices of US$ 100/lb
U3O8 the economics increase to post-tax
NPV8 US$ 596M (A$ 851M) and IRR
49%
• Initial
mine life of 17 years producing an average 1.9Mlbspa
U3O8 from the 2.0Mlbspa capacity process
plant
• Life of Mine (LOM) uranium
production in this study was 30.1Mlbs
U3O8
• 91%
Measured and Indicated Mineral Resources in mining schedule during
the first five years, LOM Inferred material totals 33% mostly
beyond ten years in the mining schedule
• The open
pit mining is a simple, low-risk,
shallow, free digging operation without the need for crushing and
grinding
• Beneficiation of the ore delivers a
high-grade leach feed averaging 1,997ppm
U3O8 (first 5 years) and
1,743ppm U3O8 (LOM) at a very low average
cost of US$ 8.1/lb U3O8
• AISC has
increased to US$ 34.5/lb U3O8, an escalation
of 16% on the 2023 EFS estimate3. This is largely due to
a 40% increase in the fuel price
• CAPEX of
US$ 230M, an escalation of 29% on the 2023 EFS estimate6
as a result of industry wide escalation and increasing the
filtering and water treatment capacity to allow for greater flexibility and lower risk when
operating. CAPEX forecast includes a 12%
contingency
• Uranium
production planned within 18
months of Final Investment Decision
• FEED
result confirms and delivers an upgraded process design to de-risk
the Project
•
Exploration drilling underway to expand Mineral Resources
beyond the current 59Mlbs U3O8[3] with a defined Tiris East Exploration Target of an additional
8-32Mlbs U3O8[4]
• Modular
design provides opportunities for further capital efficient
expansion and scalability
• The
construction and operation of the Tiris Uranium Project will
deliver significant and ongoing benefits to the people of
Mauritania
|
Units
|
2023 EFS[5]
Base Case
|
FEED
Base Case
|
FEED
Spot Price
|
Uranium Price
|
US$/lb
U3O8
|
$65
|
$80
|
$100
|
Valuations and Returns
|
|
|
|
|
Post-tax NPV8
|
US$M
|
226
|
366
|
596
|
Post-tax IRR
|
%
|
28%
|
34%
|
49%
|
Payback period
|
Years
|
4.5
|
2.5
|
1.8
|
Cashflow Summary
|
|
|
|
|
Initial Life of Mine
|
Years
|
16
|
17
|
17
|
LOM
Production
|
Mlbspa
U3O8
|
25.5
|
30.1
|
30.1
|
Annual Production
|
Mlbspa
U3O8
|
1.6
|
1.9
|
1.9
|
Gross Revenue (LOM)
|
US$M
|
1,562
|
2,257
|
2,818
|
Free Cashflow pre-tax (LOM)
|
US$M
|
906
|
1,327
|
1,876
|
Margin (LOM)
|
%
|
58%
|
58%
|
79%
|
Free Cashflow post tax (LOM)
|
US$M
|
554
|
1,061
|
1,486
|
Unit Operating Costs
|
|
|
|
|
All
in Cost
|
US$/lb
U3O8
|
35.6
|
42.1
|
43.2
|
All-in Sustaining Costs
|
US$/lb
U3O8
|
28.7
|
34.5
|
35.5
|
C1
Cash Cost
|
US$/lb
U3O8
|
25.2
|
30.1
|
30.2
|
Capital Cost
|
|
|
|
|
Development Capital
|
US$M
|
178
|
230
|
230
|
Table 1 - Tiris Uranium Project Financial
Summary demonstrates robust economics
Figure
1
- Tiris Uranium
Project key operational parameters and systems
There is significant potential to grow the
59Mlbs U3O8 of Mineral Resources[6] currently defined at Tiris. Tiris East
Exploration targets[7] outline potential for an
additional 8-32Mlbs U3O8 and a 15,500m drill
program is currently underway targeting extensions to the know
mineralisation and testing previously un-drilled radiometric
anomalies.
Phase 1 of the current drilling program was
completed in late February 2024 with approximately 50% of the
planned drilling completed. Initial results from the Phase 1
program are expected to be published shortly. Phase 2
drilling is underway and involves infill drilling the Phase 1
targets. The Phase 2 drilling program is expected to be
completed by end of March 2024 followed by an update to the Mineral
Resources planned for the second quarter of 2024.
The modular configuration of the processing
plant is well suited to capital efficient and simple expansion to
accommodate future growth in Mineral Resources as indicated
below.
Ø 2.0Mlbspa
U3O8 production capacity = US$ 230M
development capital (Base Case)
Ø 2.8Mlbspa
U3O8 production capacity = US$ 83M expansion
capital (from 2 to 2.8Mlbpa)
Ø 3.5Mlbspa
U3O8 production capacity = US$ 166M expansion
capital (from 2 to 3.5Mlbpa)
Next Steps
The next steps in progressing
towards the construction and development of the Project planned for
2024 include:
•
Drilling and update to Mineral Resources -
currently underway
•
Project funding inclusive of debt, strategic
investors and equity
•
Securing offtake contracts for future
production
•
Confirming water infrastructure to support future
operations
•
Further geometallurgy, engineering and design work
to support development activities
•
Drill results, resource re-estimation and mine
plan optimisation
•
Completion of Project Execution Plan
•
Final Investment Decision
Authorised for lodgement by the
Board of Aura Energy.
This Announcement contains inside information
for the purposes of the UK version of the market abuse regulation
(EU No. 596/2014) as it forms part of United Kingdom domestic law
by virtue of the European Union (Withdrawal) Act 2018 ("UK
MAR").
For
further information, please contact:
Andrew Grove
Managing Director and CEO
Aura Energy Limited
agrove@auraee.com
+61 414 011 383
|
Paul Ryan
Citadel-MAGNUS
Investor & Media
Relations
pryan@citadelmagnus.com
+61 409 296 511
|
SP
Angel Corporate Finance LLP
Nominated Advisor and
Broker
David Hignell
Kasia Brzozowska
+44 (0) 203 470 0470
|
About Aura Energy (ASX: AEE, AIM:
AURA)
Aura Energy is an Australian-based
mineral company with major uranium and polymetallic projects in
Africa and Europe.
The Company is focused on developing
a uranium mine at the Tiris Uranium Project, a major greenfield
uranium discovery in Mauritania. The FEED has confirmed Tiris to be
a potential high-value low-cost low-risk commercial scaled near
term uranium mine.
Aura plans to transition from a
uranium explorer to a uranium producer to capitalise on the rapidly
growing demand for nuclear power as the world shifts towards a
decarbonised energy sector.
Beyond the Tiris Project, Aura owns
100% of the Häggån Project in Sweden. Häggån contains a
global-scale 2.5Bt vanadium, sulphate of potash ("SOP") and uranium
resource. Utilising only 3% of the resource, a 2023 Scoping Study
outlined a 27-year mine life based on mining 3.5Mtpa.
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 or
guarantee that the anticipated results, performance or
achievements expressed or implied in those forward-looking
statements will be achieved.
Front End Engineering Design (FEED) Study
Summary
The Tiris Uranium Project is a greenfield
calcrete uranium project located in Mauritania that was first
discovered by Aura Energy in 2008. It represents the first planned
development in a significant new global uranium province in
Mauritania with a Mineral Resource Estimate of 59Mlbs
U3O8[8] and considerable
exploration upside and project growth opportunities. The
mineralisation is naturally suited to low capital cost development
and low operating cost extraction of uranium, presenting an
opportunity for near term development of the Project.
The FEED Study scope was to focus on improving
engineering definition for each of the three modular circuit
components of the Tiris Uranium Project, including the
Beneficiation, Concentrate Processing and Precipitation and
Packaging Circuits. The scope was defined in this manner to provide
scalability to fully utilise additional Resources as they were
defined.
All targeted outcomes were achieved by the
FEED, including:
•
Finalisation of key technical and strategic project
decisions
•
Produce foundation technical documents for detailed
design
•
Confirm product specifications
•
Refine budget, scope, and schedule for the project
•
Initiate project procedures and systems
•
Prepare tenders for key long-lead procurement items
The FEED study focused on progressing the
design of the processing plant and infrastructure to enable a
detailed capital and operating cost estimate to be prepared to a
level of accuracy of +10% -15%.
List of FEED
Consultants
The independent consultants responsible for the
FEED study scope of work have been summarised in Table
2.
Consultant
|
Scope
|
METS Engineering
|
Beneficiation circuit
Infrastructure
Engineering Integration
|
Wallbridge, Gilbert, Aztec
(WGA)
|
Concentrate processing
circuit
|
Adelaide Control
Engineering
|
Precipitation and Packaging
plant
|
Anandarasa Advisory
|
Financial modelling
|
Table 2 - FEED study contributors
Tiris Project
Background
The Tiris Uranium Project is 100% owned by
Tiris Ressources SARL, which is 85% owned by Aura Energy Ltd and
15% by the Mauritanian Government's Agence Nationale de Recherches
Géologiques et du Patrimoine Minier ("ANARPAM").
A Scoping Study was completed in 2014. This was
updated into a Feasibility Study ("FS") document in May 2017, to
support an application for exploitation licences. FS and an
extensive Environmental and Social Impact Assessment ("ESIA") were
submitted on 24 May 2017 to the Mauritanian Ministry of Petroleum,
Energy and Mines, and formally approved by the Mauritanian
Government on 5th October 2017.
A Definitive Feasibility Study ("DFS") for a
1.25Mtpa mine and 230ktpa process plant was completed in
2019[9]. The process plant has been designed to
take full advantage of the characteristics of the material which
responds well to concentration of uranium by scrubbing and
screening, whilst providing a low capital cost and rapid project
development and construction.
The Capital Estimate for the DFS was updated in
August 2021[10]. In March 2023 an Enhanced
Definitive Feasibility Study ("EFS") was published including
additional Ore Reserves and Mineral Resources defined in ASX and
AIM releases, "Major Resource Upgrade at Aura Energy's Tiris
Project", 14 February 2023 and ASX Release, "Tiris
Uranium Project Enhanced Definitive Feasibility Study", 29 March
2023. The EFS presented a staged development approach,
including a 2-year ramp up at 1.25Mtpa mined ore, expanding to
4.1Mtpa mined ore in year three to produce an average of 2Mlbspa
U3O8.
Exploitation licences (2491C4 and 2492C4) for
the Ain Sder and Oued El Foude permits, Figure 2, were granted on
the 8 of February 2019[11] and Mining
Conventions for these permits were signed in January
2023[12].
Resources and Reserves
The declared Ore Reserve Estimate, at a 110ppm
U3O8 cut off is shown in Table
3. The definition of the Ore Reserve Estimate cut-off
grade as set out in the ASX release, "Tiris Uranium
Project Enhanced Definitive Feasibility Study", 29 March
2023. Aura completed numerous metallurgical
and geometallurgical studies on composite samples of mineralisation
at Tiris, which were summarised in ASX and AIM announcement, "Tiris
Uranium Project DFS complete" 29 July 2019. These results together
with updated mining and processing costs, and other cost inputs
support the application of a marginal cut-off grade of 110ppm
U3O8. This cut-off is comparable to peer
projects with similar mineralisation types and processing
assumptions. Assessment of material assumptions has determined that
changes in cost estimates presented in the FEED study were not
material to the Ore Reserve Estimate.
Description
|
Mt
|
U3O8 (ppm)
|
U3O8 (Mlbs)
|
Lazare North
|
Proved
|
0.9
|
298
|
0.6
|
Probable
|
7.9
|
251
|
4.4
|
Lazare South
|
Proved
|
6.5
|
264
|
3.8
|
Probable
|
2.6
|
291
|
1.7
|
Hippolyte
|
Proved
|
5.7
|
270
|
3.4
|
Probable
|
7.1
|
231
|
3.6
|
Sadi
|
Proved
|
6.1
|
232
|
3.1
|
Probable
|
3.3
|
261
|
1.9
|
Total Ore Reserve
|
Proved
|
19.3
|
257
|
11.0
|
Probable
|
21.3
|
251
|
11.6
|
Total Ore Reserve
|
40.3
|
254
|
22.6
|
Table 3 - Updated
Ore Reserve Estimate
Notes to Table
1:
Ore Reserves are a subset of Mineral
Resources
Ore Reserves conform with and use the JORC Code 2012
definitions
Ore Reserves are calculated using a uranium price of US$65 /lb
U3O8.
Ore Reserves are calculated using a cut-off grade of 110 ppm
U3O8.
Tonnages are reported including mining dilution
All figures are rounded to reflect appropriate levels of confidence
which may result in apparent errors of summation
The Ore Reserve Estimate was generated from the
Mineral Resource Estimate produced by H&S Consultants (Sydney)
in 2023 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.
Figure 2 - Tiris East Resource
outlines for the Tiris Uranium Project
This Ore Reserve is based upon consolidated
Mineral Resources reported in the ASX announcement entitled "Major
Resource Upgrade at Aura Energy's Tiris Project" released on 14
February 2023 and available to download from asx.com.au (ASX:AEE).
In that report, Measured and Indicated Resources were listed at
62.1Mt of ore for 29.6Mlbs U3O8, at 216ppm.
The combined Mineral Resources Estimate, including an Inferred
Resource Estimate, is 113Mt of ore at 236ppm for 58.9Mlbs
U3O8. All resources were reported at a 100ppm
grade cut-off and summarised in Table
4.
Area[13],
[14]
|
Class
|
Tonnes (Mt)
|
U3O8
(ppm)
|
U3O8
(Mkg)
|
U3O8
(Mlb)
|
Hippolyte
North
|
Measured
|
8.0
|
236
|
1.9
|
4.2
|
Indicated
|
5.8
|
217
|
1.3
|
2.8
|
Inferred
|
4.7
|
212
|
1.0
|
2.2
|
Sub-Total
|
18.5
|
224
|
4.1
|
9.1
|
Hippolyte
Marie & West
|
Inferred
|
8.2
|
310
|
2.5
|
5.6
|
Hippolyte
South
|
Indicated
|
4.6
|
192
|
0.9
|
2.0
|
Inferred
|
2.7
|
176
|
0.5
|
1.1
|
Sub-Total
|
7.4
|
186
|
1.4
|
3.0
|
Lazare
North
|
Measured
|
1.0
|
282
|
0.3
|
0.6
|
Indicated
|
10.1
|
229
|
2.3
|
5.1
|
Inferred
|
3.7
|
210
|
0.8
|
1.7
|
Sub-Total
|
14.8
|
228
|
3.4
|
7.4
|
Lazare
South
|
Measured
|
8.6
|
233
|
2.0
|
4.4
|
Indicated
|
5.2
|
226
|
1.2
|
2.6
|
Inferred
|
4.8
|
222
|
1.1
|
2.3
|
Sub-Total
|
18.6
|
228
|
4.2
|
9.3
|
Sadi
|
Measured
|
11.5
|
189
|
2.2
|
4.8
|
Indicated
|
7.4
|
200
|
1.5
|
3.2
|
Inferred
|
10.3
|
228
|
2.4
|
5.2
|
Sub-Total
|
29.2
|
206
|
6.0
|
13.2
|
All
Deposits
|
Measured
|
29.1
|
218
|
6.4
|
14.0
|
Indicated
|
33.0
|
215
|
7.1
|
15.6
|
Inferred
|
34.5
|
237
|
8.2
|
18.0
|
Total Tiris
East
|
96.6
|
224
|
21.6
|
47.7
|
Total Tiris
West:
Oum Ferkik
|
Inferred
|
16.4
|
305
|
5.1
|
11.2
|
Total Aura
Resources
|
113.0
|
236
|
26.7
|
58.9
|
Table 4 - 2023
Mineral Resource Estimate
Production Schedule
The sequencing and material inclusions for the
proposed production schedule was published in ASX and AIM Release,
"Tiris Uranium Project Enhanced Definitive Feasibility Study", 29
March 2023, where it was developed based on pit optimisation in the
Ore Reserve Estimation. No material change was made to the
production schedule, other than acceleration of mining for the
first two years of operation.
Base Case Production
Schedule
A base case production schedule was developed
and initially outlined in ASX and AIM Release, "Tiris Uranium
Project Enhanced Definitive Feasibility Study", 29 March 2023. The
production schedule has been updated, without alteration of the pit
shells or mining sequence, to accelerate mining in the first two
years of operation to 4.1Mtpa, including a six month ramp up period
(Figure 3). In addition, a small
proportion of residual material in Inferred Resource category was
included at the end of the mining schedule. The accelerated mining
schedule includes 9% inferred material in the first five years and
15% in the first ten years of operation, all of which was sourced
within existing pit shells. Over the Life of Mine ("LOM") a total
of 33% Inferred material was included in the mining schedule. The
Project remains strongly viable with removal of Inferred
material.
Figure 3 - Base Case
Mine schedule ore profile by area at average
mining rate of 4.1Mtpa ore.
Note:
There is a low
level of geological confidence associated with Inferred Resources
and there is no certainty that further exploration or evaluation
work will result in the determination of Indicated Resources or
that the production targets reported in this announcement will be
realised. The Company confirms that the use of Inferred Resources
is not a determining factor to the Tiris Project's economic
viability.
The Base Case concentrate grade profile for
U3O8 has been presented in
Figure 4, demonstrating an average concentrate
grade to leaching of 1,743ppm U3O8 life of
mine. A full description of concentration of uranium through the
beneficiation circuit by scrubbing and screening, including
recovery assumptions, can be found in ASX and AIM Release, "Tiris
Uranium Project Enhanced Definitive Feasibility Study", 29 March
2023.
Figure 4 - Concentrate grade profile
for base case mining schedule highlighting higher leach feed grade
profile in early years. Average Concentrate production rate of
500,000tpa
The base case U3O8
production profile can be seen in Figure
5. Over the life of mine the average production rate
has been estimated as 1.9Mlb U3O8 pa, ranging
from 2.3Mlbpa in Year 2 to 1.5Mlb U3O8 in
Year 13.
Figure 5 - Uranium oxide production
profile for base case scenario.
Process Configuration
The processing of mined material is undertaken
in modular circuits, with design throughput capacity defined by the
number of modules used in each section. The FEED study focused on
improvement of engineering definition for a single train of
modules, which may then be combined to achieve target throughput
capacity to match the mining schedule.
A detailed process description and summary of
module configuration can be found in ASX and AIM Release, "Tiris
Uranium Project Enhanced Definitive Feasibility Study", 29 March
2023.
The design basis for the FEED study maintained
the same design criteria for the beneficiation and precipitation
and packaging plants as for the 2019 DFS[15].
Design criteria for the concentrate processing
plant was updated to include allowance for the results of the
beneficiation pilot plant program[16] and
definition of the water source[17]. The
outcomes of implementation of these risk mitigation measures were
increased dilution within the leach and ion exchange circuits,
leading to increased tank volumes. The total filtration capacity
was increased based on outcomes of the beneficiation pilot
program.
The layout of the Concentrate Processing
Facility can be seen in Figure
6.
Additional water treatment capacity was
included into the design to allow for processing of raw water
sourced from the C22 water target identified in
202111.
Figure 6 - 3D FEED layout of
concentrate processing facility
Capital Cost Estimate
The FEED Capital Cost Estimate ("CAPEX") for
the development of Tiris was completed using a design basis of a
single modular processing train, with units combined to generate an
Estimate for total production capacity of 2Mlbpa
U3O8 in Table 7. The total CAPEX was
estimated to be US$230 million (including a contingency allowance
of approximately 12%), which is within 29% of the EFS estimate
(US$178M) presented 29th March 2023.
The level of confidence in the Capital Estimate
has increased with completion of the FEED, summarised in
Table 5.
Using the modular design basis allows the
Company to efficiently assess multiple growth scenario options with
greater confidence.
Circuit
|
Single train capacity
|
Single train
confidence
|
Additional train
confidence
|
Beneficiation
|
1.25Mtpa Run of Mine
ore
|
Class 3 (90-95%
confidence)
|
Class 3 (90-95%
confidence)
|
Concentrate Processing Plant
(Leaching, ion exchange,
precipitation)
|
250ktpa
concentrate
|
Class 3 (90-95%
confidence)
|
Class 4 (65-70%
Confidence)
|
Precipitation and Packaging
|
3.5Mlb
U3O8 pa
|
Class 3 (90-95%
confidence)
|
NA
|
Table 5 - Modular circuits available for
Tiris project with engineering confidence
The final production scale capital cost
estimate was developed based on combining modules to achieve the
target capacity. A summary of the module configuration for
throughput capacities assessed can be seen in Table 6.
Circuit
|
4.1Mtpa Base Case
|
|
2Mlb U3O8
pa
|
Beneficiation
(5Mtpa)
|
4
|
Concentrate
Processing plant (500ktpa)
|
2
|
Precipitation
and Packaging (3.5Mlbs pa
U3O8)
|
1
|
CAPEX
|
US$230M
|
Table 6 - Process configuration for Base
case mining schedules.
A comparison of the Capital Estimate for the
base case scenario between the EFS 2023 and FEED update can be seen
in Table 7. This shows escalation of 29%
overall, with the most significant variation in processing,
infrastructure and EPCM costs.
Area
|
FEED 2024
|
EFS 2023
|
|
US$M
|
US$M
|
Mining
|
4.3
|
4.9
|
Beneficiation
|
25.6
|
22.0
|
Processing
|
84.2
|
72.5
|
Infrastructure
|
54.1
|
37.1
|
EPCM
|
22.5
|
8.4
|
Owner's cost
|
19.3
|
21.3
|
Contingency
|
20.1
|
12.1
|
Total Capital
Cost
|
230.0
|
178.2
|
Table 7 - Comparison of Project CAPEX
between EFS 2023 and FEED 2024.
The variance of FEED capital cost to EFS is as
shown in Figure 7.
|
1000
|
Mining
|
2000
|
Process Plant
|
3100
|
Transportable Front End Site Services &
Utilities
|
3200
|
Process Plant Site Services & Utilities
|
3300
|
Process Plant Site Infrastructure
|
3400
|
Construction/Operations Camp
|
3500
|
Off
Site Infrastructure
|
3600
|
Contractors Distributable
|
5100
|
EPCM
|
5200
|
Auxiliary items
|
5300
|
Freight
|
6100
|
Owners Provisions
|
6200
|
Contingency
|
|
Figure 7 -
Tiris Project Capital Estimate
The primary drivers for variance in CAPEX were
a combination of the global inflationary environment and several
risk mitigation measures that were included in the FEED design.
Primarily, based on outcomes of vendor test work on
filtration[18], which recommended increasing
total filtration area. In addition, more water treatment capacity
was included to manage the concentration of chloride anions in ion
exchange, corresponding to recommendations from ANSTO Minerals to
improve yellowcake purity[19]. These
improvements will increase the flexibility of the process in
operation, allowing acceleration of throughput
increases.
Operating Cost Estimate
The operating cost estimate for the Tiris
Project was developed by Aura Energy with input costs generated by
METS Engineering, WGA and MiningPlus. The estimate is based on the
LOM ore schedule, process design criteria, steady state mass and
energy balance and metallurgical test work undertaken as part of
the Feasibility Study.
The estimate includes all costs associated with
production of an average 1.9Mlbs U3O8 per
annum after ramp-up, including:
·
Owner mining
·
Labour
·
Fuel
·
Power
·
Reagents and consumables
·
Maintenance
·
General and administration
·
Product transport
·
Sustaining capital
·
World Bank Community contributions
·
Royalties
The operating cost estimate is presented in US
dollars and is considered to have an estimated accuracy level of
between +15% and 10%. A 17-year LOM has been used in
development of the operating cost estimate.
Cash costs were broken down into their fixed
and variable components to accommodate cash flow scheduling.
Variable costs were linked to uranium production.
Mining and key reagent costs, including diesel,
sodium carbonate and sodium bicarbonate were updated for the 2024
FEED study. The mining costs were also validated against four
mining contractor submissions allowing for the inclusion of a
suitable profit margin.
The operating cost estimate has been summarised
in Table 8. The average LOM C1 cash cost will be US$
30.2/lb U3O8 and LOM AISC, inclusive of
royalties, LOM sustaining capital, insurances and product transport
will be US$ 34.5/lb U3O8. These costs have
been estimated as an average of annualised expenditure.
The FEED operating costs for the first five
years of operation have been presented in Table
8. These demonstrate higher efficiency through this
period, with AISC of US$ 33.8/lb
U3O8.
|
FEED
Years 1-5
|
FEED
Average
|
EFS
Average
|
Variation
|
|
|
Q1 2024
|
Q1 2023
|
Absolute
|
%
|
|
US$/lb
U3O8
|
US$/lb
U3O8
|
US$/lb
U3O8
|
|
|
Owner Mining
|
$7.6
|
$8.1
|
$8.1
|
$0.0
|
0%
|
Labour
|
$1.8
|
$2.0
|
$2.0
|
-$0.1
|
-3%
|
Reagents
|
$6.3
|
$6.9
|
$6.9
|
$0.0
|
1%
|
Power
|
$9.3
|
$8.6
|
$5.0
|
$3.6
|
73%
|
Maintenance
|
$1.6
|
$1.8
|
$1.7
|
$0.1
|
5%
|
Environment
|
$0.3
|
$0.4
|
$0.3
|
$0.1
|
47%
|
Site G&A
|
$2.2
|
$2.5
|
$2.1
|
$0.3
|
15%
|
CASH COST
|
$29.2
|
$30.2
|
$26.1
|
$4.2
|
16%
|
Transport & Marketing
|
$0.5
|
$0.5
|
$0.5
|
$-
|
0%
|
Royalties
|
$2.7
|
$2.7
|
$2.2
|
$0.5
|
22%
|
Communities
|
$0.7
|
$0.7
|
$0.5
|
$0.2
|
37%
|
Sustaining Capital
|
$0.7
|
$0.3
|
$0.3
|
$0.0
|
0%
|
ALL-IN-SUSTAINING COST
|
$33.8
|
$34.5
|
$29.6
|
$4.9
|
16%
|
Table 8 - FEED Operating Cost estimate,
including comparison to EFS average OPEX.
A summary of the variance between the FEED
study and 2023 EFS can be seen in Figure
8.
Figure 8 - Tiris Project All In
Sustaining Costs
Savings were achieved in reagent usage and
costs, as well as by optimising the owner mining model.
The increases were mainly in power costs. These
were driven by a 40% increase in diesel price from US$ 0.86 to US$
1.20 per litre following the removal of the government subsidy. In
addition, moving to a BOOT power model added capacity charges for
lease of power generation plant that were not included in EFS
assumptions.
Work will continue in 2024 on the power
generation optimisation with a focus on greater renewable energy
storage with opportunities to reduce power costs.
Market Analysis
Aura has updated the comprehensive
EFS[20] market assessment to develop a
pricing forecast for Tiris. This has resulted in 3 pricing
scenarios to assess the economic viability of the Tiris
Project.
i.
Low
case: TradeTech FAM 1 term forecast. Mean
forecast term price to 2040 of US$ 70/lb U3O8.
ii.
Base case:
Base case price of US$ 80/lb U3O8
iii.
High
case: TradeTech FAM 2 term forecast. Mean
forecast price to 2040 of US$ 86/lb U3O8.
The FAM 1 based on a 'risk off' approach where
published production target volumes are readily achieved, and FAM 2
based on a 'risk on' approach where there is a reduction in
production volumes 148Mlbs between 2020 and 2040.
Financial Analysis
Financial analysis of the Tiris Project is
inclusive of Mauritanian government royalties and commitments
relating to the offtake agreement with Curzon Resources. This is
outlined in the ASX announcement "Aura concludes offtake
agreement", dated 29 January 2019.
Results are on an after-tax basis in $USD,
unless otherwise stated. Financial modelling is inclusive of all
capital items, including mining mobilisation, process plant,
project infrastructure and LOM sustaining capital.
The project financial analysis has been
completed with a valuation date of 9 February 2024.
Table 9 shows the variance in
NPV8, IRR, payback period and net cashflows for a range
of uranium contract prices, including commitments to Curzon
Resources offtake agreement. At a base case uranium price of
US$ 80/lb
U3O8, the post-tax NPV8 of
the Tiris Project is US$
366M. This is with a post-tax IRR of 34%, and a project payback of
2.5 years from commencement
of production. At this price the project generates annual net
cashflows (EBITDA) of US$ 78M
pa.
|
Units
|
FEED
|
FEED
|
2023 EFS
|
Base Case
|
Spot Price
|
|
Uranium Price
|
US$ /lbs
U3O8
|
80
|
$100
|
$65
|
Avg
Annual Production
|
Mlbspa
U3O8
|
2
|
2
|
2
|
Post-tax NPV8
|
US$ M
|
366
|
596
|
227
|
Post-tax IRR
|
%
|
34
|
49%
|
28%
|
Average All-in Sustaining Costs
|
US$ /lbs
U3O8
|
34.5
|
35.5
|
28.7
|
Annual average EBITDA
|
US$ M
|
78
|
110
|
64.7
|
Initial Life of Mine
|
Years
|
17
|
17
|
15
|
Capital Expenditure
|
US$ M
|
230
|
230
|
178
|
Payback period
|
Years
|
2.5
|
1.75
|
4.5
|
Table 9 - Summary of outputs recommended for
presentation of FEED update results
Sensitivity Analysis
The sensitivity of the project to market and
project factors was examined. Table 10
provides a comparison of project returns (NPV and IRR) at
various throughput profiles and U3O8 price.
This demonstrated robust returns for a range of pricing scenarios
for both the Base and Growth scenarios. This analysis determined
that the greatest capital efficiency could be achieved for the base
case production profile, targeting 2Mlbs U3O8
pa production.
|
Spot U3O8 Price -
US$/lb.
|
|
65
|
70*
|
80
|
86#
|
90
|
100
|
110
|
NPV8%
|
192
|
244
|
366
|
424
|
482
|
596
|
711
|
IRR
|
22%
|
25%
|
34%
|
36%
|
41%
|
49%
|
56%
|
Table 10 - Economic comparison at varying
U3O8 price for Base Case 2Mlbs
U3O8 pa production
* Tradetech Forward Availability Model (FAM) 1
average term price to 2040 (Real). Representing best case project
development (supply) scenario.
# Tradetech FAM 2 average term price to 2040
(Real). Representing restricted project development
scenario.
The sensitivity of the project to key variables
was examined in Figure 9. This showed
that the Project was most sensitive to revenue drivers, including
mined grade and U3O8 spot price. The Project
was least sensitive to operating cost inputs.
Figure 9 - Tiris Project Sensitivity
analysis
Growth Scenario
There is significant potential to grow the
59Mlbs U3O8 of Mineral Resources[21] currently defined at Tiris. Tiris East
Exploration targets[22] outlined
potential for an additional 8-32 Mlbs U3O8. A
15,000m drill program is currently underway targeting extensions to
the know mineralisation.
The modular configuration of the processing
plant is well suited to simple expansion as additional Resources
are defined. Table 11 shows the
incremental Capital requirement to progressively increase capacity
in the beneficiation and concentrate processing circuits, to the
point where it is expected the precipitation and packaging plant
would be fully utilised.
Circuit
|
4.1Mtpa Base Case
|
6.25Mtpa Growth
|
7.0Mtpa Growth
|
|
2Mlb U3O8
pa
|
2.8Mlb U3O8
pa
|
~3.5Mlb U3O8
pa
|
Beneficiation
|
4
|
5
|
6
|
Concentrate Processing plant
|
2
|
3
|
4
|
Precipitation and Packaging
|
1
|
1
|
1
|
CAPEX
|
US$230M
|
US$313M
|
US$396M
|
Table 11 - Capital cost estimate for growth
configurations of the processing circuits for the Tiris
Project
In all the above scenarios it is expected that
the operating costs would remain similar to the base case AISC of
US$ 34.5/lb U3O8, with some cost efficiencies
potentially realised through a more efficient workforce and
consolidation of mining fleet.
Project Finance
The Tiris Uranium Project funding structure
will be one of project financing to minimise risk to the Project,
maintaining flexibility and preserving shareholder value. Aura will
consider funding total pre-production capital and working capital
by some or all of the following:
•
Senior project debt
•
Mezzanine debt
•
Offtake prepayment
•
Equity
•
Royalty or stream funding
The structure will be dependent on general
industry and market conditions, specific counterparty appetite and
terms and Aura's views on optimal funding mix and balance sheet
configuration.
Senior debt may be sourced from several
alternate providers including commercial banks, export credit
agencies, development financial institutions / multilaterals,
credit funds and the project bond market.
The Company's Board and Management have a
successful track record of developing and financing mineral
resource projects globally.
The Company believes that there is reasonable
basis to assume that future funding will be available as and when
required. Investors should note that there is no certainty that the
Company will be able to raise the amount of funding required to
develop the Project when needed. It is also possible that such
funding may only be available on terms that are dilutive or
otherwise affect the value of the Company's shares, or that the
Company may pursue other value realisation strategies such as a
sale, partial sale or joint venture of the Project (which may
reduce the Company's overall ownership of the Project).
Project Risk
The key risks with their mitigations, are
identified as follows:
1. The Project's success is
fundamentally linked to the price for uranium exceeding the
operating cost for the project. Aura is in the process of seeking
additional offtake agreements with suitable long-term pricing, but
the market price risk is largely outside Aura's control.
2. The estimated capital
costs for the project could prove optimistic, requiring additional
funding. The Capex estimate was composed of 85% external pricing,
so has a strong basis for its pricing. The project will rely on
competent Project cost control by the EPC company overviewing the
project.
3. OHS management risk of
radioactive dust in the mining and front-end areas. Aura will
ensure operators are in dust sealed cabins, use personnel badges
and will rotate personnel if necessary.
4. There are potential risks
in obtaining Mauritanian statutory permit approvals, in the time
required. Aura would seek a high-level connection between
Government authorities and its senior management, to supplement the
usual project interfaces between Aura's local permitting supervisor
and Government authorities. It is expected given Aura's focus on
maximising local employment, that the Mauritanian Government will
be quite supportive.
5. There are risks from
terror groups in the Sahel region. Aura has provisionally arranged
for military supported security to be permanently based close to
the site. Aura will continue with its very close coordination with
police/gendarmes/military guarding the area.
6. A risk remains of
insufficient water being available for the project. A program
designed to mitigate the risk that includes the drilling and test
work of the Taoudeni basin is planned to be completed in 2024. The
Taoudeni basin supplies water for the SNIM magnetite iron ore
operations in Zouerate and First Quantum's Guelb Morghein Cu/Au/Fe
mine in Akjout. Tiris' water requirements are between 2-3ML pa and
it expected that there will be more than sufficient quantities of
water available.
7. Aura's hybrid diesel and
solar generation plant will be the only power source for the
Project. Aura shall undertake rigorous engineering selection of the
power generation supply and hire experienced and competent
electrical support personnel to maintain the power
plant.
Future Activities
The Company plans to undertake a series of
activities throughout 2024 to further grow the Tiris project
potential and support financing and Final Investment Decision.
These will include:
·
Securing offtake contracts for future production
from major US utilities to de-risk future cashflows and support
funding initiatives
·
Completion of current drilling program and
updating the Mineral Resources at Tiris East aimed at extending
mine life and potentially increasing the scale of the
Project
·
Commencement of trial mining to confirm baseline assumptions
for mining fleet and provide inputs for grade control and
geometallurgical models
·
Investigation and testing of water targets within the
Taoudeni basin target expansion of water resources in line with
expanded processing capacity
·
Ongoing baseline environmental and radiation monitoring,
along with commencement of community consultation along the product
transport route
·
Engineering optimisation for concentrate processing
facilities to investigate potential capital cost efficiencies of
expanding capacity for a single train circuit
·
Completion of Project Execution Plan
Cautionary Statement: TIRIS
FRONT END ENGINEERING DESIGN (FEED) STUDY
As
the Front End Engineering Design ("FEED") analysis for Tiris
Uranium Project utilises a portion of Inferred Mineral Resources,
the ASX Listing Rules require a cautionary statement to be included
in this announcement.
The FEED referred to in this announcement is based on a
Mineral Resources Estimate reported in accordance with JORC
guidelines 2012 in the ASX announcement entitled "Major Resource
Upgrade at Aura Energy's Tiris Project" dated 14 February
2023.
The Company advises that the Tiris East Uranium Production
Targets set out in this announcement uses Proved and Probable Ore
Reserves, Measured Resources (32%) and Indicated Resources (35%),
as well as Inferred Resources in the first 5 years (less than 10%)
and over the 17-year life of mine (33%) for the Base Case. The
Company is currently drilling a 15,000 metre drill program around
the Tiris East mine plan.
In
accordance with ASX Listing Rules 5.16 and 5.17, as well as the
2012 JORC Code reporting guidelines, a summary of the information
derived from the Tiris FEED analysis is detailed in this report.
The FEED analysis also draws on information from the ASX Release,
"Tiris Uranium Project Enhanced Definitive Feasibility Study", 29th
March 2023 which is available to be viewed at
auraenergy.com.au/investor-centre/asx-announcements.
The Company confirms that the use of Inferred Resources is not
a determining factor to the Tiris Project's economic
viability.
There is a low level of geological confidence associated with
Inferred Mineral Resources and there is no certainty that further
exploration will result in an upgrade to Indicated Mineral
Resources, or that the production targets reported in this
announcement will be realised.
The Company confirms that it is not aware of any new
information materially affecting the information included in the
ASX announcement dated 14 February 2023, "Major Resource Upgrade at
Aura Energy's Tiris Project". All material assumptions and
technical parameters underpinning the Mineral Resources Estimates
continue to apply. 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 market
announcement.
The Announcement includes forward-looking statements. These
forward-looking statements are based on the Company's expectations
and beliefs concerning future events. Forward-looking statements
are necessarily subject to risks, uncertainties, and other factors,
many of which are outside the control of Aura Energy Ltd, which
could cause actual results to differ materially from such
statements. Aura Energy Ltd makes no undertaking to subsequently
update or revise the forward-looking statements made in this
announcement, to reflect the circumstances or events after the date
of this announcement.
The Company has concluded that it has a reasonable basis for
providing the forward-looking statements and production targets
included in this announcement. The detailed reasons for this
conclusion are outlined throughout this announcement, and in the
ASX Release, "Tiris Uranium Project Enhanced Definitive Feasibility
Study", 29th March 2023.