Kristie Batten: Aura just weeks away from FID on uranium project

One of Australia’s top mining journalists, Kristie Batten, writes for Stockhead every week in her regular column, keeping a watchful eye on the movers and shakers of the small cap resources scene.

The recent release of the bankable feasibility study for Aura Energy’s (ASX:AEE) Tiris project in Mauritania confirmed the project as a viable near-term uranium development.

The study confirmed capital costs of US$349.8 million for an operation that would produce 46.1 million pounds of uranium over 26 years, averaging 1.8Mlb per annum.

The production target is based on an updated reserve of 74.6 million tonnes at 227 parts per million uranium oxide for 37.3Mlb of contained uranium oxide, and a resource of 184Mt at 225ppm uranium oxide for 91.3Mlb.

C1 cash costs are forecast to be US$32.53 per pound with all-in sustaining costs of US$41.25/lb. 

At a uranium price of US$90/lb, the cash margin over AISC is US$48.75/lb, or 54%.

Average annual revenue is expected to be US$158m, with a cash margin over AISC of US$85m, while EBITDA is forecast at US$93m with post-tax free cashflow of US$57m.

Life-of-mine unlevered free cashflow is forecast at US$1.47 billion.

Using a uranium price of US$90/lb, the study returned a post-tax net present value (8% discount rate) of US$500.3m, an internal rate of return of 28%, with a payback of 3.2 years from first production.

Aura executive chairman Phil Mitchell told Stockhead the shallow nature of the orebody was part of its simplicity. 

“The ore starts just below the sand off the top. It’s about 10 centimetres of sand, and then we have a strip ratio of one to one,” he said. 

“We have no drilling, no blasting, no crushing, no grinding, so all we do is pick the stuff up with a shovel and put it through a beneficiation plant. 

“We scrub it and screen it, and as we scrub it and screen it, we recover 84% of the uranium in about 12% of the mass.”

The simple beneficiation upgrades the uranium sevenfold to a leach feed grade of 1697ppm uranium oxide.

The product will be trucked about 1447km to the Port of Nouakchott, of which 782km is via a sealed highway.

Construction is expected to take two years.

The company recently appointed the leadership team to build the project.

New Century Resources co-founder and chemical engineer John Carr was appointed as president after being chief advisor, operations since March.

Fortescue executive Spencer Davey will join as chief financial officer in early November, while Jeremy Carter becomes chief strategy officer after advising the company for the past year.

Busy run home

The Aura team is facing a busy final two months of the year as it runs a pilot plant at Tiris and works on financing.

The Tiris pilot plant will be operational in November in Bir Moghrein, about 470km from the site.

The pilot plant will replicate the full commercial flow sheet and is expected to process more than 80t of ore across different ore types to confirm plant performance ahead of development.

The plant will run through until December.

The Tiris project is already fully permitted and the Mauritanian government has a 15% free-carry interest.

Carr said the government had been very supportive.

“Importantly, they’re neutral, so they’re not aligned to the US. They’re not aligned to China,” he said. 

“They just want, they want projects, they want jobs, they want those sorts of things, and so they’ve been very supportive of this project from the president down to the mines minister and to all the way down.”

The focus for Aura now is financing.

The company is in advanced discussions with the US International Development Finance Corporation for around US$150-170m in debt funding.

Mitchell said discussions were well advanced.

“We’ve had a number of conversations with them in the last little while,” he said.

“As we’ve got towards the end of the BFS, they’re ready to run their internal processes now that they’ve got the information.”

The company also has a non-binding MoU with a major nuclear facility. 

“We have a number of other financing proposals from people, including the largest mining company in Mauritania, which is a state-owned entity that has an interest in our project,” Mitchell said.

The final investment decision is targeted for December, putting the project on track for first production in late 2028.

Bullish outlook

Following the World Nuclear Association conference in September, most analysts renewed their bullish calls on the uranium sector.

The first nine months of the year saw the term price rise by US$10/lb, or 12%, according to Canaccord Genuity.

“Outside of other energy (oil, gas and coal), this places uranium just below zinc (+20%) and copper (+15%) for the top performing commodities of 2026,” analyst James Bullen said.

“With the December quarter typically a stronger period for contracting, continued policy tailwinds and a market view that the current oil shock will ultimately lead to some level of restocking, we remain highly constructive on the sector.”

Mitchell said the WNA, TradeTech and International Energy Agency were all positive on uranium and nuclear.

“There is a massive structural deficit through to 2040 – up to 60% of the 2040 demand has no identified source of supply,” he said. 

“In other words, the amount of uranium that needs to be made available is vastly under what people can see today.” 

Mitchell added that there were now 38 companies that had pledged to triple nuclear capacity by 2050, which was not included in the 60% figure.

“Data centres and their father, artificial intelligence, is adding a demand layer that is not properly factored into any of the stats that have been worked on,” he said. 

“The Russian uranium ban has taken out about 14% of Western supply. 

“The spot price was exactly US$90 today, and US$97 on a long-term basis, and that’s the best uranium outlook since Fukushima.”

At Stockhead we tell it like it is. While Aura Energy is a Stockhead advertiser, it did not sponsor this article.

The post Kristie Batten: Aura just weeks away from FID on uranium project appeared first on Stockhead.