Aura Energy Limited - Tiris Uranium DFS Complete.
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Release date- 29072019 - Aura Energy Limited (AEE; ASX, AURA; AIM) is pleased to advise that the Tiris Uranium Definitive Feasibility Study (DFS) has been completed and has confirmed the Tiris Uranium Project as a low capital cost and low operating cost development opportunity.
'The completion of the Tiris Uranium Project Definitive Feasibility Study has concluded that the project possesses both a very low capital development cost and a very low operating cost, and validates Aura's long held view that the Tiris Project is one of the most compelling uranium development projects in the world at the current time', Mr Peter Reeve, Aura's Executive Chairman, said.
'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 $US62.9 million capital defined, where 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', Mr Reeve continued.
'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 be positive for the project's operating cost'.
'Several areas of project upside also exist including potential for reserve and resource upside, expansion potential to 3 Mlbs U3O8 per annum, vanadium recovery and project optimisation across a range of mining and processing areas. As such, Aura is confident that the operating team will be able to improve the project and financial outcomes in the production phase'.
'The next technical steps of the project are to further optimise the capital cost where possible, optimise elements of the process to reduce operating cost, and to validate the vanadium recovery option. In parallel, the promising start to the Export Credit Agency Finance process will intensify in the coming months as the ECA finance short-list is finalised', Mr Reeve concluded.
The Tiris Project capital cost is US$62.9 million.
Engineering company, Mincore, provided the capital cost estimate for the Tiris Project. 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.
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, 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 included in the operating cost estimation received.
ECA Finance Status
Export Credit Agency (ECA) financing continues to be our main funding focus for Tiris and then later for the Haggan Project. Through our advisors GKB Ventures and SD Capital Advisory, initial approaches to the main ECA's have commenced for the Tiris Project. Initial reactions from the ECA's have been positive with many highlighting an appetite for well-structured projects in Mauritania. Aura has maintained a flexible capital sourcing approach, and this has improved the interest from ECA's.
Initial feedback indicates that a depth of appetite exists for the project size Aura is contemplating for the Tiris Uranium Project. ECA support will afford Aura long term, low cost financing on terms more attractive than those available in the commercial bank debt market. Several critical path steps still exist before selecting and securing the best ECA package, however, the completion of the DFS as part of this process, will assist with the early positive signals from financiers.
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 the 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.
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 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.
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.
The Company has included inferred mineral resources in its mining plan that are adjacent to the identified reserves. There is a lower level of geological confidence associated with inferred mineral resources and there is no certainty that further exploration work will result in the determination of indicated mineral resources or that the production target itself will be realised.
Mr Peter Reeve
Tel: +61 (0)3 9516 6500
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