Aura Energy starts search for Tiris uranium project development funding
Orimco appointed to arrange debt funding
Macquarie Capital engaged to identify potential strategic investors
Final investment decision expected in late 2024
Special Report: Aura Energy has kicked off the strategic dual funding workstreams aimed at securing the funds required to develop its flagship Tiris uranium project in Mauritania.
Tiris, a well-established project with a current resource of 113Mt at 236ppm U3O8 for 58.9Mlb U3O8, could play a key role in meeting future uranium demand.
High-level front-end engineering design work by Aura Energy (ASX:AEE) has estimated capex at a relatively low US$230m with payback in 2.5 years while all-in sustaining costs are forecast at just US$34.5/lb of U3O8.
This is expected to deliver post-tax net present value (NPV) and internal rate of return (IRR) – both measures of a project’s profitability – of US$366m and 34% by producing 2Mlbpa U3O8 over a 17 year mine life.
Tiris will be developed via shallow free dig open pit mining before beneficiation delivers a low-cost, high-grade leach feed averaging 1,743ppm U3O8 from an average ore feed grade of just 255ppm U3O8.
AEE’s recent definition of two new areas of extensive shallow, high-grade uranium mineralisation as well as the extension of existing resource areas is expected to deliver a significant resource upgrade, which will take it closer or even achieve its goal of defining a contained resource of 100Mlb U3O8 or more.
To top it off, the company successfully negotiated a 70% hike in future contract prices with offtake partner Curzon Uranium to pay US$74.75/lb U3O8 – more than double its expected production cost – on 150,000lb of yellowcake it will purchase over seven years.
Funding sought
The company has now appointed Orimco to arrange debt funding for Tiris and has also engaged Macquarie Capital to progress a process to identify and engage with potential strategic investors for a potential strategic investment.
Orimco has extensive experience in arranging bespoke debt programs for West African resources projects and has experience working across a broad range of commodities, projects and locations including Mauritania.
AEE noted that it has received strong interest from both highly credentialled debt providers and strategic investors who recognise the potential undeveloped future value at Tiris.
As such, it expects the funding process to deliver the optimal funding package and de-risk the development of Tiris, while optimising equity requirements and maximising the value of Tiris for its shareholders.
“The recent FEED Study ASX release concluded the Tiris Uranium Project is a near term, low cost, long life mine with exceptional further growth opportunities and recent offtake agreement further enhanced the economics with a project NPV8% of US$388M and IRR 36%, both post tax,” managing director Andrew Grove said.
“The appointment of Orimco as a debt advisor and Macquarie investigating strategic investment options are critical steps in advancing Tiris as we work towards a final investment decision at the end of 2024.”
Road to mining decision
On the route towards making a final investment decision in late 2024, the company will need to achieve the following steps:
Resource and mine planning updates following the resource drilling program
Establishment of an owner’s team
Finalisation of the construction scope and budget
Commitments to early works including water and electricity
Government development consents
Arrangements with key offtake partners
Financing for the project development
This article was developed in collaboration with Aura Energy, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
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