Aura Energy’s FEED study has outlined attractive economics for its Tiris uranium project in Mauritania
Post-tax NPV and IRR estimated at US$366m and 34% respectively
Capex calculated at US$230m with payback in 2.5 years, while AISC is projected to be US$34.5/lb U3O8
Extensional drilling currently under way to grow resources from current 58.9Mlb
Final investment decision expected in late 2024
Special Report: Aura Energy now has a high level of confidence that its Tiris uranium project in Mauritania will deliver excellent economic returns after completing a key front end engineering design (FEED) study.
FEED studies are used to control project expenses and implement thorough project planning – and provide a very strong indicator of project requirements and costs given they are frequently used as the basis for bidding for engineering, procurement and construction contracts.
In short, the FEED study provides Aura Energy (ASX:AEE) with a very clear picture of how much Tiris will cost and what it can potentially deliver.
Completion of this study is therefore a welcome base for the company as it carries out extensional drilling to extend the current contained resource of 58.9Mlb U3O8 towards 100Mlb.
Drilling targeted the Tiris East exploration target of an additional 8-32Mlb of U3O8.
AEE has also applied for more exploration licences with potential to grow resources even further as a larger uranium inventory will facilitate further project expansion and optimisation.
It could also help fuel an expansion of U3O8 production beyond the currently planned production capacity of ~2 Mlb U3O8 per annum.
Attractive returns
The FEED study has sketched out Tiris as a globally significant, near-term uranium operation capable of generating post-tax net present value (NPV) and internal rate of return (IRR) – both measures of a project’s profitability – of US$366m and 34%, respectively.
Capex has been estimated at a relatively low US$230m with payback in 2.5 years, while all-in-sustaining costs (AISC) are forecast at just US$34.5/lb of U3O8, well below spot prices that have hovered above the US$100/lb mark throughout February.
This is thanks to the shallow, free dig nature of mineralisation at Tiris that lends itself to open pit mining, without the need for crushing and grinding, while beneficiation of the ore delivers a high-grade leach feed averaging 1,997ppm U3O8.
Adding interest, the FEED uses a modular design for the processing facility that provides opportunities for further capital efficient expansion and scalability.
“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,” AEE managing director Andrew Grove said.
“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.”
Next steps
AEE is currently carrying out extensional drilling to further increase resources.
It is also seeking project funding and securing offtake contracts for future production ahead of making a final investment decision (FID) late in 2024, with construction expected to take 18 months.
Other upcoming works include confirming water infrastructure to support future operations, further geometallurgy, engineering and design work to support development activities, and completion of the project execution plan.
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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