Aura gets 30-year guarantee for Mauritania uranium project

Aura has hit a major milestone with the Mauritanian Government signing mining conventions granting its Tiris uranium project 30 years of tenure security and fiscal certainty.

The mining conventions define the legal and economic conditions that allow mining activities to occur over a period of 30 years, which provides the company with the tax, royalty and customs stability to support financing for the project’s development.

Aura Energy (ASX:AEE) has also signed a Shareholder’s Agreement with Mauritanian state-owned Agence Nationale de Recherches Géologiques et du Patrimoine Minier (ANARPAM) which creates a long-term partnership covering the development and operation of Tiris.

The company is targeting first production from Tiris in 2024/2025 with the first stage to recover about 20% of the current contained resource of 56Mlbs of uranium.

A definitive feasibility study recently updated with 2021 capital estimates has already determined that Tiris will have low capex of US$74.8m and C1 operating costs of US$25.43/lb of U3O8, with work already underway to further improve the already attractive Tiris economics.

“With the formalisation of our Mining Convention and our partnership with ANARPAM, we are keen to work with the Government of Mauritania to develop the Tiris resource,” chairman Phil Mitchell said.

“Our increased knowledge and our belief in the quality of the resource gained from the drilling program and the expansion studies, to be released imminently, we believe will allow us to develop a world-class uranium operation.”

Minister of Petroleum, Mines and Energy Excellency Abdessalam Ould Mohamed Salah said Mauritania recognised the importance of mineral wealth and how projects such as Tiris provide revenue for the state, employment, training, and technology that benefits all Mauritanians.

“The agreement between Mauritania and Aura Energy for the development of this significant uranium project is part of the government’s strategy in the joint development of mining and energy projects in the region in oil, gas, uranium or other recoverable mineral substances,” he added.

Mining Convention and Shareholder’s Agreement

The Mining Convention between the Mauritanian Government and Aura provides stability and defines the legal and economic conditions that allow mining activities to occur over a period of 30 years.

Key aspects are accelerated depreciation in the first three years following the start of commercial production, defined state participation of up to 20%, a 25% tax rate, a royalty rate of 3.5% FOB value, and VAT exemption for the importation of movable goods, materials, equipment, vehicles, and other inputs.

It also provides Aura with the right to import and transport all mineral substances and materials related to mining activities, the right to export minerals and to trade all substances extracted, produced or processed, and the right to award all contracts provided that they are competitive on the world market.

The company is also required to adopt a human resources management policy that provides a preference – assuming equal qualifications – to Mauritanian nationals as well as a commitment to their training and development.

Meanwhile, the shareholders agreement grants ANARPAM a 15% free participation interest in Tiris and an option to acquire a further 5% at an independently determined value, which is consistent with the Mining Convention.

Tiris Resources, which will hold the interest in the project, will have three directors nominated by Aura and one nominee from ANARPAM.

ANARPAM will also be paid an early annual dividend in the first three years of the project of between US$500,000 and US$800,000 depending on the uranium price.

This article was developed in collaboration with Aura Energy (ASX:AEE), 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.