Aura outlines compelling growth opportunity for Tiris uranium project

Aura Energy presents option to boost Tiris uranium production from the third year of operations
Most prospective 6.25Mtpa option could increase NPV by 9% and annual average cashflow by 37%
Company currently focused on project financing and other activity to enable FID in Q1 2025

Special Report: Following the September 2024 update that increased mine life at its Tiris uranium mine in Mauritania from 17 to 25 years, Aura Energy has now outlined alternative production targets that highlight growth opportunities.

This follows the analysis of options to increase production capacity from the third year of operations from the 4.1Mtpa mine rate outlined in the initial development plan, which will in turn produce 2Mlb U₃O₈ per year, by accelerating the mining rate and increasing production capacity.

Aura Energy (ASX:AEE) noted the production scenarios for mining rates of 6.25Mtpa producing ~3Mlb U₃O₈ and 8.2Mtpa producing ~4Mlb U₃O₈ will not replace the base case but rather demonstrate optionality for the project once it is in operation.

Under the base case, Tiris will deliver post-tax net present value (NPV) and internal rate of return (IRR) of US$499m and 39% respectively.

Post-tax life of mine cash flow is estimated at US$1.5bn while payback is expected within 2.25 years.

The project benefits from being a proposed open pit-operation that requires just simple, low-risk, shallow, flexible, free digging without the need for crushing and grinding.

Summary of future capacity expansion options compared with September 2024 base case. Pic: Aura Energy

Improved economics

AEE’s analysis found that the 6.25Mtpa (~3Mlb U₃O₈) expansion scenario would deliver the best improvement to economics.

This scenario will increase post-tax NPV to ~US$544m, up 9% on the base case, and IRR to ~45%.

Average annual post-tax cashflow over the life of mine will increase by 37% to US$86m or US$116m over the first five years of operations.

While this will increase capex from US$230m to US$317m, this is expected to be fundable from cashflow. Payback will also increase to 2.5 years.

The company adds that this plan will use just 27% of the total defined inferred resource of 79Mt at 210ppm U₃O₈, or 36.7Mlb contained U₃O₈, at Tiris, increasing confidence that any future increases in resources will have a positive impact on this analysis.

“Today’s announcement clearly demonstrates the significant internal growth opportunity at Tiris through a future expansion of the project from Stage 1 cash flows, improving the confidence of the inferred mineral resources and further exploration success from what is a highly prospective and under-explored region with extensive un-drilled radiometric targets,” managing director Andrew Grove said, adding:

“The initial near-term Tiris uranium project development will be the start of the value creation from the project.

“Aura has excellent internal growth opportunities beyond the initial planned Tiris uranium project development providing exceptional leverage as uranium demand is forecast to grow on the back of committed development of reactors coming on stream.”

Next steps

AEE is currently focused on securing project financing through a combination of debt and/or equity, securing further offtake contracts for future production, and confirming water supply and infrastructure.

It is also engaged with qualified engineering, procurement and construction management contractors for project development, working on an update of ore reserves, and completing the project execution plan.

All this activity is aimed at enabling a final investment decision during the March quarter of 2025.

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.