Aura Energy Ltd (ASX:AEE, AIM:AURA) has projected a post-tax net present value of US$380 million to US$1.23 billion and a post-tax internal rate of return of 26% to 47% in a scoping study for the Häggån critical minerals project in Sweden.
The study signals the scale and optionality of the project in a country that last month unveiled plans to lift a ban on uranium mining, paving the way for an expanded nuclear energy capacity.
The 65-million-tonne scoping study covers less than 3% of Häggån’s mineral resource estimate (MRE) and identifies vanadium, potash, nickel, molybdenum, zinc and uranium as among the key commodities.
Economic metrics
In demonstrating the economics of the project, the study estimated generating an operating cash flow of between US$140 million to US$270 million per annum based on an initial capital cost of US$592 million and a payback period of 1.5 to 2 years.
The study proposes a base case scenario of mining 5.9 million tonnes per annum (tpa) of V2O5 to produce about 10,400 tpa high-quality vanadium flakes; 217,000 tpa sulphate of potash (SOP) by-product for sale as fertiliser; and 3,000 tpa mixed sulphide product.
Häggån has defined an MRE of about 2 billion tonnes at an average grade of 0.3% vanadium oxide (V2O5), containing 13.3 billion pounds of V2O5 at a 0.2% V2O5 cutoff.
Häggån scoping study resource with less than 3% of the total MRE currently included in the mining plan.
Study underpins exploitation permit
“The scoping study underpins our 25-year exploitation permit application and covers less than 3% of Häggån's known 2 billion tonnes mineral resource estimate,” Aura chairman Philip Mitchell said.
“The study portends a tier-1 polymetallic mineral resource providing key minerals for a transitioning world.
“Häggån’s products are crucial to battery technology, agriculture and potentially with legislative change, low carbon, secure and affordable electricity.
“The Swedish Government acknowledges that for Sweden’s clean power system to function, a large part must be readily dispatchable and nuclear power is the only non-fossil option.”
In comments to the Times of London, Sweden’s Minister of the Environment Romina Pourmokhtari said Sweden’s plan to lift the ban on uranium extraction was backed by the majority of parliament members.
“Nearly 40 years after the completion of the country’s last new nuclear power plant, Minister Pourmokhtari has announced plans to build at least 10 large reactors to meet an anticipated surge in demand for zero-carbon power,” Mitchell noted.
More than just vanadium
While vanadium is a significant driver of Häggån’s value, it contains economically significant volumes of other strategic metals and minerals, including potassium, nickel, zinc, molybdenum and uranium.
A significant benefit of the polymetallic deposit is the potential for economically extractable sulphate of potash (SOP) as a by-product in the processing.
Aura managing director Dave Woodall added: “The Häggån ore body is massive with a richly endowed polymetallic orebody that contains significant quantities of critical metals that are essential to the rapidly growing energy transition and agricultural supply chains, including significant quantities of vanadium, potash, uranium and base metals.
“Our project can be integral to the Swedish and European supply of these critical metals that can significantly de-risk the energy transition while providing benefits to all stakeholders.”
Aura intends to undertake further infill drilling to increase Häggån’s mine life and further enhance the project economics.
Next steps
With the scoping study completed, Aura will work on submitting an application for an exploitation concession and work here will include:
- The commencement of baseline flora, fauna and water studies. These will be done using independent consultants and will be shared with the community to ensure transparency and collaboration with the project;
- Undertake a pre-feasibility study, including further resource and infill drilling, geotechnical and hydrogeological investigations, preliminary pit design scheduling options, and more detailed metallurgical test work, to further assess options, reduce risk and better define the project, and
- Commence discussions with preferred strategic partners with financial capability to advance the project.