Aura Energy Ltd (ASX:AEE, AIM:AURA) is raising A$4.3 million via option funding agreements in which certain investors have agreed to prepay the exercise amount for all remaining options with the aim of to helping to grow the Tiris Uranium Project in Mauritania.
This comprises option funding agreements and an option exercise underwriting agreement for 82.5 million listed options expiring June 30, 2024.
The proceeds will be allocated to an extensional drilling program at Tiris East, which aims to define additional uranium resources.
Near-term low-cost producer
Aura chairman Philip Mitchell said: “The options funding and underwriting agreements provide valuable funding in support of our strategy to continue to grow the Tiris Uranium Project and were well supported by existing significant shareholders, including Lind Partners.
“The current exploration program is targeting expansion of our mineral resource towards 100 million pounds of U₃O₈, a globally important threshold.
“Reaching this target will reconfirm Tiris’ potential as a near-term low-cost producer, as established by our March 2023 Enhanced Definitive Feasibility Study - with the additional benefit of significantly increased scale.
“Due to the modular nature of the project, we see outstanding opportunities to grow the annual production capacity of the project in a capital-efficient way.”
The Tiris resource currently stands at 113 million tonnes at 236ppm U3O8 containing 58.9 million pounds while the conceptual exploration target at Tiris East is 30-60 million tonnes at 120-240 ppm U3O8 for 8-32 million pounds.
Agreement summary
The options are listed and have an exercise price of A$0.052 each, and on issue convert into ordinary fully paid shares in the company.
Proceeds of the option funding agreements are expected to be received by the company within five business days from the date of signing the agreements and will be repaid to investors upon receipt of option exercise money as and when current option holders exercise their options.
In addition, the company has entered into an underwriting agreement with PAC Partners Securities Pty Limited for 20 million options whereby the underwriter will receive a number of shares equal to the number of shares to be issued on exercise of 100% of the underwritten options that are not exercised.
Lind Partners, being a substantial shareholder of the company, will provide $2.2 million of funding in line with the option funding agreement.
About Aura Energy
Aura Energy is an Australian-based minerals company with major uranium and battery metals projects with significant resources in Africa and Europe.
The company primarily focuses on uranium production from the Tiris Project, a significant greenfield uranium discovery in Mauritania.
A recent enhanced feasibility study at Tiris has increased the project NPV significantly, reconfirming the project as one of the lowest capex, lowest operating cost uranium projects that remain undeveloped worldwide.
A scoping study into the Häggån Battery Metals Project in Sweden has also outlined compelling economic value.
Aura plans to follow up this study with further exploration to lift the resource categorisation alongside close collaboration with the community surrounding the project to foster support to proceed.
In 2024, Aura will continue transitioning from a uranium explorer to a uranium producer to capitalise on the rapidly growing demand for nuclear power as the world shifts towards a decarbonised energy sector.