Aura Energy Ltd (ASX:AEE, AIM:AURA) is a uranium and future metals explorer and developer on the cusp of becoming a fully-fledged producer.
At present, the company’s primary focus is the Tiris Uranium Project in Mauritania, Africa, which is quickly approaching production status.
The project enjoys local government support, with the Mauritanian Government holding a 15% stake in the project, which is fully permitted with exploration and environmental permits already in place as well as a 30-year Mining Convention.
Aura is positioning Tiris to be a low-cost, long-life mine, with a mineral resource estimate of 58.9 million pounds of uranium expected to provide 16 years of project life at a post-tax net present value (NPV) of US$226 million and a post-tax internal rate of return (IRR) of 28%.
Uranium market heating up
Uranium prices were at 16-year highs in January 2024, breaking through the US$100 a pound mark.
Decarbonisation and net-zero efforts are concentrating resources in untraditional energy generation methods, moving firmly away from hydrocarbons and toward nuclear, wind and solar-generated power.
In a report on the uranium market, global investment firm Morgan Stanley (NYSE:NYSE:MS) (Morgan Stanley (NYSE:MS)) predicts uranium prices will continue to rise and has presented a bullish case of US$119 a pound as an average for the 2024 financial year.
After a decade of low activity, uranium contracting volumes are now at their highest levels since 2012 and the trend is expected to continue as Europe extends the life of its nuclear plants and more are built worldwide.
All of that makes for a hungry and growing market for uranium miners like Aura Energy, which is targeting first uranium production for late this year or early the next.
Aura has already secured an offtake financing agreement with Curzon Uranium, a London-based uranium commodities firm, worth US$10 million, with an option to double that facility.
The deal covers the sale of 800,000 pounds of uranium at fixed prices, 750,000 pounds at market-linked pricing and a further 1.05 million pounds available to Curzon as optional volumes.
Complimentary assets
Apart from the flagship Tiris project, Aura Energy also holds the Häggån Polymetallic Project in Sweden and the Tasiast South Project near Kalgoorlie, in Western Australia.
The two projects form the second prong of Aura Energy’s business strategy, which is to supply critical and battery minerals to the global market.
Häggån holds several battery metals including vanadium nickel, molybdenum and zinc, as well as sulphate of potash – a potassium mineral used in agricultural fertiliser, the supply of which has been affected by the conflict in Ukraine.
Tasiast is at an earlier stage of exploration than Häggån – Aura has already produced a scoping study for the Swedish Project – but shows potential for nickel and cobalt, as well as gold.
Together, the three projects represent Aura’s commitment to producing globally significant clean energy minerals to service the energy transition and enable a low-carbon future.
Expansive expertise
Aura Energy is headed by a team with decades of experience in the resources industry, having held senior positions in mining giants like Rio Tinto (ASX:RIO) and BHP (ASX:BHP).
Non-executive chair Phil Mitchell formerly served as head of business development and strategy and as chief financial officer at Rio Tinto.
He has extensive experience managing all aspects of the company’s asset and commodity portfolio, as well as covering all commercial aspects of the business including relationships with all JV partners and government.
Non-executive director Patrick Mutz brings a wealth of uranium experience to the company, having served as managing director and CEO of another African-focused uranium company, Deep Yellow.
He has particular experience in transitioning companies from explorers to producers – a position Aura currently finds itself in – and holds operational experience in open cut, underground, and in-situ uranium mining and related processing.
Joining Mutz as a non-executive director is Warren Mundine, a respected public figure and activist, political strategist and businessman.
He has more than 40 years’ experience working in the public, private and community sectors, and has advised successive Australian governments since 2004.
Bryan Dixon rounds out the non-executive directors for the board, offering extensive experience in the management of public and listed companies, and joint winner of the Mines and Money Asia-Pacific Mining Executive of the Year in 2017.
He specialises in project acquisition, exploration, feasibility, financing, development and operations of mining projects to production.
Finally, David Woodall serves as managing director and CEO for Aura, boasting 30 years’ experience across exploration, operations, project development, community alignment and engagement in the mineral resources industry including rare earths, critical minerals, gold, copper, iron ore and nickel.
He has held several senior positions are companies such as Rio Tinto, Fortescue Metals Group (ASX:ASX:FMG), Newcrest Mining and Ivanhoe Mines, and has overseen transformation and change in complex and difficult operating environments.