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Aura Energy Limited (AURA)

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Monday 29 July, 2019

Aura Energy Limited

Tiris Project DFS completed

RNS Number : 9980G
Aura Energy Limited
29 July 2019


("Aura" or the "Company")


Tiris Project Definitive Feasibility Study


Tiris URANIUM Definitive feasibility Study completed demonstrating A robust development project


tiris is fully permitted and construction ready


key Project outcomes of the study ARe:


·      Low capital cost of US$62.9 million


·      Low C1 cash cost of US$25.43/lb U3O8


·      All-In Sustaining Cost (AISC) of US$29.81/lb U3O8


·      Production is 12.4 Mlbs U3O8 over 15 years


·      Payback period is 3.25 years


·      Maiden Ore Reserve Estimate for Tiris is 10.9 Mt @ 336 ppm U3O8




·      Total project After Tax cash flow is US$289 million (A$413 million)


·      Average After Tax cash flow of US$19.2 million pa (A$27.4 million)


·      Project IRR of 26%



"The Tiris Uranium project is one of the most compelling uranium development projects in the world at the current time"

Project Upside

·      Potential for Reserve addition via conversion from Global Resource

·      Potential for Resource addition in known mineralised areas

·      Exploration of known targets in project area

·      Vanadium production from leach solution

·      3 Mlb U3O8 pa expansion case potential

·      Optimisation of reagent use

·      Optimisation of beneficiation in production to increase throughput

·      Production optimisation of current Reserve Estimation

·      Fully Permitted for development1

·      Exploitation Licence granted

·      Environment Approval granted

·      Competitive uranium off-take contract in place

·      Export Credit Agency Finance achieving a very promising response

·      Mincore Engineering acted as overall Project Engineer

·      Simulus Engineering performed Leach Plant Engineering

·      Adelaide Control Engineering (ACE) - U3O8 recovery and packaging


·      Tiris has one of the lowest uranium development capital costs of the current uranium projects

·      Robust capital development estimate with 85% of cost estimated from direct supplier quotes

·      Development capital cost very competitive versus LOM capital cost for in-situ leach projects with repeat development capital

·      Low development cost enables rapid development relative to peers

·      Tiris' AISC is among the lowest in the world

·      Many peer companies quote Pre-Tax project financials

1 Minor operating permits will be required 


Aura Energy Limited (AEE; ASX, AURA; AIM) is pleased to advise that the Tiris Uranium Definitive Feasibility Study (DFS) has been completed and has confirmed the Tiris Uranium Project as a low capital cost and low operating cost development opportunity.


"The completion of the Tiris Uranium Project Definitive Feasibility Study has concluded that the project possesses both a very low capital development cost and a very low operating cost, and validates Aura's long held view that the Tiris Project is one of the most compelling uranium development projects in the world at the current time", Mr Peter Reeve, Aura's Executive Chairman, said.


"In the current uranium market environment, a key attribute of any uranium development project is the capital cost of development. Aura has strived through the entire DFS to maintain this cost at the lowest level possible whilst retaining a robust development design. With the $US62.9 million capital defined, where 85% of the capital estimate from supplier quotes, Aura now stands among its peers as having one of the lowest, if not the lowest, all in life of mine capital of any of the currently proposed uranium development projects".


"A number of very good in-situ leach projects state low upfront capital, however, the 'repeat development capital' required in many of these projects in their early years needs to be considered as development capital. Aura in many instances competes very well with these projects" Mr Reeve continued.


"The capital figure is exceptionally important as in tough markets it talks to the do-ability of the project and Tiris' small footprint and low capital cost makes this project poised for quick development once financing is achieved. We have often spoken of the 'building blocks to cashflow' and the completion of the DFS sets another of those building blocks in place and puts Aura on a path for producer status and cashflow" Mr Reeve said.


"Additionally, the All-In Sustaining Cash Cost of $US29.81/lb U3O8 is extremely competitive when compared to our uranium development peers. The benefits of shallow mining and the beneficiation stage in the process, which leads to a small project footprint, have shown to be positive for the project's operating cost."


"Several areas of project upside also exist including potential for reserve and resource upside, expansion potential to 3 Mlbs U3O8 per annum, vanadium recovery and project optimisation across a range of mining and processing areas. As such, Aura is confident that the operating team will be able to improve the project and financial outcomes in the production phase."


"The next technical steps of the project are to further optimise the capital cost where possible, optimise elements of the process to reduce operating cost, and to validate the vanadium recovery option. In parallel, the promising start to the Export Credit Agency Finance process will intensify in the coming months as the ECA finance short-list is finalised" Mr Reeve concluded.

Capital Cost


The Tiris Project capital cost is US$62.9 million.


Engineering company, Mincore, provided the capital cost estimate for the Tiris Project. This includes the scope of facilities and services required to design, purchase and construct the entire project, up to practical completion and handover to operations.


Table 1

Tiris Project Capital Cost Summary



Cost (U$M)

Mining (contract mining assumed) 


Process Plant 






Owner's cost 




Total Capital Cost 



An exhaustive in-country engineering review was conducted including all infrastructure needs, particularly the road infrastructure to site. Of the 680 km road from Zouerate to Tiris, only 2km will require substantial roadworks.


Significantly, 85% of the capital cost for the Tiris Project has been sourced from direct supplier quotes. As a result of this thorough estimating approach, Aura is confident that the capital cost estimate for Tiris Uranium Project is robust.


No direct mining capital costs are outlined, as infrastructure to support the mining operations is included in the infrastructure numbers, there is no pre-strip required and mining costs are based direct supplier quotes from a number of mining contractors with all mobile equipment costs included in the operating cost estimation received.


Operating Cost


The C1 cash cost will be US$25.43/lb U3O8.


The All-In Sustaining Cost (AISC) will be US$29.81/lb U3O8.


The operating cost estimate is summarised in the table below. 



Table 2

Tiris Project Operating Cost Summary



US$/lb U3O8

Contract Mining 












Total cash cost (C1) 


All In Sustaining Cost (AISC)



The AISC is inclusive of royalties, LOM sustaining capital, insurances and product transport.  These costs have been estimated as an average of annualised expenditure. 


Project Outcomes Summary


Table 3

Project Outcomes Summary



Key Metric



Life of Mine (LOM)

15 Years

Beneficiation Plant ore throughput (Design)

1.25 Mtpa

Process Plant ore throughput

0.16 Mtpa

ROM uranium grade (LOM)

364 ppm U3O8


Uranium Metallurgical Recovery


Average Annual uranium production

823,000 lb U3O8

LOM uranium production

12.35 Mlb U3O8



Financial Outcomes Summary


Table 4

Financial Outcomes Summary



Key Metric





Mining, plant, infrastructure, indirects

57.37 M


88.26 M


5.57 M


8.57 M

Total Capital

62.94 M


96.83 M


Exchange rate (USD:AUD)


C1 Cash operating cost ($/lb U3O8)




AISC operating cost ($/lb U3O8)




Project Financials

Assumed price (baseline) ($/lb U3O8)




Project NPV8 (incl Royalties and tax)

89.9 M


128 M

Project IRR (incl Royalties and tax)


Cashflow - Total (after-tax)

289 M


413 M

Cashflow - Annual (after-tax)

19.2 M pa


27.4 M pa

Project NPV8 (incl Royalties, pre-tax)

114 M


163 M

Project Cashflow - Total (pre-tax)

351 M


501 M

Project Cashflow - Annual (pre-tax)

23.4 M pa


33 M pa

Project payback from start-up

3.25 years


Uranium Price Sensitivity


The table below outlines the project financials at both US$60/lb U3O8 and US$50/lb U3O8.


Table 5

Project Financials



Uranium Price

US$60/lb U3O8

US$50/lb U3O8



Project cashflow total (pre-tax)

US$351 M

A$501 M

US$261 M

A$373 M




Project cashflow - per annum (pre-tax)

US$23.4 M

A$33.4 M

US$16.3 M

A$23.3 M




Project cashflow total (after-tax)

US$289 M

A$412.9 M

US$204 M

A$291.4 M




Project cashflow - per annum (after-tax)

US$19.2 M

A$27.4 M

US$13.6 M

A$19.4 M




NPV8 (including royalties, pre-tax)

US$114 M

A$162.9 M

US$60.5 M

A$86.4 M




NPV8 (including royalties, after-tax)

US$89.9 M

A$128.4 M

US$44.9 M

A$64.1 M


ECA Finance Status


Export Credit Agency (ECA) financing continues to be our main funding focus for Tiris and then later for the Häggån Project. Through our advisors GKB Ventures and SD Capital Advisory, initial approaches to the main ECA's have commenced for the Tiris Project. Initial reactions from the ECA's have been positive with many highlighting an appetite for well-structured projects in Mauritania. Aura has maintained a flexible capital sourcing approach, and this has improved the interest from ECA's.


Initial feedback indicates that a depth of appetite exists for the project size Aura is contemplating for the Tiris Uranium Project.  ECA support will afford Aura long term, low cost financing on terms more attractive than those available in the commercial bank debt market. Several critical path steps still exist before selecting and securing the best ECA package, however, the completion of the DFS as part of this process, will assist with the early positive signals from financiers.  




Of four water sourcing options identified by hydrological consultants, Aura's water search and development activities have focussed on the closest source, the Oued El Foule Depression, an extensive drainage system, the central axis of which is less than 20 km from the Tiris plant site.


Aura has undertaken a significant program of water study and review which identified a number of major structures likely to host water and included a program of ground geophysics over 24 structural targets within 50 km of the proposed plant. 15 of the most promising targets have been selected for drilling and testing is underway.


On one of the structures identified by Aura, drilling successfully located water in two bores.  Of four holes drilled in the area, two successfully located good volumes of water, with one producing 15,000 litres per hour. The 50% strike rate in drilling bodes well for the location of additional water sources in the same geology and indicates a strong likelihood that the current drilling program will locate additional water supply for the relatively low water requirement of the Tiris Project.  


The water testing and development program will continue for a period of time beyond the completion of the DFS and during construction.


Reserve Estimate


The Ore Reserve estimate was generated by Mining Plus. The overall project financial model was prepared by Aura using inputs from the mining schedule physicals and the cost model.  Detailed processing, tailings disposal, power, water, camp infrastructure and logistics, and other costs were also developed as part of the Feasibility Study. Mining Plus reviewed the cash flow model with Aura to ensure that the project has a positive cash flow outcome, and this has been confirmed.


The declared Ore Reserve, at a 175 ppm U3O8 cut off is shown in Table 6.


Table 6

Ore Reserve




U3O8 (ppm)

U3O8 (Mlb)

Lazare North









Lazare South
































The Ore Reserve was generated from the Mineral Resource Estimate produced by H&S Consultants (Sydney) with the appropriate modifying factors to apply for mining dilution. This Resource model was used in an open pit optimisation process to produce a range of pit areas using operating costs and other inputs derived from previous studies. Mining costs were built up from estimates derived from equipment supplier and mining contractor submissions and applied to a detailed mine schedule.


The Ore Reserve is based on information compiled by the following:


·    Revenue prices, based on historical averages and forward estimates, based on Offtake Agreement with Curzon Resources provided by Aura.

·    Processing recoveries based on the geo-metallurgical model developed by Aura.

·    Mineral Resource estimate, H&S Consultants, 1 May 2018.

·    Pit optimisation and mine design completed by Mining Plus.

·    Capital costs, Mining Plus, Mincore, Simulus Engineers, Adelaide Control Engineers (ACE) and Aura.

·    Operating costs, Mining Plus, Mincore, Simulus Engineers, ACE and Aura.


Vanadium Potential


Vanadium occurs with uranium in carnotite, the host mineral for uranium in the Tiris Project as potassium uranium vanadate (K2(UO2)2(VO4)2·3H2O). Vanadium hosted with carnotite is leached alongside uranium in the Tiris extraction circuit. Aura has conducted preliminary evaluation on the feasibility of vanadium recovery from solution. The Tiris project value, which is driven by low operating and development capital costs, would benefit further with vanadium recovery which is considered technically achievable.

Vanadium occurs in the Tiris ore at a grade of 330 ppm V2O52, a similar concentration to that of U3O8. Approximately half of this vanadium occurs within the uranium host mineral carnotite.


2 Vanadium has been assayed in approximately 1 in 10 of all Tiris drillhole samples. Within all of Aura’s Tiris uranium mineralised drillhole samples (that is samples containing greater than 100 ppm U3O8, 402 samples have been assayed for vanadium and these average 330 ppm V2O5.



Uranium Market


Aura continues to monitor the uranium market with the assistance of its advisors.

The uranium market has recently been consumed with the US Department of Commerce (DOC) Section 232 trade investigation which lead to some weakness in the uranium spot price. With Section 232 now resolved, a degree of uncertainty has been removed allowing market participants to re-engage with certainty in the uranium market.

Aura has long maintained that the return to the Long-Term Contracting market by utilities will be a key driver in sentiment for uranium and strongly impact the uranium price. Our UK based advisors note an increasing focus from utilities on the low level of contract coverage in both 2021 and 2022. There is potential for near term improved market conditions should this level of contracting be increased.


We also note the following pertinent comments from Cameco's recent Q1 results:


·    In the quarter, we also saw the interest in long-term contracting start to pick up. With the decreasing primary supply as a result of curtailments, and the competition for supply in the spot market from producers and financial players, we are beginning to have off-market conversations with some of our best and largest customers about what it takes to support the operation of our tier-one assets longer term.


·    These customers recognize the risk overreliance on finite sources of supply poses to security of supply longer term and want first-mover advantage. In light of the market access and trade policy issues affecting our market, they are increasingly looking for stable, commercial suppliers with long-lived, tier-one assets.


Comparison with Scoping Study


In 2014 Aura released a Scoping Study on the Tiris Project and it was updated in 2017. In general, the results of the DFS support the ongoing confidence Aura has had in the project since 2014.


The comparison of the DFS capital cost estimate with the Scoping Study showed an increase of 21% from the 2014 escalated estimate. This is a good result given the greater detail in the DFS estimate. Importantly, the estimate for the main processing facility was within 3% between the studies.

Table 7

Comparison of Scoping Study and DFS CAPEX estimate.  2014 Scoping Study costs escalated to 2019 values for comparison purposes



Scoping Study


Scoping Study

esc to 20194











Process Plant 












Owner's cost 








Total Capital Cost 





3 ASX Announcement: “Reguibat scoping study complete”, 16th July 2014.

4 2014 Scoping Study Capital Costs escalated at a rate of 3% pa to 2019.  Based on average escalation value in AUD.

5 Contract mining has been assumed for Definitive Feasibility Study


Comparison of estimated OPEX demonstrated an overall reduction in operating costs between the Scoping Study and DFS of 14%.  These reductions were predominantly achieved in optimisation of reagent consumption.


When compared with the August 2017 operating cost adjustment, the increase is largely attributed to the decision to utilise contract mining, rather than an owner operated fleet.  This transferred expenditure from Capital to Operating costs and accounts for a significant proportion of the operating cost difference.


Next Steps

Aura will now focus its attention to:


·    Primarily securing the funding package for the Tiris Uranium Project.

·    Further optimise elements of the Tiris DFS.

·    Complete the full water drilling program.


The Export Credit Agency finance process, as discussed, is beginning to create extensive interest for the funding of the project.


ECA finance allows national governments to provide support to development projects in a range of sectors and in return for that support, the project developer is required to source a significant proportion of a project's goods and services from the host country.

In 2017, ECA backed support reached upwards of US$85 billion of which approximately 60% was assigned to developing and emerging markets.


Project capital expenditure makes these projects eligible for ECA support, enabling medium to long term financing to be provided alongside any minor commercial debt funding and equity. ECA's provide political and commercial guarantees covering up to 85% of the CAPEX program. Such guarantees increase the pool of liquidity for long term funding at rates which are deemed attractive.


Cautionary Statement

This report may contain some references to forecasts, estimates, assumptions and other forward-looking statements. Although Aura believes that its expectations, estimates and forecast outcomes are based on reasonable assumptions, it can give no assurance that they will be achieved.


They may be affected by a variety of variables and changes in underlying assumptions that are subject to risk factors associated with the nature of the business, which could cause actual results to differ materially from those expressed herein.


The Company has included inferred mineral resources in its mining plan that are adjacent to the identified reserves. There is a lower level of geological confidence associated with inferred mineral resources and there is no certainty that further exploration work will result in the determination of indicated mineral resources or that the production target itself will be realised.


For further information please contact:



Aura Energy Limited

Peter Reeve (Executive Chairman)

Telephone: +61 (3) 9516 6500

[email protected]

WH Ireland Limited

(Nominated Adviser and Joint Broker)

Adrian Hadden

James Sinclair-Ford


SP Angel Corporate Finance LLP

(Joint Broker)

Ewan Leggat

Jamie Spotswood

Telephone: +44 (0) 207 220 1666





Telephone: +44 (0) 203 470 0470


Yellow Jersey PR Limited

Felicity Winkles

Joe Burgess


Telephone: +44 (0) 7769 325 254


The information contained within this announcement is deemed by the Company to constitute inside information under the Market Abuse Regulation (EU) No. 596/2014.


Glossary of terms

Set out below are key terms referred to in the ASX announcement for the Resource Estimate


Carnotite                                                   is a hydrated uranium, vanadium and potassium oxide with the mineral formula  K2(UO2)2(VO4)2·3H2O and approximately 53% of carnotite by weight is uranium.


Competent Person                                    is a minerals industry professional who is a Member or Fellow of The Australasian Institute of Mining and Metallurgy, or of the Australian Institute of Geoscientists or of a Recognised Professional Organisation, as included in a list on the JORC and ASX websites.  A Competent Person must have a minimum of five years relevant experience in the style of mineralisation or type of deposit under consideration and in the activity which that person is undertaking;


Cut-off grade                                             the lowest grade, or quality, of mineralised material that qualifies as economically mineable and available in a given deposit;


Gamma logging                                        a method of estimating uranium concentration in a drill hole by measuring radioactivity emitted by the mineralisation


Grade                                                        any physical or chemical measurement of the characteristics of the material of interest in samples or product;


g/t                                                              grams per tonne (where 1 gram per tonne = 1 ppm)


Indicated Resource                                   is that part of a Mineral resource for which quantity, grade (or quality), densities, shape and physical characteristics are estimated with sufficient confidence and detail to support mine planning and evaluation of economic viability of the deposit.


Geological evidence is derived from adequately detailed and reliable exploration, sampling and testing gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes and is sufficient to assume geological and grade (or quality) continuity between points of observation where data and samples are gathered;


Inferred Resource                                     that part of a Mineral Resource for which quantity and grade (or quality) are estimated on the basis of limited geological evidence and sampling.  Geological evidence is sufficient to imply but not verify geological and grade (or quality) continuity.  It is based on exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes;


JORC                                                          the Australasian Code for the Reporting of Exploration Results, Mineral Resources and Ore Reserves, as published by the Joint Ore Reserves Committee of The Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Minerals Council of Australia;


JORC 2012                                                 the 2012 edition of the JORC Code


LBS                                                             pounds (where 2.2046 pounds = 1 kilogram)


Measured Resource                                  is that part of a Mineral Resource for which quantity, grade (or quality), densities, shape and physical characteristics are estimated with confidence sufficient to support detailed mine planning and final evaluation of the economic viability of the deposit.  Geological evidence is derived from detailed and reliable exploration, sampling and testing gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes and is sufficient to confirm geological and grade (or quality) continuity between points of observation where data and samples are gathered;


Mineral Resource                                     a concentration or occurrence of material of economic interest in or on the earth's crust in such form and quantity that there are reasonable and realistic prospects for eventual economic extraction.  The location, quantity, grade, continuity and other geological characteristics of a Mineral Resource are known, estimated from specific geological evidence and knowledge, or interpreted from a well-constrained and portrayed geological model;

Mlb                                                            million pounds;


Mt                                                              Million tonnes;

Ore Reserve                                              Ore Reserves are those portions of Mineral Resources that, after the application of all Modifying Factors, result in an estimated tonnage and grade which, in the opinion of the Competent Person making the estimates, can be the basis of a technically and economically viable project, after taking account of material relevant Modifying Factors. Deriving an Ore Reserve without a mine design or mine plan through a process of factoring of the Mineral Resource is unacceptable;

ppm                                                           parts per million by weight;


Probable Reserve                                      The economically mineable part of an Indicated, and in some circumstances, a Measured Mineral Resource. The confidence in the Modifying Factors applying to a Probable Ore Reserve is lower than that applying to a Proved Ore Reserve.;


Proven Reserve                                         The economically mineable part of a Measured Mineral Resource. A Proved Ore Reserve implies a high degree of confidence in the Modifying Factors;


Radioactive equilibrium                            is the condition in which a radioactive substance and its radioactive decay products have attained such proportions that they all disintegrate at the same numerical rate and therefore maintain constant proportions. In geologically young uranium deposits, radioactive decay products may not have attained equilibrium concentrations.  In this situation gamma radiation used to measure uranium concentration, which is emitted principally by the radioactive daughter products rather than by uranium itself, will underestimate uranium concentration;


U3O8                                                           uranium oxide.



Competent Persons

The Competent Person for the information in this report that relates to Tiris Mineral Reserves is based on information compiled and reviewed by Mr Andrew Hutson, a Competent Person who is a Fellow of the Australian Institute of Mining and Metallurgy (AusIMM) and a full-time employee of Mining Plus Pty Ltd. Mr Hutson has sufficient experience which is relevant to the style of mineralisation and type of deposits under consideration and to the activity which he has undertaken to qualify as a Competent Person as defined in the JORC Code 2012. Mr Hutson has no economic, financial or pecuniary interest in the company and consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.

The Competent Person for drill hole data and for aggregating the 2018 and 2011 resource estimates is Mr Neil Clifford.  The information in the report to which this statement is attached that relates to drill hole data and to aggregation of the resource estimates is based on information compiled by Mr Neil Clifford.  Mr Clifford has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking.  This qualifies Mr Clifford as a Competent Person as defined in the 2012 edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Clifford is an independent consultant to Aura Energy.   Mr Clifford is a Member of the Australasian Institute of Mining and Metallurgy (AusIMM). Mr Clifford consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.


The Competent Person for the Tiris Metallurgical Testwork is Dr Will Goodall. The information in the report to which this statement is attached that relates to the testwork is based on information compiled by Dr Will Goodall. Dr Goodall has sufficient experience that is relevant to the testwork program and to the activity which he is undertaking. This qualifies Dr Goodall as a Competent Personas defined in the 2012 edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Dr Goodall is a Member of The Australasian Institute of Mining and Metallurgy (AusIMM). Dr Goodall consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

1.1       Section 4 Estimation and Reporting of Ore Reserves

(Criteria listed in section 1, and where relevant in sections 2 and 3, also apply to this section. Presented in ASX Release: "Tiris Resource Upgrade Success", 30th April 2018)


JORC Code explanation


Mineral Resource estimate for conversion to Ore Reserves

·   Description of the Mineral Resource estimate used as a basis for the conversion to an Ore Reserve.

·   Clear statement as to whether the Mineral Resources are reported additional to, or inclusive of, the Ore Reserves.

·   The Lazare and Hippolyte Mineral Resource was provided to the ASX 30th April 2018 for the Tiris Project and forms the basis of this Ore Reserve. The Mineral Resource update was reported in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves, (JORC Code 2012) and validated by H&S Consultants Pty Ltd.

·   The Mineral Resources are inclusive of the Ore Reserves.

Site visits

·   Comment on any site visits undertaken by the Competent Person and the outcome of those visits.

·   If no site visits have been undertaken indicate why this is the case.

·   Andrew Hutson of Mining Plus (Competent Person) has not visited the site. Due to the small scale of the project, the low complexity of mining and the time required to visit the site within the timeframe of the project a site visit was not warranted.

·   Andrew Hutson has worked for a number of uranium mining operations including one of similar mineralogy, mining and processing methodologies.


Study status

·   The type and level of study undertaken to enable Mineral Resources to be converted to Ore Reserves.

·   The Code requires that a study to at least Pre-Feasibility Study level has been undertaken to convert Mineral Resources to Ore Reserves. Such studies will have been carried out and will have determined a mine plan that is technically achievable and economically viable, and that material Modifying Factors have been considered.

·   The Ore Reserve estimate was based on the Feasibility Study (FS) for the Tiris Project on data built from the PFS and updated from the Definitive Feasibility Study (DFS).

·   Financial modelling completed to support this Ore Reserve estimate is based on the FS and this modelling shows that the Ore Reserve is economically viable at U3O8 metal prices supported by consensus longterm contract uranium price scenarios in the range of US$40-50/lb U3O8.

·   It should be noted the economic analysis does not include revenue from the Inferred resource.


Cut-off parameters

·   The basis of the cut-off grade(s) or quality parameters applied.

·   The cut off grade used to determine ore tonnes is 175 ppm U3O8

Mining factors or assumptions

·   The method and assumptions used as reported in the Pre-Feasibility or Feasibility Study to convert the Mineral Resource to an Ore Reserve (i.e. either by application of appropriate factors by optimisation or by preliminary or detailed design).

·   The choice, nature and appropriateness of the selected mining method(s) and other mining parameters including associated design issues such as pre-strip, access, etc.

·   The assumptions made regarding geotechnical parameters (eg pit slopes, stope sizes, etc), grade control and pre-production drilling.

·   The major assumptions made and Mineral Resource model used for pit and stope optimisation (if appropriate).

·   The mining dilution factors used.

·   The mining recovery factors used.

·   Any minimum mining widths used.

·   The manner in which Inferred Mineral Resources are utilised in mining studies and the sensitivity of the outcome to their inclusion.

·   The infrastructure requirements of the selected mining methods.

·   Aura Energy proposes to use conventional mining methods employing backhoe excavators and dump trucks to expose and recover the ore. The mining method proposed is utilised world wide and is low risk. No drilling and blasting of the ore or overlying materials is planned due to the unconsolidated nature of the materials.

·   Due to the shallow nature (<5m) and the short time which the mining voids are open before backfilling no pit slope geotechnical work was required.

·   Only Proved and Probable Ore Reserves are used as ore within the mine production schedule and financial modelling. Inferred Mineral Resource for the purpose of the Ore Reserve estimate is treated as waste which has been economically carried by the Ore.

·   The mine production schedule assumes effective operation of the mining fleet and is based on realistic utilisation estimates

·   The geological block models used as basis for Ore Reserve are MIK recoverable resource models and as such no additional mining dilution or recovery factors have been added

·   Pit optimisations were carried out using Daussalt Whittle software. Whittle was also used to analyse the sensitivity of the resource models over variations of -30% to + 30% to the following parameters in order to define the effects on project ore tonnage, total tonnes mined, contained metal and undiscounted cash flow;

o Mining cost

o Uranium price

o Processing cost

o Plant recovery


Metallurgical factors or assumptions

·   The metallurgical process proposed and the appropriateness of that process to the style of mineralisation.

·   Whether the metallurgical process is well-tested technology or novel in nature.

·   The nature, amount and representativeness of metallurgical test work undertaken, the nature of the metallurgical domaining applied and the corresponding metallurgical recovery factors applied.

·   Any assumptions or allowances made for deleterious elements.

·   The existence of any bulk sample or pilot scale test work and the degree to which such samples are considered representative of the orebody as a whole.

·   For minerals that are defined by a specification, has the ore reserve estimation been based on the appropriate mineralogy to meet the specifications?

·   The metallurgical process proposed is conventional beneficiation with heated alkaline uranium leach and ion exchange.

·   All metallurgical processes proposed are well tested technology and appropriate for the styles of mineralisation.

·   Extensive metallurgical test work has been undertaken and included:

o Material characterisation mineralogy (ANSTO Minerals)

o Geometallurgical testing

o Scrubbing tests (AMML)

o Screening and beneficiation tests (AMML)

o Diagnostic leaching (ANSTO Minerals)

o Rheological characterisation of leach feed and post-leach slurries. (Rheological Consulting Services)

o Ion exchange test work and modelling (ANSTO Minerals)

o Sodium Diuranate (SDU) precipitation and dissolution. (ANSTO Minerals)

o UOC precipitation and product characterisation (ANSTO Minerals)

o Rotary scrubbing and Derrick screening pilot study. (Mintek, South Africa)

o Steady state simuluation (ANSTO Minerals, Aura Energy, Simulus)

·    Metallurgical domaining was defined based on two geometallurgical studies on spatially representative trench samples from the Hippolyte, Lazare North and Lazare South Resources.  Geometallurgical domains were defined based on uranium upgrade factor at target screen cut size of 150µm and Sulphate mineral rejection factor. 

·    Uranium recovery between 84.6% and 86.6% was achieved, dependent on geometallurgical domain.

·    Deleterious minerals were identified as gypsum (CaSO4.2H2O) and Celestine (SrSO4).  These minerals were monitored in geometallurgical domaining and included in domain definition parameters to manage impact on process.  Clay minerals were also identified as potentially deleterious and monitored through inclusion of particle size distribution definitions in geometallurgical domaining.  Results of metallurgical test work were undertaken in a staged approach with a focus on assessment of process variability.  Bulk bench scale assessment of beneficiation and leaching was undertaken on 120-150kg composite samples representative of geometallurgical domains scheduled for the first 6 years of operation.  The beneficiation circuit (rotary scrubbing plus screening) was assessed at pilot scale on 500kg composite samples representative of geometallurgical domains scheduled for the first 6 years of operation.  All metallurgical testwork completed on process circuit components was supported by Steady State Simulation modelling.  The geometallurgical domain composite samples on which these metallurgical results is based is from Aura's trench sampling program completed in 2018 across the Lazare North and Lazare South Resources. (ASX release: Quarterly report June 2018 and Appendix 5B, 31st July 2018).  Trench locations were selected to correspond to diamond drill (DD) locations from 2017 drilling program (ASX Release: Tiris Resource upgrade success, 30 April 2018) as reported in ASX release: Quarterly report June 2018 and Appendix 5B, 31st July 2018.  A total of 11 trenches were excavated (8 Lazare South and 3 Lazare North) to a depth of 4m.  Trenches were oriented west to east and sampling was undertaken by channel sampling of north and south walls at 0.5m depth intervals.  Interval samples were not split on site.  Trench interval samples were split at Aura Energy's Nouakchott laboratory by rotary splitter divider (RSD).  A minimum 2kg sub sample was collected for assay, a 1kg sub sample was collected for geometallurgical test work, a 2kg sample was collected for reference and the remainder was stored as inputs for bulk metallurgical composite preparation.  Given the fine grained nature of the uranium minerals these sample sizes are appropriate.  Sub samples for assay were sent to ALS Minerals, Nouakchott where they were crushed by jaw crusher to -12mm and 1kg was riffle split for pulverising to +85% passing 75 microns.  An c. 100g split was bagged and sent for analysis by pressed pellet XRF.  Previous analysis comparing different analytical methods (XRF, ICP, DNC) had indicated that XRF is an accurate method on this material, if an x-ray band is selected for measurement that is not affected by the presence of strontium, and this was done.  This method will measure total uranium.  A sub-split of assay samples was prepared by ALS Laboratories Nouakchott by Method Prep 22 (Crush to 70% less than 6mm, pulverize entire sample to better than 85% passing 75 microns).  An c. 100g sample of pulp was split off using mini-riffle splitter, placed in sample envelope and forwarded by air to ALS in Ireland for uranium analysis by ALS Method U-MS62 (U by ICP-MS after 4 acid digestion).  4 acid digestion provides near total extraction.  Geometallurgical samples for each interval were screened at 1mm, 300µm, 150µm and 75µm and fractions weighed and assayed by portable XRF.  A split of the -75µm fraction for each interval was collected by RSD and sent to ALS Minerals for uranium analysis by ALS Method U-MS62 (U by ICP-MS after 4 acid digestion).  4 acid digestion provides near total extraction.  The results of assay and geometallurgical analysis were analysed to define process behaviour based geometallurgical domains.  Three domains were identified (2 x Lazare South and 1 x Lazare North).  These formed the basis for generation of bulk composite samples for metallurgical test work.  Interval samples were sent to Australian MinMet Metallurgical Laboratories (AMML), Gosford, Australia where they were combined based on composite definitions and mixed by rolling barrel.  Composited samples were assayed by Direct Neutron Activation and pressed pellet XRF by Australian Nuclear Science and Technology Organisation (ANSTO Minerals), Lucas Heights, Australia.  Composite sample head assays were well reconciled with weighted average grade calculated from input interval samples.

·    Aura's UOC product complies with ASTM standards for commercial sale to uranium converters.  Analysis of the UOC falls within sales specifications provided by the major uranium conversion facilities. Therefore, no allowance is made for deleterious elements.



·   The status of studies of potential environmental impacts of the mining and processing operation. Details of waste rock characterisation and the consideration of potential sites, status of design options considered and, where applicable, the status of approvals for process residue storage and waste dumps should be reported.

·   The major studies incorporated by the Environmental Impact Study (ESIA) included the following:

o Archaeology and Cultural Heritage

o Ecology and Biodiversity

o Meteorology, Air Quality, Noise and Vibration

o Radiation Impact Assessment

o Socio-economic, Health, Transport and Security

o Hydrology, Hydrogeology and Water

·    Waste rock, beneficiation reject, and process plant tailings are inert and will disposed of in mined out pits.  The final location for all waste products is backfilled into the mining voids, however some stockpiling will be required until pit voids become available. It is planned that the process plant tailings will be preferentially placed into the mining voids followed by the coarser screening plant rejects and finally the mine waste and overburden.  The processing plant tailings are a filtered product at a 63% solids density and will be transported from the plant to the mine by truck at an average rate of 20 dry tonnes per hour.

·    The ESIA has been approved by the Mauritanian government and exploitation licence has been granted (ASX release: 5th October 2017)


·   The existence of appropriate infrastructure: availability of land for plant development, power, water, transportation (particularly for bulk commodities), labour, accommodation; or the ease with which the infrastructure can be provided, or accessed.

·   The Tiris site is a remote site located 680km from the closest settlement of Zouerat and 1440km from the Mauritanian Capital, Nouakchott.

·   Access to all land required as been granted as part of the Exploitation Licence (ASX release: TIRIS URANIUM PROJECT EXPLOITATION LICENCE GRANTED, 18/12/2018).

·   Transportation will be by access road to Zouerat, maintained by the operation.  A uranium transport plan has been developed for safe transport of uranium product based on IAEA guidelines.

·   Power will be supplied by series of diesel generator power plants at key process sites.  The power supply for the main processing plant and camp will be supplemented by 50% solar generation capacity.

·   Water will be sourced and pumped from remote bores and pumping station within a 30km radius of the main processing facility.

·   A camp for accommodation of up to 146 personnel will be provided at the operation.


·   The derivation of, or assumptions made, regarding projected capital costs in the study.

·   The methodology used to estimate operating costs.

·   Allowances made for the content of deleterious elements.

·   The source of exchange rates used in the study.

·   Derivation of transportation charges.

·   The basis for forecasting or source of treatment and refining charges, penalties for failure to meet specification, etc.

·   The allowances made for royalties payable, both Government and private.

·    The mine, process plant and infrastructure capital cost estimate for a 1.25Mtpa operation was prepared by MinCore Engineers from information developed in-house by Aura Energy.  The basic key information package provided by Aura included block Process Flow Diagrams (PFDs) as well as key Design Criteria to allow an extension of the design by others.  Based upon this package of information, external consultants were employed to further develop sufficient engineering to allow preparation of scope of work, lists, datasheets, specifications and bill of quantities relevant to the scope.  Much of the engineering and the preparation of the capital cost estimate was performed by Mincore Pty Ltd.    The scope for the facilities also consists of two specialised plant areas and these were separately engineered for both quantities and prices.  The specialised plant areas include:

o Fluid Bed Precipitation, Calcining and Drum Packing Plant developed by Adelaide Control Engineering.  

o Leach and Uranium Recovery plant developed by Simulus Engineers. 

·    Cost estimate was prepared for the Feasibility Study and the cost estimate is compliant to Australasian Institute of Mining & Metallurgy (AusIMM) Class 3 estimate with an accuracy -15% to +20%. Capital costs included the process facilities, site infrastructure, utilities and support facilities and a contingency and for the DFS totalled USD62.96M


DFS operating costs for mining, treatment and G&A were derived from first principles by MiningPlus Consultants (mining), Simulus Engineers, Adelaide Control Engineering and Aura Energy (treatment and services) and Aura Energy (G&A), with input in all areas from MinCore Engineers.  For the DFS the average mining cost was estimated at ($3.45/t) and the average mill throughput cost (processing plus G&A) was US$15.51/t milled.

·                      As the revenue from uranium sales is effectively received in US$ exchange rates for the Mauritanian Ouguiya and to a much lesser extent other currencies have been used at the prevailing public mid-rate when costs have been estimated.

·    Transportation and local freight costs have been provided by international and local suppliers as part of the estimation of capital and operating costs and are well established for projects in Mauritania.

·    The royalty paid to the Mauritanian government will be 3.5% of net sales revenue at uranium price up to US$42/lb U3O8 and 4.9% of net sales revenue at uranium price greater than US$42/lb U3O8.

Revenue factors

·   The derivation of, or assumptions made regarding revenue factors including head grade, metal or commodity price(s) exchange rates, transportation and treatment charges, penalties, net smelter returns, etc.

·   The derivation of assumptions made of metal or commodity price(s), for the principal metals, minerals and co-products.

·   A financial model for the Tiris Uranium Project has been developed by Aura Energy for the DFS.

·   The quantity of ore and head grade delivered to the mill each year is estimated using the optimised block model over the life-of-mine.

·   Metallurgical recoveries are then applied to the mine schedule to calculate final yearly production volumes.

·   Fixed and variable unit costs for mining on an US$/t waste or ore and US$/t ROM for processing have been applied to generate the annual operating cost for the Project.

·   Uranium price is based on the long term consensus incentive price to stimulate development of new uranium projects sufficient to meet a range of market demand forecasts.

Revenues for Ore Reserve calculations have been based on the US$ uranium price (per pound U3O8) from offtake agreement signed with Curzon Resources.  This provides an average price of US$44/lb U3O8 for 30% of annual production over 7 years.  (ASX Release: "Aura concludes offtake agreement", 29th January 2019.

Market assessment

·   The demand, supply and stock situation for the particular commodity, consumption trends and factors likely to affect supply and demand into the future.

·   A customer and competitor analysis along with the identification of likely market windows for the product.

·   Price and volume forecasts and the basis for these forecasts.

·   For industrial minerals the customer specification, testing and acceptance requirements prior to a supply contract.

·   The uranium market is currently in a surplus position largely as a result of strong low cost production growth from Kazakhstan coupled with the significant global demand shock following the Fukushima reactor incident in March 2011.

·   A significant future increase in nuclear generation capacity is expected to be driven by China with production targets for an increase from current operational capacity (22GW) to 58GW by 2020 with a further >30GW under construction at that time. The increase in Chinese capacity is consistent with growing Chinese energy demand and a recently stated emissions target for 20% of energy to be generated from non-fossil fuel sources by 2030 from 9.8% in 2013.

·   The increase in nuclear generation capacity will require a significant increase in uranium mine production. Under current uranium prices there is a lack of identifiable projects with the returns sufficient to justify new mine investment. As such, post the ramp up of Cigar Lake and Husab there is minimal new production growth expected in primary mine supply. Leading industry participants are highlighting around US$65/lb as a potential floor price for development of their higher quality projects in more stable jurisdictions.



·   The inputs to the economic analysis to produce the net present value (NPV) in the study, the source and confidence of these economic inputs including estimated inflation, discount rate, etc.

·   NPV ranges and sensitivity to variations in the significant assumptions and inputs.

·   Aura Energy performed an economic and financial review of the Tiris Uranium Project using a range of uranium price scenarios and spot base metal prices as described above. A discounted cash flow model has been developed with a valuation date of July 2019.

·   NPV8 range from US$44.9M at sales price of US$50/lb U3O8 to US$112.9M at sales price of US$65/lb U3O8


·   The status of agreements with key stakeholders and matters leading to social licence to operate.

·   The Tiris Uranium Project Exploration and Exploitation licences are located on unallocated crown land.

·   No native title claims cover the Tiris Uranium Project

·   The nearest population centre is Zouerat, 680km to the West.


·   To the extent relevant, the impact of the following on the project and/or on the estimation and classification of the Ore Reserves:

·   Any identified material naturally occurring risks.

·   The status of material legal agreements and marketing arrangements.

·   The status of governmental agreements and approvals critical to the viability of the project, such as mineral tenement status, and government and statutory approvals. There must be reasonable grounds to expect that all necessary Government approvals will be received within the timeframes anticipated in the Pre-Feasibility or Feasibility study. Highlight and discuss the materiality of any unresolved matter that is dependent on a third party on which extraction of the reserve is contingent.

·   No material naturally occurring risks have been identified.

·   Pre-qualification mining and power contract negotiations have commenced with competitive bids from three local contractors. There are reasonable prospects to anticipate that commercially competitive contract terms will be achieved.

·   Water drilling within a 30km radius of the central process facility is underway.  Recent water drilling by the Mauritanian government was successful 57km from the Tiris Project, resulting in 2 operating bores with flow of 15m3/hr each.  There are reasonable prospects for Aura to locate water on the same geological structure within the target 30km radius.

·   Project commissioning is targeted for 2020/21

·   There are very reasonable grounds to expect that all necessary Government secondary project approvals will be received within the timeframes required for commencement of construction.


·   The basis for the classification of the Ore Reserves into varying confidence categories.

·   Whether the result appropriately reflects the Competent Person's view of the deposit.

·   The proportion of Probable Ore Reserves that have been derived from Measured Mineral Resources (if any).

·   Ore Reserves reported here are classified as both Proved and Probable as they are derived from Measured and Indicated Mineral Resources in accordance with the JORC Code (2012).

·   The results of the Ore Reserve estimate reflect the Competent Person's view of the deposit.

Audits or reviews

·   The results of any audits or reviews of Ore Reserve estimates.


Discussion of relative accuracy/ confidence

·   Where appropriate a statement of the relative accuracy and confidence level in the Ore Reserve estimate using an approach or procedure deemed appropriate by the Competent Person. For example, the application of statistical or geostatistical procedures to quantify the relative accuracy of the reserve within stated confidence limits, or, if such an approach is not deemed appropriate, a qualitative discussion of the factors which could affect the relative accuracy and confidence of the estimate.

·   The statement should specify whether it relates to global or local estimates, and, if local, state the relevant tonnages, which should be relevant to technical and economic evaluation. Documentation should include assumptions made and the procedures used.

·   Accuracy and confidence discussions should extend to specific discussions of any applied Modifying Factors that may have a material impact on Ore Reserve viability, or for which there are remaining areas of uncertainty at the current study stage.

·   It is recognised that this may not be possible or appropriate in all circumstances. These statements of relative accuracy and confidence of the estimate should be compared with production data, where available.

·   Reporting of the project Ore Reserve considers;

o the Mineral Resources compliant with the JORC Code 2012 Edition,

o the conversion of these resources into an Ore Reserves, and

o the costed mining plan capable of delivering ore from a mine production schedule

·   Dilution of the Mineral Resource model and an allowance for ore loss was included in the Ore Reserve estimate. All the Mineral Resources intersected by the open pit mine designs classified as Measured and Indicated Resource has been converted to Proved and Probable Ore Reserves after consideration of all mining, metallurgical, social, environmental, statutory and financial aspects of the Project.

·   The mine planning and scheduling assumptions are based on current industry practice, which are seen as globally correct at this level of study; which further work in the next level of study to understand any periodic cost fluctuations.

·   The project team has estimated the cost estimates and financial evaluation with specialist consultants and team members, which are considered sufficient to support this level of study. The accuracy of the cost estimate is +/-15%.

·   As part of the FS works, the project team have engaged with potential contractors in country to confirm construction, mining and logistics costs.



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