30 October 2023

Quarterly Report for the Period Ending 30 September 2023

Aura Energy Limited (ASX: AEE, AIM: AURA) ("Aura" or the "Company") is pleased to provide an overview of activities for the period ended 30 September 2023 ("Quarter" or "Reporting Period") to accompany the Appendix 5B. Aura remains focused on fast-tracking the development of its Tiris Uranium Project in Mauritania ("Tiris" or the "Tiris Project") and the advancement of the Häggån Polymetallic Project in Sweden ("Häggån" or the "Häggån Project").

To view Appendix 5B please click here: 
http://www.rns-pdf.londonstockexchange.com/rns/6887R_1-2023-10-30.pdf

Company Activities

During the Quarter, the Tiris Project continued to advance, with good progress made on the FEED study due in Q4 2023.  The Company continues to engage with the National Authority for Radiation Protection, Safety and Nuclear Security (ARSN) in order to secure an export permit, and Orano NPS has been appointed to finalise the logistics solution to deliver yellowcake into the global markets. Negotiations continued with utilities over the award of offtake agreements ("Offtake"), supported by an improvement in the uranium spot price, which has risen by nearly 30% from US$56.10/lb to US$71.58/lb U₃O₈. Discussions on securing finance continued during the Quarter to support the advancement of the Tiris Project's development. 

Post the end of the Quarter, Aura announced its intention to commence an exploration program at its Tiris Project, targeting additional resources to progress towards a potential 100 Mlbs U₃O₈ Inferred Resource. Pre-construction works, including the geotechnical drilling of the proposed plant site and trial mining will also be undertaken as part of this program, which will provide valuable data in the production planning for the Tiris Project.

Figure 1 - Nouakchott Port

During the Quarter, Aura's Executives had meetings in Sweden to discuss the government's legislative process, as the country transitions towards a 100% fossil-free energy strategy including the removal of the uranium mining ban.  The Company provided a briefing on the Häggån Scoping Study, with subsequent discussion about how Aura intends to develop the Häggån Project.  The Company made progress on key activities required for the application for the exploitation permit, with baseline environmental monitoring and community consultation due to commence in Q4 2023.  This will see the application for the exploitation permit being submitted during Q3 2024.   

Managing Director and CEO, David Woodall, was interviewed by two of the local newspapers, presenting the strategy that would be adopted by Häggån Project which would deliver no negative impact on the local lakes and water supply, establish operations with a small environmental footprint, progressive rehabilitation, direct employment and business opportunities and the potential of downstream business within the region.  This will be a key focus throughout the December 2023 quarter with ongoing consultation and interactions with stakeholders about the Häggån Project as part of the exploitation permitting process.

Aura's Executives also visited Mauritania to update the government on the progress of the Tiris Project, the progress of the uranium export permit, and other activities to support the project development. 

In September 2023, the Company boosted its team in Mauritania with the recruitment of Abdoullah Samoury as non-board Business and Exploration Director, based in Nouakchott.

Abdoullah has vast experience in geology, project development, mining and production geology and exploration in several African countries (Togo, Burkina Faso and Mauritania). Most recently, he was the Exploration Manager at the Tasiast-Kinross gold mine and prior to that worked for First Quantum Minerals, World Bank and Société Nationale Industrielle et Minière.

Cash on hand as at 30 September 2023 was A$8.55 million.

Tiris Project Update

Over the last Quarter, the Company maintained steady progress towards "development-ready" status. This included the ongoing FEED study focused on identifying and securing long-lead items to ensure timely delivery. Additional negotiations regarding Offtake have been advanced with multiple counterparties in different geographic markets against the favourable background of a rising uranium spot price. This rise has been consistent with previous Company forecasts, and it is pleasing to see ongoing strength in the price rise since the end of the Quarter.

Following the Quarter end, Aura has identified significant exploration targets at both the Tiris East and Tiris West areas. The potential quantity of the exploration targets are conceptual in nature, and there has not yet been sufficient exploration of these targets to estimate a Mineral Resource. It is uncertain whether these exploration efforts will result in an estimation of a Mineral Resource, but Aura is targeting the expansion of the Inferred Mineral Resource at the Tiris Project to approximately 100 Mlbs U₃O₈, a threshold of globally important significance.  

Already, the Tiris Project has defined a low-cost, long-life mine due to the simple mining method and the easy beneficiation process that allows the upgrade of the ore to a ~2,000ppm leach feed grade. The ability to significantly grow the resource through the expansion of existing ore bodies shows excellent potential for scale.

Negotiations with the government of Mauritania concerning the renewal of existing tenements and the granting of the Exploitation Licence are ongoing but have advanced during the Quarter.

The Company has continued to collaborate with regional communities and local governments to maintain the relationships that have been established. The communities have recognised the positive contribution in terms of jobs and infrastructure that the Tiris Project will bring to the region as it moves to the construction phase.

Häggån Project Update

During the Quarter, the Company announced the Scoping Study for the Häggån Project in Sweden. The results indicated a large poly-metallic deposit containing economically significant levels of V (vanadium), SOP (sulphate of potash), Ni (nickel), Zn (zinc), and Mo (molybdenum).

Aura has made considerable progress on the Häggån Project with the completion of the Scoping Study outlining the extraordinary opportunity of the Häggån Project. The study covered 65 Mt of the resource, which represents less than 3% of the known 2.0B tonne Mineral Resource Estimate of the broader Häggån Project. Within this boundary, the ore body displayed a richly endowed polymetallic structure containing significant quantities of vanadium, potash, nickel, zinc, molybdenum, and uranium. A projected post-tax Base Case NPV of US$380-US$1,231 million has been estimated, dependent on final plant construction and the forward price assumptions.

Since the current legislation in Sweden prevents the extraction of uranium, the base case scenario of the Scoping Study assumes that uranium is not extracted from the ore and instead is returned to the ground ("Base Case Scenario").

The Base Case Scenario proposes mining the high-grade zone at ~5.9Mtpa, producing approximately:

·    10,400 tpa V₂O₅ high-quality vanadium flake;

·    217,000 tpa sulphate of potash (SOP) by-product for sale as fertiliser; and

·    3,000 tpa mixed sulphide product.

Aura intends to pursue a 25-year exploitation agreement and recognises the potential value that could be added by recovering uranium from the Häggån ore, subject to changes in Swedish legislation and demonstration that the proposed operation will not have a negative impact on the water quality or the environment.

Aura continues to work with the Swedish Government, local community and relevant authorities and notes recent Swedish Government legislation introduced to the parliament that proposes the removal of restrictions on new nuclear power stations. The adoption of the new energy target, changing from "100% renewable" to "100% fossil-free" electricity by the Swedish parliament, is part of the shift in sentiment towards the use of nuclear power due to its stability, reliability and lack of greenhouse emissions.

Uranium Market - Growing Global Support

The Quarter has seen a continuation of governments internationally acknowledging nuclear energy as a key part of the carbon-free energy transition. Multiple governments continue to announce plans to construct or upgrade existing nuclear power plants to provide stable, zero-carbon baseload generation capacity. The growing realisation that renewable energy solutions are unable to provide the scalability or instantaneous demand continues to drive this sentiment.

During the Quarter, the following highlights have been noted:

·    China is looking to develop its nuclear power sector at a rate of six to eight new plants per year for the foreseeable future[2];

·    Japanese nuclear power plants are planning to restart production next year as the country seeks to reduce reliance on fuel imports[3];

·    The United States, France, Japan, Canada, and the United Kingdom formed the Nuclear Fuel Alliance (NFA) to develop a shared supply chain for nuclear fuel[4];

·    U.S. House of Representatives subcommittee for Energy, Climate and Grid Security pledged bipartisan support for the development of nuclear energy[5]; and

·    The World Nuclear Association published updated supply and demand forecasts, which show a more rapid growth trajectory of uranium demand.

This growing sentiment towards nuclear energy is starting to impact the uranium spot price. Subsequent to the end of the quarter, the spot price has exceeded US$73/lbs, a 13 year high.

David Woodall and Nigel Jones also attended the recent World Nuclear Fuels Market (WNFM) conference in Ljubljana, Slovenia, where meetings were held with potential offtake partners for the Tiris Project.