Annual Report for the Financial Year 30 June 2019

Aura Energy Limited wishes to advise the market that it has released its Annual Report for the financial year ended 30 June 2019 to the Australian Securities Exchange.

The Company has attached to this announcement to the AIM market, an abridged version of the 2019 Annual Report.  This report excludes photos, charts, audit independence statement, auditor's report and additional disclosures required by the Australian Securities Exchange.

A full version of the 2019 Annual report can be viewed at http://www.rns-pdf.londonstockexchange.com/rns/1212O_1-2019-9-30.pdf and is also available on the Company's website at www.auraenergy.com.au

For more information please visit www.auraenergy.com.au or contact the following:

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

CHAIRMAN'S LETTER

Dear Shareholder

During 2019 Aura continued to advance its philosophy that the best path to creating shareholder wealth is the advancement towards, and ultimately the achievement of, production from its exploration and development projects.

With the Tiris Uranium Project, the Häggån Vanadium Project and our exploration tenements for gold, base and battery metals, Aura pursued this strongly and concluded the end of 2018/19 with the business side of the Company in great shape.

Whilst the financial year was one of outstanding success from a business building point of view the response on the equity market for Aura was poor and at year end the lack of recognition of Aura's business activity resulted in a low share price.  The reasons revolve around the poor outcome for Aura's February share placement, unavoidable delays in studies, uranium price and the general market tone around the US/China Trade War.

To re-iterate however, Aura's development projects are in excellent shape and the events and achievements that drove this strong business build were as follows;

·           In late 2018 Aura secured the Exploitation Licence for the Tiris Uranium Project.

·           Following definition of the Häggån Vanadium Project high grade zone, Aura pursued the Häggån Scoping Study aggressively and completed capital and operating cost estimates for the new project before the end of the financial year.

·           With a strong vanadium price and a will to innovate, Aura also detailed the path to vanadium recovery with the Tiris Uranium Project. This vanadium will be a strong revenue contributor.

·           Declaring Aura was putting "the building blocks to cashflow' in place, the Company secured a significant offtake agreement for its Tiris Uranium Project which still allowed exposure to higher uranium prices in the future.

·           An additional building block was the commencement of a detail process via our London-based advisors to obtain low-cost Export Credit Finance support for both Tiris and Häggån

·           After some years of patient frustration, Aura secured two highly prospective gold exploration licences near the massive Kinross Tasiast project.  Nickel and cobalt also identified here.

·           The Company later expanded that position securing additional ground prospective for its Tasiast South Project.

·           Significantly in May 2019, Aura produced the first Mauritanian Yellowcake ever as part of the test work for Tiris.

·           Subsequent to the end of the financial year, Aura announced the completion of its Tiris Uranium Project Definitive Feasibility Study with the Häggån Vanadium Scoping Study close behind.

Aura will continue to pride itself on real advancement of the projects it has already discovered in-house and this is achieved with the excellent technical team it has assembled over the years.  Aura thanks this team and all it staff and directors for their efforts during the year.

In the year ahead Aura is targeting finance for the Tiris Project and, subject to a receptive uranium environment, a move towards development of the project.  Additional optimization projects around Tiris have been commissioned and should result in project improvements.

The Häggån Project Study will be released and, in conjunction, Aura will pursue battery manufacturing initiatives with that project.

Also, to place the Häggån Vanadium Project and gold tenements on a stronger independent funding footing the Company will seek more optimum corporate structures for these assets.

I want to thank the shareholders for their support in the year and we look forward to delivering shareholder returns off the back of the strong business we have created.

Yours sincerely

PD Reeve

Executive Chairman and Managing Director

30 September 2019

REVIEW OF OPERATIONS

URANIUM

Tiris uranium project

By the end of the financial year, the Group had virtually completed the Tiris Definitive Feasibility Study.  The formal release of the DFS took place on 29 July 2019 and confirmed the Tiris uranium project as a low cost and low operating cost development.

The DFS is designed to support a 1.25 million tonne/annum (Mtpa) uranium processing plant, an associated open cut mine, and supporting infrastructure.

The Tiris Uranium Project is based on a substantial greenfield uranium discovery by the Company with 51.8 million pounds U₃O₈ in current resources.   Two exploitation licences covering 390 km² were granted to Tiris Ressources SA, a Mauritanian registered subsidiary of Aura, on 8 February 2019.  The two licences cover the Eastern Tiris resources at Oued El Foule and Ain Sder. An application for a 38 km² exploitation licence remains pending over the smaller Western Tiris resource at Oum Ferkik.

This DFS is focussed primarily on the two granted exploitation permits - 2491C4 Ain Sder and 2492C4 Oued El Foule. These comprise the Eastern Tiris resource zone in Wilaya du Tiris Zemmour.

Geology

Over the years there has been three resource estimation exercises carried out with the 2017 drilling campaign substantially upgrading a portion of the resources to Measured and Indicated status (see ASX Announcement, dated 30 April 2018). 

Potential exists to add to the resource base within the immediate vicinity of the recently known resources.  In the Sadi zone, drilling has demonstrated that mineralisation extends at least 1.5 kilometres south of the current resource boundary.  This extension has not been closed off by drilling or included in any resource boundary. 

The delineation of Measured and Indicated Resources (see Table 1 of PDF link to the full annual report above) has been limited for cost reasons only to portions of the of the Lazare and Hippolyte deposits.  Additional Measured/Indicated Resources will be established within the currently defined Inferred Resources zones, and within further resources yet to be outlined.

The declared Ore Reserves at a 175 ppm U₃O₈ cut-off is set out in Table 2 of the PDF link to the full annual report above.

The Ore Reserves were generated by H&S Consultants with appropriate modifying factors to apply for mining dilution  This Resource model was used in an open pit optimisation process, to produce a rang of pit areas using operating costs and other inputs derived from previous studies.

Mining Plus were retained by the Group to complete the mining design for the Tiris uranium project, including Ore Reserve estimation in accordance with The Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the "JORC Code"), 2012 Edition.

The uranium mineralisation lies largely within 3 to 5 metres of the surface in a relatively soft, free digging material containing patchy calcrete.  Based on trenching and metallurgical test work to date, the mineralisation does not require blasting before mining or crushing prior to beneficiation. 

Mining

The Feasibility Study (see ASX Announcement, dated 29 July 2019) has shown that the three mining areas can be developed in a practical sequence to production 800,000-1,100,000 pounds per year of UO₄ through the processing plant for over ten years.  The first nine years will come from the currently defined Measured or Indicated Resources, which form the declared Ore Reserve. 

The cost to develop and operate the mine for 10 years has been estimated at US$66 million or US$2.24 per tonne of material mined.

Resource optimisations for the Lazare North, Lazare South, Hippolyte, Hippolyte South and Sadi were developed for the Feasibility Study using an optimisation sales price of US$44 per pound for U₃O₈ as set in the Offtake Agreement between the Group and Curzon Uranium Trading Limited (see ASX Announcement, dated 29 January 2019).

A conventional open pit dry mining method utilising a combination of bulldozers, excavators and trucks will be employed through a contract mining arrangement.  Where waste is mined it will be returned to a previously mined area without the need for building waste dumps.

Processing

The uranium is hosted with ultra-fine grained carnotite (K2(UO2)2(VO4)2.3H2O) that is loosely attached to barren gangue particles.  This means uranium bearing carnotite can be readily separated from barren particles, allowing highly efficient upgrade of uranium concentration by simple scrubbing and screening. This greatly reduces the mass of material for leaching, reducing footprint and throughput for the hydrometallurgical plant.

The processing facility consists of three main sections. These are separated by surge tanks and include:

•           Beneficiation circuit

•           Uranium extraction circuit (Alkaline leach - solid liquid separation - Ion exchange)

•           Uranium purification and precipitation circuit.

Tiris mineralisation is well suited to uranium recovery by alkaline leaching, using the sodium carbonate/ sodium bicarbonate system.  The leach is undertaken at a temperature of 90°C with a residence time of 12 hours.

For alkaline systems the main process options available for recovery of uranium are ion exchange (IX), Resin in Pulp (RIP), or Direct Precipitation.  For the Tiris process, ion exchange was selected. For efficient application of Direct Precipitation higher concentrations of uranium in leach solution would be required, to minimise downstream reagent requirements.  Similarly, the elevated clay concentration may cause 'bLinding' of resin in an RIP system, reducing recovery efficiency.

After ion exchange the resin loaded with uranyl carbonate is eluted using sodium bicarbonate.  The eluted uranium stream is then further concentrated by nano-filtration, and sodium bicarbonate recovered for recycle back to the leach circuit.  Uranium is then precipitated with sodium hydroxide as sodium diuranate (SDU). The SDU precipitate is filtered and dissolved in sulphuric acid as uranyl sulphate, ready for final precipitation.

Uranium is precipitated with hydrogen peroxide to form the final uranyl peroxide (UO4) product. UO4 will then be dried or calcined to form the final Yellowcake product.  Yellowcake is a term used to cover all Uranium Oxide Concentrates (UOC), which may include UO4, UO3, UO2 or U3O8.

The final UOC product will be packed in secure 205L IP-1 open head steel drums and strapped within a 6m container for transport by road to the Port of Nouakchott.

Infrastructure

The infrastructure component of the Tiris Project includes all supporting facilities located outside the mining area.  Infrastructure includes the engineering design, procurement and management for the following site infrastructure works:

• Internal roads within the process site, and minor roadworks on the 665km site access road from Zouerat.

•           Bulk earthworks

•           Accommodation camp installation, reticulated services, waste disposal, water treatment and associated infrastructure.

•           Transportable buildings including offices, change rooms, crib rooms and ablutions.

•           Communications systems

•       Steel framed buildings including workshops, warehouse and uranium packaging building.

•           Power reticulation across the project site.

•           Site security.

•           Process plant security.

•           Remote water borefield and pipeline.

The process plant area includes a heavy vehicle workshop, which will carry out maintenance on all the mining fleet.  All the designated road areas within the process plant area, and the process plant equipment area, will require some soil compaction to avoid settlement.  Key process equipment/traffic areas will be prepared by stripping the topsoil, proof rolling the area and installing a crushed compacted granite sub-base.  Earthworks will thus be limited to the minimum required only.  No earthworks are planned for the camp 3km north east of the process plant, due to the low building weights involved.

Capital and operating costs

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

An exhaustive in-country engineering review was conducted during the course of the financial year covering all infrastructure needs and, particularly, the road infrastructure to site. The in-country review found that of the 680 km road from Zouerate to Tiris, only 2km will require substantial roadworks.

Significantly, 85% of the capital cost for the Tiris uranium 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.

The Power generation capital costs have been allocated to Operating expenses, with the delayed costs paid over three years once production commences. Aura obtained conceptual agreement to this financing arrangement, with one of the Power generation suppliers. The capital expenditure total cost is therefore reported as $62.94M USD.

The scope for the facilities also includes two specialised plant areas that were separately engineered for both quantities and prices. The specialised plant areas include:

•           Leach and uranium recovery plant developed by Simulus Engineers, and

•           Fluid bed precipitation, calcining and drum packing plant developed by Adelaide Control Engineering.

The costing for these two specialised packages includes full engineering, procurement of all equipment and packing ready for transportation (site erection and commissioning by others).

The operating cost estimate for the Tiris Project was developed by Aura Energy with assistance of MinCore Engineers, Simulus Engineers and MiningPlus. An estimate review was undertaken by METS Engineering. The estimate is based on the LOM ore schedule, process design criteria, steady state mass and energy balance and metallurgical test work undertaken as part of the Feasibility Study.

The estimate includes all costs associated with production of an average 0.8Mlbs U3O8 per annum, including:

•           Contract mining;

•           Labour;

•           Fuel;

•           Power;

•           Reagents and consumables;

•           Maintenance;

•           General and administration;

•           Product transport;

•           Sustaining capital;

•           World Bank Community contributions; and

•           Royalties.

The operating cost estimate is considered to have an estimate accuracy of +15% -10%.

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.

VANADIUM

Haggan vanadium project

The Group commenced an infill diamond drilling campaign at Häggån in late November 2018 aimed at upgrading 250 million lbs V₂O₅ to Measured and Indicated Resource status. The drilling campaign involved  a 3,000-metre of drilling in 22 holes and was completed by the end of April 2019.

The program is focussed on the northwest high-grade vanadium zone at the Haggan vanadium project.  As well as containing high grade vanadium, the mineralisation comes close to surface in this zone with the top of mineralisation averaging circa 27 metres below surface in the recent drilling.

While the mineralisation is up to 200 metres thick the drilling is aiming to test only the upper 100 metres as this is likely to support mining for the first 15 years.

On 23 May 2019 (see ASX Announcement, dated 23 May 2019), the group informed the market orebody modelling had defined a significant high-grade vanadium zone close to the surface.  The modelling confirmed the Global Resource of 15.1 billion pounds of V₂O₅ which included a new significant high-grade hear surface vanadium zone of 90 million tonnes at 0.42% V₂O₅ at a cut-off grade of 4000 ppm.

On 14 August 2019, the Group announced assays from the 3,000-metre drilling campaign (see ASX Announcement, dated 14 August 2019) with the most significant results:

.

·           103 metres at 0.41 % V₂O₅    hole 19DDHG085

·           101 metres at 0.43 % V₂O₅    hole 19DDHG089 (including 68 metres at 0.5% V₂O₅)

·           93 metres at 0.41 % V₂O₅       hole 19DDHG084  

·           78 metres at 0.43 % V₂O₅     hole 19DDHG083

·           71 metres at 0.43 % V₂O₅     hole 19DDHG080

·           54 metres at 0.45 % V₂O₅     hole 19DDHG090

Depth to the top of the mineralisation in the 28 drillholes in this high- grade zone averaged 27 metres which confirms the low stripping ratio of the future/planned mining operation.

The area covered by the recent drilling in this high-grade zone covers only a small portion of the giant Häggån Resource leaving potential for repeats of the current zone to be discovered within proximity of the current resource.

By the end of the financial year, all major technical work for the Häggån Scoping Study has now been completed as per schedule with the final report being assembled currently.  The Haggan Scoping Study will be released in early October 2019.

GOLD AND BASE METALS

Tasiast South tenements

On 3 April 2019 (see ASX Announcement, dated 3 April 2019) the group was granted, through its Mauritanian controlled entity, TIMCO sarl, two exploration tenements covering of 175km² in an underexplored greenstone belt  The areas lie along strike from the giant 20 million ounce Tasiast gold mine operated by Kinross Gold Corporation and Tijirit gold project held by Algold Inc.  The Group believes that these tenements, with the single large Tasiast gold mine along strike, and strong base and battery metal results, represent some of the best under-explored greenstone belt targets in the world.

The prospects cover portions of the Tasiast and Tijirit greenstone belts which have been previously explored by another entity but it was forced to suspend activities in the mineral industry downturn in 2012, despite having located zones of significant gold mineralisation.  Drilling by the previous holder of the tenements was shallow with some limited deeper reverse circulation (RC) drilling testing below air-core drilling. A small number of RC holes have provided very good results; however. the density of drilling is very low averaging approximately one hole per 20 km².

On 11 June 2019 (see ASX Announcement, dated 11 June 2019), the group informed the market that it had extended its footprint in this greenstone belt by entering into a Farm-in and Joint Venture Agreement with Nomads Mining Company sarl. 

The formal agreement was executed on 26 June 2019.

Under the agreement the Group has a right to earn 70% of the equity in Nomads Mining Company sarl of Mauritania by funding US$1,000,000 of exploration expenditure  The exploration tenement, Nderik, covers approximately 50 km² of Archean greenstones in the Tasiast greenstone belt. The Nomads' Nderik tenement adjoins and is along strike from the Group's Touerig Taet exploration tenement which covers  approximately 30 km in strike length of the Tasiast greenstones.

The Group is not aware of any significant prior exploration on the Nderik tenement area despite the area being previously held by Normandy La Source (who made the initial discovery of the Tasiast gold deposit) during the 1990s.  The area of the Nderik tenement, which is close to the large Tasiast mine, has not been exposed to modern exploration techniques.

Initial field geological work indicates the greenstone sequences within the Nderik tenement and within the Group's Touerig Taet tenement have strong similarities in age (late Archean) and geology with those of the prolifically mineralised greenstone belts in the Yilgarn Province of Western Australia and the Superior Province in Canada.  In the Mauritanian Archean greenstone belts, there is currently only one operating mine (excluding small-scale artisanal mining which is active in the area) operated by Kinross at Tasiast and one other reported gold resource at Tijirit held by Algold Limited.

DIRECTORS REPORT

The directors present their report, together with the financial statements of Aura Energy Limited (ACN 115 927 681) (hereafter referred to as the "Company"), for the financial year ended 30 June 2019.

Principal Activities

The principal activities of the Company during the financial year were exploration and evaluation of uranium, vanadium and gold and base metals in Mauritania and Sweden. There was no significant change in the nature of these activities during the year.

Operating Results

The Group recorded a net loss after tax of $2,896,262 the year ended 30 June 2019 (the net loss after tax for the previous financial year was A$1,987,057).  The increase in the net loss after tax was primarily due to higher employee benefits, financing costs (Convertible Security Funding Agreement) and consulting and government and public relations costs.  The impairment of exploration expenditure previously capitalised on Swedish tenements also negatively impacted on the result.

State of affairs of the Company

No significant changes in the Company's state of affairs occurred during the financial year.

Dividends

No dividends were declared and paid during the year.

Events After Balance Date

On 16 July 2019 (see ASX Announcement ,dated 16 July 2019), the Group issued to:

•           11,111,111 fully paid ordinary shares to Lind Global Macro Fund LP on receipt of its first conversion notice pursuant to the terms and conditions of the Convertible Security Funding Agreement. dated 30 April 2019.  The value of the shares issued to Lind Global Macro Fund LP was $100,000.

•           5,000,000 fully paid ordinary shares on the conversion of performance shares to Messrs NJ Clifford and JM Madden and DR WR Goodall under the terms and conditions of the Long-Term Incentive Plan.  The value of the shares issued to management on conversion of performance shares was $105,000.

•           3,251,773 fully paid ordinary to the shareholders of Nomads Mining Company Limited pursuant to the first payment of the entry fee pursuant to the Farm-in and Joint Venture Agreement, dated 26 June 2019.  The value of the shares issued to the shareholders of Nomads Mining Company sarl $36,127 (the equivalent of US$26,000).

•           1,893,233 fully paid ordinary shares to SD Capital Advisory Limited and GKB Ventures Limited pursuant to the Letter of Engagement, dated 25 January 2019, for advisory services associated with securing ECA financing.  The value of the shares issued to SD Capital Advisory Limited and GKB Ventures Limited was $21,564.

On 21 July 2019 (see ASX Announcement, dated 21 July 2019), the Group issued 15,430,919 loyalty options to shareholders that subscribed to the rights issue (see ASX Announcement 21 June 2019).  The loyalty options expire on 21 July 2020 and are exercisable at 2.2 cents per option over ordinary share.  The loyalty options were issued at 0.5 cents per option over ordinary share and raised $77,154.

On 25 July 2019 (see ASX Announcement, dated 25 July 2019), the Group released a cleansing prospectus to enable the Group to issue a replacement convertible note to Lind Global Macro Fund LP as required by the Convertible Security Funding Agreement (see ASX Announcement, dated 30 April 2019).

On 29 July 2019 (see ASX Announcement, dated 29 July 2019), the Group released to the market the Tiris uranium project definitive feasibility study.

On 12 August 2019 (see ASX Announcement, dated 12 August 2019), the Group issued to 1,931,218 fully paid ordinary shares to SD Capital Advisory Limited and GKB Ventures Limited pursuant to the Letter of Engagement, dated 25 January 2019, for advisory services associated with securing ECA financing.  The value of the shares issued to SD Capital Advisory Limited and GKB Ventures Limited was $21,475.

On 14 August 2019 (see ASX Announcement, dated 14 August 2019), the Group release a revised Mineral Resource estimate for its Haggan vanadium project.

On 6 September 2019 (see ASX Announcement, dated 6 September 2019), the Group issued to:

•           14,285,715 fully paid ordinary shares to Lind Global Macro Fund LP on receipt of its second conversion notice pursuant to the terms and conditions of the Convertible Security Funding Agreement. dated 30 April 2019.  The value of the shares issued to Lind Global Macro Fund LP was $100,000.

•           2,041,281 fully paid ordinary shares to SD Capital Advisory Limited and GKB Ventures Limited pursuant to the Letter of Engagement, dated 25 January 2019, for advisory services associated with securing ECA financing.  The value of the shares issued to SD Capital Advisory Limited and GKB Ventures Limited was $22,209.

On 19 September 2019, the Company and Lind Global Macro Fund LP executed an R&D Funding Agreement whereby the Company received $250,000 to fund its research and development activities and repay the R&D Funding by way of assigning its Tax Rebate.

On 25 September 2019 (see ASX Announcement, dated 25 September 2019), the Group issued to:

•           16,666,667 fully paid ordinary shares to Lind Global Macro Fund LP on receipt of its third conversion notice pursuant to the terms and conditions of the Convertible Security Funding Agreement. dated 30 April 2019.  The value of the shares issued to Lind Global Macro Fund LP was $100,000.

•           18,811,250 fully paid ordinary shares to Met Forages sarl under the terms and conditions of a Drilling Settlement Agreement, dated 25 July 2019.  The value of the shares issued to Met Forages sarl was $150,490.

•           2,021,250 fully paid ordinary shares to WH Ireland Limited for advisory services. The value of the shares issued to WH Ireland Limited was $16,170.

On 30 September 2019, the Company issued a supplementary prospectus to amend the terms and conditions of the options over ordinary shares set out in its prospectus, dated 19 June 2019, in relation to proposed listed options granted to subscribers to the Share Placement and Share Purchase Plan.  The Company simultaneously issued 11,604,181 unlisted options and 19,544,508 loyalty options over ordinary shares pursuant to the Share Placement and Share Purchase Plan.

Information on directors

Meetings of directors

During the financial year, the board of directors held 12 meetings (including committee meetings of directors) with the remainder of meetings conducted by way of written resolution.  Attendances by each director during the year were as follows:

During the financial year, the board of directors held 11 meetings (including committee meetings of directors) with the remainder of meetings conducted by way of written resolution.  Attendances by each director during the year were as follows:

Non-Audit Services

Bentleys, the external auditor for the Group, provided the parent entity, Aura Energy Limited, with taxation services during the financial year totalling $3,200 (2018: $894).  Details of remuneration paid to the auditor can be found within the financial statements at Note 3 Auditor's remuneration.

The directors are satisfied that the provision of non-audit services during the year by Bentleys (or by another person or firm on Bentley's behalf) is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001 (Cth).

Indemnifying officers or auditor

During or since the end of the financial year the Group has given an indemnity or entered into an agreement to indemnify, or paid or agreed to pay insurance premiums as follows:

•               The Group has entered into agreements to indemnify all directors and provide access to documents, against any liability arising from a claim brought by a third party against the Company. The agreement provides for the Company to pay all damages and costs which may be awarded against the directors.

•               The Group has paid premiums to insure each of the directors against liabilities for costs and expenses incurred by them in defending any legal proceedings arising out of their conduct while acting in the capacity of director of the company, other than conduct involving a wilful breach of duty in relation to the Company. The amount of the premium was $41,140 (2018: $31,959).

No indemnity has been paid to auditors of the Group

Environmental regulations

The Company is commencing exploration and evaluation activities in Mauritania and Sweden. Both countries have environmental regulation for the conduct of exploration activities. The Company has complied with these environmental regulations in the conduct of all field activities.

The directors have considered the enacted National Greenhouse and Energy Reporting Act 2007 (the NGER Act) which introduced a single national reporting framework for the reporting and dissemination of information about the greenhouse gas emissions, greenhouse gas projects, and energy use and production of corporations. At the current stage of development, the directors have determined that the NGER Act has no effect on the Company for the current, nor subsequent, financial year. The directors will reassess this position as and when the need arises

Options

On 21 July 2019 (see ASX Announcement, dated 21 July 2019), the Group issued 15,430,919 loyalty options to shareholders that subscribed to the rights issue (see ASX Announcement 21 June 2019).  The loyalty options expire on 21 July 2020 and are exercisable at 2.2 cents per option over ordinary share.  The loyalty options were issued at 0.5 cents per option over ordinary share and raised $77,154. financial year and there were no options outstanding at the date of this report.

At the date of this report, the unissued ordinary shares of the Company under options (listed and unlisted) are as follows:

REMUNERATION REPORT

Remuneration policy

The remuneration policy of the Group has been designed to align director and management objectives with shareholder and business objectives by providing a fixed remuneration component, and offering specific long-term incentives based on key performance areas affecting the Group's financial results.  The board of directors believes the remuneration policy to be appropriate and effective in its ability to attract and retain the best management and directors to run and manage the Group, as well as create goal congruence between directors, executives and shareholders.

The policy of the board of directors for determining the nature and amount of remuneration for board members and senior executives of the Group is described in the following paragraphs.

The remuneration policy of the Group sets the terms and conditions for executive directors and other senior executives. Due to the rapidly changing circumstances of the Group in recent years, the policy is reviewed annually by the board of directors with the purpose of maintaining alignment of the board and management with the Group's strategic objectives.  Management is also entitled to participate in employee share and option arrangements. All executives receive a base salary which takes into account such factors as length of service and experience, superannuation and share based incentive such as options.  The board of directors review executive packages annually by reference to the performance of the Group, individual executives and relevant comparable remuneration data from similar listed companies and appropriate industry sectors. Independent expert advice is sought as required

The total amount of non-executive directors' remuneration is proposed by the board of directors from time to time at the Annual General Meeting and is subject to formal approval by shareholders.  Within this limit, the board of directors presently remunerates non-executive directors at around the average of those obtained from relevant comparable data from similar listed companies and appropriate industry sectors.  A measure of longer-term incentive is provided by the allocation of options to non-executive directors.  The board of directors determines remuneration to individual non-executive directors, working within the limit set by shareholders, and taking into account any special duties or accountability. Payments to non-executive directors are not linked to Company performance but in order to align their interest with those of shareholders, non-executive directors are encouraged to hold shares in Aura Energy Limited.

Executives and non-executive directors have received a superannuation guarantee contribution as required by law, which increased to 9.5% on 1 July 2014, but do not receive any other retirement benefits.

All remuneration paid to non-executive directors and executives is valued at the cost to the Company and is expensed.  Options over ordinary shares granted to directors and employees are valued using the Black-Scholes methodology.  Details of directors' and executives' interests in options as at 30 June 2018 are provided in the Remuneration Report of the financial statements.

The Chairman became Executive Chairman and Managing Director of the Company with effect on 1 January 2015 and accordingly, is a fulltime employee.  The Executive Chairman and Managing Director had agreed to settle 20% of his salary by way of fully paid ordinary shares in the Company.   On 2 November 2017, the above arrangement was varied by the Company and the Executive Chairman and Managing Director to convert the share-based remuneration to a cash-based remuneration.

Under clause 14.7 of the Constitution of the Company, shareholders approved at the annual general meeting on 30 November 2017 the total aggregate amount fixed sum per annum to be paid to non- executive directors increase from $200,000 to $300,000. 

At the annual general meeting on 14 November 2018, 78.7% of votes cast for the adoption of the remuneration report voted in favour of the resolution.  The number of votes cast in favour of the resolution totaled 142,294,652.

Remuneration details for the year ended 30 June 2019

There were no cash bonuses paid during the year and there are no set performance criteria for achieving cash bonuses.

The following table of benefits and payment details, in respect to the financial year, the components of remuneration for each member of the key management personnel of the Group: