Aura Energy Ltd (ASX:AEE, AIM:AURA) says the Tiris Uranium Project in Mauritania is poised to become a leading global near-term uranium operation following the delivery of a positive Front End Engineering Design (FEED) study.
The study reaffirms the project's exceptional economic prospects and its status as a low-cost, long-life mine with vast growth potential.
Robust viability
Key findings from the FEED study highlight the project's robust economic viability, including a post-tax net present value (NPV8%) of US$366 million and an internal rate of return (IRR) of 34%, with a rapid payback period of just 2.5 years, based on a uranium price of US$80 per pound (U3O8).
The study estimates an average production rate of 1.9 million pounds per annum (Mlbspa) of U3O8 over a mine life of 17 years, with a low all-in sustaining cost (AISC) of US$34.5 per pound of U3O8, which demonstrates strong profit margins and financial resilience.
The projected capital expenditure for the project is US$230 million, which includes a 12% contingency to accommodate industry-wide escalation and enhancements in filtering and water treatment capacity.
Future expansions
Aura Energy is optimistic about the project's future, with plans for an 18-month construction timeline following a final investment decision expected later in 2024.
The processing facility's design allows for future expansions beyond the initial 2Mlbspa production rate.
Additionally, an ongoing extensional drill program aims to further increase mineral resources, potentially extending the mine life and increasing production capacity.
Aura managing director and CEO Andrew Grove said: "The FEED study clearly demonstrates that Tiris will be a low-cost, high-value, near-term uranium producer with the ability to scale in a very strong uranium market.
Simple, low-risk mining
“The market is in structural deficit and likely to continue that way for an extended period. The strong economics at Tiris are supported by the simple, low-risk mining and beneficiation that delivers the high-grade, 1,750 parts per million (ppm) to 2,000 ppm U3O8, ore to the leach plant and there are no requirements for crushing or grinding the ore.
“These high grades are only matched by the deep underground mines in Canada and exceeding any current or proposed open pit uranium mines worldwide.
“The board believes the current exploration drilling is likely to deliver near-term resource growth around Tiris East. This will enhance the strong economics delivered in the FEED study and also provide optionality to further expand the production rate beyond the current design of 2Mlbs pa U3O8 and extend the mine life.
“Mauritania is open for business, and we look forward to working with the government and all our stakeholders to develop the Tiris Uranium Project.”