Aura Energy Ltd (ASX:AEE, AIM:AURA) has boosted its production target for the Tiris Uranium Project in Mauritania, significantly enhancing project economics and extending the mine life from 17 years to 25 years.
The company believes the Tiris Uranium Project is poised to deliver significant economic benefits to both Aura Energy and the Mauritanian economy.
Expanded mineral resource
The revision follows an expanded mineral resource estimate of 91.3 million pounds of uranium oxide (U3O8).
The updated production forecast increases total uranium production by 44%, with life-of-mine production now projected to reach 43.5 million pounds of U3O8.
This improvement builds on the company’s Front End Engineering Design (FEED) study from February 2024, which has been refined to reflect the expanded resource base.
Strong financials
Financially, the project’s post-tax net present value (NPV8%) has increased by 29% to US$499 million (A$734 million), while the internal rate of return (IRR) has risen to 39%.
The payback period has been reduced to 2.25 years. Additionally, life-of-mine post-tax cash flows are projected to reach US$1.5 billion, a 42% increase from the initial study.
Aura has maintained the capital expenditure (CAPEX) estimate at US$230 million but highlighted that its modular plant design could support future capacity expansions.
The company is exploring expansion options to increase annual production from the current capacity of 2.0 million pounds to as much as 3.5 million pounds of U3O8 with further investment.
Aura Energy continues to focus on the next steps, including securing project funding, offtake agreements, and completing its final investment decision (FID), expected in Q1 2025.
Very significant value
Aura managing director and CEO Andrew Grove said: "The updated economics from the production target update clearly show the very significant value inherent at Tiris as Aura Energy rapidly progress towards the funding and development of the project.
“The US$4.5 million drilling program undertaken earlier this year not only delivered a 55% increase in mineral resources but has also demonstrated over US$100 million of additional project NPV, now standing at US$499 million.
“It is our strong belief that there is still very significant potential to continue to add to the mineral resource and reserve inventory around Tiris East and across the whole northern Mauritanian region, within the 13,000 square kilometres of tenements that Aura has under application.
“With the current large scale of the mineral resource estimate inventory and future resource growth potential, the prospect for significant increase in the uranium production rate from Tiris once in production is very real and we are working on assessing, analysing and shortly presenting the results from the work currently being undertaken.
“The updated production target study has not only increased the mine life and significantly improved the project economics but has simplified and de-risked the early mining sequence and brought forward some uranium production by 21% in the first year, and by 9% over the first five years compared to the FEED study.
“These improved metrics will further support the funding process which is currently underway with indicative offers due this quarter.
“The company is rapidly working towards achieving the FID by the end of the current quarter with many activities underway including water drilling, engagement with EPCM contractors and operational readiness preparations. And we look forward to providing further updates on progress.”