TIDMAURA
RNS Number : 4123L
Aura Energy Limited
05 September 2023
Häggån Scoping Study Confirms the Scale and Optionality
of Aura's Critical Minerals Project in Sweden
=========================================================================================================================================================================================
* Scoping Study reveals extraordinary Häggån
scale and optionality
o Vanadium, potash, nickel, molybdenum, zinc and uranium [1] among
a diversified suite of future-facing commodities
o Swedish location positive in light of leadership in the European
resource industry
o 65MT Scoping Study covers less than 3% of Haggan's known 2.0Bn tonne
Mineral Resource Estimate.
* Scoping Study delivers strong project sample for
re-engagement with potential strategic partners
* Scoping Study underpins application for a 25-year
Exploitation Permit
* Sweden is Europe's leading mining and mineral nation,
and its minerals strategy and anticipated legislative
changes will strengthen that position
Processing V(2) SOP Capital NPV NPV IRR Payback
Rate O(5) ktpa US$ million Base Case (incl U3O8)(1) % years
Mtpa ktpa US$ million US$ million
$380 - $1,231 $756 - 1.5
3.5 10.4 217 $592M [2] $1,606 [3] 26-47%(2) to 2.0
---------------- ---------------- ----------------------- ------------------------- -------------------------- --------------------- -------------------
--
=========================================================================================================================================================================================
Aura Energy Limited (ASX: AEE, AIM: AURA) ("Aura" or "the
Company") is pleased to release its Scoping Study for the Häggån
Project ("Häggån" or "the Project") in Sweden.
To view the full Scoping Study for the Häggån Project, please
click here
http://www.rns-pdf.londonstockexchange.com/rns/4123L_1-2023-9-5.pdf
Aura Chairman Philip Mitchell said , "The Scoping Study
underpins our 25-year Exploitation Permit Application and addressed
<3% of the Haggan resource whilst confirming Haggan's scale and
optionality. Haggan's products are crucial to Battery Technology,
Agriculture and potentially with legislative change low carbon,
secure and affordable electricity.
The Swedish Government acknowledges that for Sweden's clean
power system to function, a large part must be readily
dispatchable, and nuclear power is the only non-fossil option. I
noted Sweden's Minister of the Environment's comments to the Times
of London on 18 August 2023 "There was a parliamentary majority
behind lifting Sweden's ban on uranium extraction and opening up by
far the largest deposits in the European Union.
She noted that "Nearly 40 years after the completion of the
country's last new nuclear power plant, Minister Pourmokhtari has
announced plans to build at least ten large reactors to meet an
anticipated surge in demand for zero-carbon power".
She said that while wind and solar power would be important, the
country also needed massive volumes of nuclear-generated
electricity because output can be reliably dialled up or down to
keep the power supply steady through the peaks and troughs of
renewable generation."
"The government is aiming at doubling electricity production in
20 years," Minister Pourmokhtari said. "For our clean power system
to function, a large part of this has to be dispatchable where
nuclear power is the only non-fossil option. Nuclear power also has
a reduced environmental footprint and requires limited
resources in comparison with most energy sources." ([4])
The 65MT Haggan Scoping Study covers <3% of Haggan's known
2.0Bn tonne Mineral Resource Estimate. The Study portends a Tier 1
polymetallic mineral resource providing key minerals for a
transitioning world. The remaining 97% of the resource will be
further studied and offers exciting future prospects including
further study of the potential of rare earth minerals known to
occur in the Alum shales. The Scoping Study will support the
engagement with potential strategic partners in the project."
Aura Managing Director Dave Woodall said "The Häggån ore body is
massive with a richly endowed polymetallic orebody that contains
significant quantities of critical metals that are essential to the
rapidly growing energy transition and agricultural supply chains
including significant quantities of vanadium, potash, uranium, and
base metals. Our project can be integral to the Swedish and
European supply of these critical metals that can significantly
de-risk the energy transition while providing benefits to all
stakeholders.
Our next steps in the Prefeasibility Study will be to further
infill drilling that aims to increase mine life and further enhance
the project economics. "
Figure 1 - Haggan Scoping Study Resource with less than 3% of
the total Mineral Resource Estimate currently included in the
mining plan
The Häggån Project is based on a substantial discovery in the
Jämtland province in central Sweden, with a polymetallic global
Mineral Resource Estimate of 2 billion tonnes at a 0.2% V(2) O(5)
cutoff [5] . While vanadium is a significant driver of Häggån's
value, it contains economically significant volumes of other
strategic metals and minerals including potassium, nickel, zinc,
molybdenum, and uranium. A significant benefit of the polymetallic
deposit is the potential for economically extractable sulphate of
potash (SOP) as a byproduct in the processing.
The Häggån Project is a significant polymetallic deposit that
provides a key growth opportunity for Aura, with the scoping study
using the Indicated Mineral Resource shown in Figure 2, a small
percentage of the global resource. The Scoping Study is the
culmination of a significant package of work, including the 2019
resource upgrade [6] , and provides the Company with a solid
foundation for future growth and to undertake additional work to
assess the path forward in Sweden.
V (2) Class Mt V (2) Mo Ni Zn K Million Mt
O(5) Ore O(5) (2) lbs
Cut-Off O
---------- ------ ------ ---- ---- ---- ----- -------- ------
% % ppm ppm ppm % V (2) K(2)
O(5) O
--------- ---------- ------ ------ ---- ---- ---- ----- -------- ------
0.20 Indicated 42 0.35 217 375 512 4.13 320 1.74
--------- ---------- ------ ------ ---- ---- ---- ----- -------- ------
Inferred 1,963 0.30 212 337 463 3.80 13,010 127.6
--------- ---------- ------ ------ ---- ---- ---- ----- -------- ------
Figure 2 -2019 Häggån Mineral Resource Statement [7]
There is a low level of geological confidence 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.
Included in the global resource published on 22 August 2012,
"Outstanding Häggån uranium resource expands to 800 million pounds"
is an Inferred Mineral Resource of 2.35 billion tonnes with U(3)
O(8) grade of 155 ppm at a cut-off of 100 ppm U(3) O(8) , for
contained U(3) O(8) of 800 Mlbs. This information was prepared and
first disclosed under the JORC Code 2004. It has not been updated
since to comply with the JORC Code 2012 on the basis that the
information has not materially changed since it was last
reported.
The Project's major value drivers are vanadium and the key
agricultural by-product sulphate of potash (SOP), with a mixed
sulphide precipitate of nickel, zinc, and molybdenum proposed to be
produced. Uranium is present in the polymetallic resource, like
many deposits in Sweden, and while it can add to the Project's
economic value there exists at present a ban on the mining of
uranium in Sweden. The Scoping Study outlines an option for a
treatment and stabilisation plan that would treat the uranium into
an inert safe waste product for long-term disposal or with approval
from the government and community recover it in the processing
circuit for sale into the domestic and or European markets.
Figure 3 - Distribution of Revenue(2) by product inclusive of
U(3) O(8)
Cautionary Statement
The Scoping Study has been undertaken to ascertain whether a
business case can be made to proceed to more definitive studies on
the viability of the Häggån Project, which is based on the
extraction of vanadium and by-products from the Alum Shale within
the Häggån permits. It is a preliminary technical and economic
study of the potential viability of the Häggån Project and is based
on low-level technical and economic assessments, generally to a
level of +/- 35% accuracy, that is not sufficient to support the
estimation of Ore Reserves or to support any financial investment
or development decision.
Further exploration and evaluation work, test work and studies
are required before the Company will be in a position to estimate
any Ore Reserves, to provide any assurance of an economic
development case, or to provide certainty that the conclusions of
the Scoping Study will be realised.
Prefeasibility and Feasibility studies will be required to
confirm the project viability including drilling to expand the
Indicated Mineral Resource and to establish a Measured Resource,
metallurgical test work and process optimisation, detailed mine
design, mine planning, evaluation of mining methods, engineering,
updated and more accurate capital and operating cost estimates,
environmental studies and permitting, community engagement and the
establishment of ore reserves.
The Company believes it has reasonable grounds to report the
results of the Scoping Study including the forward-looking
statements and the forecast financial information that are based on
the material assumptions outlined in the Scoping Study.
The mine plan on which this Scoping Study is based contains 77%
Indicated Mineral Resources and 23% Inferred Mineral Resources over
the life of the Project. The first 5 years of mining are based on
88% Indicated Mineral Resources, the first 11 years of production
based on 95% Indicated Mineral Resources and thereafter the mine
plan includes increasing amounts of Inferred Mineral Resources. The
Inferred Mineral Resources are not a determining factor in
estimating the viability of the Häggån Project.
The Project is viable on the basis of the Indicated Mineral
Resources and the payback period of the Project of between 1.5 and
2.0 years is also based purely on the Indicated Mineral
Resources.
There is a low level of geological confidence 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.
Metallurgical recoveries used in this Scoping Study are based on
test work results for the key stages of the process flowsheet.
The Scoping Study is based on the material assumptions outlined
in the Scoping Study. These include assumptions about the
availability of funding. While the Company considers all the
material assumptions to be based on reasonable grounds, there is no
certainty that they will prove to be correct or that the outcomes
anticipated by the Scoping Study will be achieved.
To achieve the outcomes of the Scoping Study, funding in the
order of US$592 million is estimated to be required for the Project
development capital with an expected construction period of 3
years, in addition to pre-development funding of approximately
US$15 million to convert the Mineral Resources to an Ore Reserve
and to complete a Prefeasibility and a Feasibility Study. Investors
should note that there is no certainty that the Company will be
able to raise that amount of funding when needed. It is also
possible that such funding may only be available on terms that may
be dilutive to or otherwise affect the value of the Company's
existing shares. It is also possible that Aura could pursue other
'value realisation' strategies, such as direct financing into the
Häggån Project via a joint venture or partial sale. If it does,
this could materially reduce Aura's proportionate ownership of the
Project.
Given the uncertainties involved, investors should not make
investment decisions based solely on the results of this Scoping
Study
Scoping Study highlights:
-- A projected post-tax net present value ('NPV') ranging from
US $380 - $ 1,231 million [8] , depending on final plant
configuration and forward price assumptions.
-- A post-tax Internal Rate of Return of 26% to 47% and a payback period of 1.5 to 2.0 yrs.
-- Initial capital cost of US$592M would aim to generate an
operating cash flow of between US$140M to US$270M per annum.
-- Häggån currently has defined a global Mineral Resource
Estimate of 2 billion tonnes at an average grade of 0.3% V(2) O(5)
, containing 13.3 billion lbs V(2) O(5) , at a 0.2% V(2) O(5)
cutoff [9] .
-- The Base Case scenario proposes mining the high-grade zone at
5.9Mtpa producing approximately:
o 10,400 tpa V(2) O(5) high-quality vanadium flake.
o 217,000 tpa sulphate of potash (SOP) by-product for sale as
fertiliser.
o 3,000 tpa Mixed sulphide product.
The Scoping Study is based on the material assumptions outlined
in the Scoping Study.
Aura recognises the potential value that could be unlocked from
Häggån's should uranium be recovered in an alternative
configuration to the planned processing path. The Scoping Study
analyses the potential value that could be unlocked should Häggån's
uranium be extracted and sold, subject to changes in Swedish
legislation and demonstration that the proposed operation will not
impact the water quality or the environment. Aura continues to work
with the Swedish Government, local community and relevant
authorities and notes recent Swedish Government support for the
removal of the uranium mining ban. The Swedish parliament also
recently adopted a new energy target, changing from a "100%
renewable" target to a "100% fossil-free" electricity target, which
opened the door for increasing electricity generation from nuclear
power. [10]
This shift in government tone has been a consistent narrative
since the election of the coalition of government in September
2022. The new government came to power with a policy proposal to
lift the uranium mining ban.
Formal implementation of the legislation to change the policy is
progressing through the normal parliamentary process, with
appropriate drafting and review underway [11] .
The release of this Scoping Study provides a critical part of
the information that is required for the application of an
exploitation concession for the development of the Project and
expanding consultation with all stakeholders at the national,
regional, and community levels, critically with traditional
inhabitants, the Sami people.
Next Steps
Following the positive outcome of this Scoping Study, Aura plans
to progress the Häggån Project with the application for an
exploitation concession. This work will include:
-- The commencement of baseline flora, fauna and water studies.
These will be done using independent consultants and will be shared
with the community to ensure transparency and collaboration with
the project,
-- Undertake a Pre-Feasibility Study ('PFS') including further
resource and infill drilling, geotechnical and hydrogeological
investigations, preliminary pit design scheduling options, and more
detailed metallurgical test work, to further assess options, reduce
risk and better define the Project, and
-- Commence discussions with preferred strategic partners with
financial capability to advance this world-class project.
This announcement has been authorised by the Board of Aura
Energy Limited.
Market Abuse Regulation (MAR) Disclosure
The information contained within this announcement is deemed by
the Company to constitute
inside information as stipulated under the Market Abuse
Regulations (EU) No. 596/2014 as it forms
part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ('MAR'). Upon the
publication of this announcement via Regulatory Information
Service ('RIS'), this inside information
is now considered to be in the public domain.
For further information, please contact:
David Woodall Paul Ryan
Managing Director and CEO Citadel-MAGNUS
Aura Energy Limited Investor & Media Relations
info@auraenergy.com.au pryan@citadelmagnus.com
+61 409 296 511
SP Angel Corporate Finance LLP WH Ireland Limited
(Nominated Advisor and Joint (Joint Broker)
Broker) James Bavister
David Hignell Andrew de Andrade
Kasia Brzozowska +44 (0) 207 220 1666
+44 (0) 203 470 0470
----------------------------
About Aura Energy (ASX: AEE, AIM: AURA)
Aura Energy is an Australian-based minerals company that has
major uranium and battery metals projects with large resources in
both Africa and Europe. The Company is primarily focused on
progressing the development to commence uranium production from the
Tiris Project, a major greenfield uranium discovery in
Mauritania.
A recent Enhanced Feasibility Study at Tiris has increased the
project NPV significantly reconfirming the project as one of the
lowest capex, lowest operating cost uranium projects that remain
undeveloped in the world.
A Scoping Study into the Häggån Project in Sweden has outlined
compelling economic value. Aura plans to follow up this study with
further exploration to lift the Resource categorisation alongside
close collaboration with the community surrounding the project to
foster support to proceed.
Aura will continue to transition from a uranium explorer to a
uranium producer, to capitalise on the rapidly growing demand for
nuclear power as the world continues to shift towards a
decarbonised energy sector.
Disclaimer Regarding Forward-Looking Statements
This ASX announcement (including the Scoping Study) contains
various forward-looking statements. Forward-looking statements
include but are not limited to statements concerning Aura Energy
Limited's planned activities and other statements that are not
historical facts. When used in this report, words such as "could",
"plan", "estimate", "expect", "intend", "may", "potential",
"should" and similar expressions are forward-looking statements. In
addition, summaries of Exploration Results and estimates of Mineral
Resources and Ore Reserves could also be forward-looking
statements. Although Aura Energy Limited believes that its
expectations reflected in these forward-looking statements are
reasonable, such statements involve risks and uncertainties and no
assurance can be given that actual results will be consistent with
these forward-looking statements. The entity confirms that it is
not aware of any new information or data that materially affects
the information included in this announcement and that all material
assumptions and technical parameters underpinning this announcement
continue to apply and have not materially changed. Nothing in this
report should be construed as either an offer to sell or a
solicitation to buy or sell Aura Energy Limited securities. For
more information of specific risks associated with forward looking
statements refer to the Key Risks section of the Scoping Study.
Competent Person Statements
Resource Modelling
The Competent Person for the 2012 Häggån Mineral Resource
Estimate and classification, updated in 2019, is Mr Arnold van der
Heyden of H&S Consultants Pty Ltd. The information in the
report to which this statement is attached that relates to the 2019
Resource Estimate is based on information compiled under the
supervision of Mr Arnold van der Heyden, who has sufficient
experience that is relevant to the resource estimation. This
qualifies Mr van der Heyden 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 van der Heyden is
a consultant and director of H&S Consultants Pty Ltd, a
Sydney-based geological consulting firm. Mr van der Heyden is a
Member and Chartered Professional of The Australasian Institute of
Mining and Metallurgy (AusIMM) and consents to the inclusion in the
report of the matters based on his information in the form and
context in which it appears.
The information in this announcement that relates to estimated
Mineral Resources underpinning the production targets and the
forecast financial information derived from the production targets
for Häggån Project were initially reported by the Company in the
announcement entitled "Häggån Battery Metal Project Resource
Upgrade Estimate Successfully Completed" dated 10 October 2019. The
Company confirms that it is not aware of any new information or
data that materially affects the information included in the
original market announcement and that all material assumptions and
technical parameters underpinning the Mineral Resources Estimates
in the market announcement continue to apply and have not
materially changed. The Company confirms that the form and context
in which the Competent Person's findings are presented have not
been materially modified from the original market announcement.
The Competent Person for drill hole data, cut-off grade and
prospects for eventual economic extraction is Mr Neil Clifford. The
information in the Scoping Study to which this statement is
attached that relates to drill hole data, cut-off grade and
prospects for eventual economic extraction 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 Scoping Study of the
matters based on his information in the form and context in which
it appears.
Metallurgical Test Work Outcomes
The Competent Person for the Häggån Metallurgical Test Work is
Dr Will Goodall. Dr Goodall is Chief Development Officer with Aura
Energy Ltd. The information in the report to which this statement
is attached that relates to the test work is based on information
compiled by Dr Will Goodall. Dr Goodall has sufficient experience
that is relevant to the test work 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 Scoping Study of the matters based on his
information in the form and context in which it appears.
Reasonable Basis for Forward-Looking Statements
No Ore Reserve has been declared in the Scoping Study. This ASX
release has been prepared in compliance with the JORC Code (2012)
and the ASX Listing Rules. All material assumptions on which the
Scoping Study production target and projected financial information
are based have been included in this release (including the
attached Scoping Study). Consideration of Modifying Factors in the
format specified by JORC Code (2012) Table 1, Section 4 is attached
to the Scoping Study.
[1] This recognises the uranium ban is still in place, with the
present government's stated aim to remove the ban.
[2] V(2) O(5) price of between US$7.0/lb and $13/lb, SOP price
of US$650/t K(2) O, a Nickel price of US$20,000/t, Mo price of
US$51,000/t and Zn price of US$2,500/t, with 70% payability for
base metal units.
[3] V(2) O(5) price of between US$7.0/lb and $13/lb, SOP price
of US$650/t K(2) O, U(3) O(8) price of US$65/lb, a Nickel price of
US$20,000/t, Mo price of US$51,000/t and Zn price of US$2,500/t,
with 70% payability for base metal units. Subject to anticipated
Swedish legislative change
[4] The Times - Sweden to return to uranium mining
2023-08-18
[5] ASX Release: Häggån Battery Metal Project Resource Upgrade
Estimate Successfully Completed, 10 October 2019
[6] ASX Release: Häggån Battery Metal Project Resource Upgrade
Estimate Successfully Completed, 10 October 2019
[7] ASX Release: Häggån Battery Metal Project Resource Upgrade
Estimate Successfully Completed, 10 October 2019
[8] 2 V(2) O(5) price of between US$7.0/lb and $13/lb, SOP price
of US$650/t K(2) O, U(3) O(8) price of US$65/lb, a Nickel price of
US$20,000/t, Mo price of US$51,000/t and Zn price of US$2,500/t,
with 70% payability for base metal units.
[9] ASX Release: Häggån Battery Metal Project Resource Upgrade
Estimate Successfully Completed, 10 October 2019
[10]
https://www.euractiv.com/section/energy-environment/news/sweden-adopts-100-fossil-free-energy-target-easing-way-for-nuclear/
[11] The Times - Sweden to return to uranium mining
2023-08-18
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