REG - Aura Energy Limited - Häggån Scoping Study

Aura EnergyAnnouncement

05/09/2023 08:15

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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  (#_ftn1) 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 Rate  V(2)O(5)  SOP    Capital       NPV                        NPV                        IRR        Payback

 Mtpa             ktpa      ktpa   US$ million   Base Case                  (incl U3O8)(1)             %          years

                         US$ million                US$ million
 3.5              10.4      217    $592M         $380 - $1,231 2  (#_ftn2)  $756 - $1,606 3  (#_ftn3)  26-47%(2)  1.5 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
(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  (#_ftn4) ))

 

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  (#_ftn5) . 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  (#_ftn6) , 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)O(5) Cut-Off  Class      Mt Ore  V(2)O(5)  Mo   Ni   Zn   K(2)O  Million lbs  Mt
 %                                    %         ppm  ppm  ppm  %      V(2)O(5)     K(2)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  (#_ftn7)

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  (#_ftn8) , 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  (#_ftn9) .

·    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 
(#_ftn10)

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  (#_ftn11) .

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 (mailto:info@auraenergy.com.au)   pryan@citadelmagnus.com

                                                          +61 409 296 511

 SP Angel Corporate Finance LLP                           WH Ireland Limited

 (Nominated Advisor and Joint Broker)                     (Joint Broker)

 David Hignell                                            James Bavister

 Kasia Brzozowska                                         Andrew de Andrade

 +44 (0) 203 470 0470                                     +44 (0) 207 220 1666

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  (#_ftnref1) This recognises the uranium ban is still in place, with the
present government's stated aim to remove the ban.

 2  (#_ftnref2)  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  (#_ftnref3) 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  (#_ftnref4) The Times - Sweden to return to uranium mining 2023-08-18

 5  (#_ftnref5) ASX Release: Häggån Battery Metal Project Resource Upgrade
Estimate Successfully Completed, 10 October 2019

 6  (#_ftnref6) ASX Release: Häggån Battery Metal Project Resource Upgrade
Estimate Successfully Completed, 10 October 2019

 7  (#_ftnref7) ASX Release: Häggån Battery Metal Project Resource Upgrade
Estimate Successfully Completed, 10 October 2019

 8  (#_ftnref8) 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  (#_ftnref9) ASX Release: Häggån Battery Metal Project Resource Upgrade
Estimate Successfully Completed, 10 October 2019

 10  (#_ftnref10)
https://www.euractiv.com/section/energy-environment/news/sweden-adopts-100-fossil-free-energy-target-easing-way-for-nuclear/

 11  (#_ftnref11) The Times - Sweden to return to uranium mining 2023-08-18

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