(Alliance News) - Aura Energy Ltd on Wednesday raised the capital estimate for its Tiris Uranium Project in Mauritania to reflect the impact of the Covid-19 pandemic.
Shares in Aura Energy were trading down 4.8% at 5.00 pence each in London on Wednesday.
The Melboure-based minerals explorer said the Tiris project's estimated capital costs remain low, despite increasing to USD74.8 million, up 19% from its initial USD62.9 million guidance in 2019.
Predicted capital costs are up 10% when given in Australian dollars, increasing to AUD106.9 million from AUD96.8 million.
The new estimate - which replaced the results of a study from 2019 - responds to changes in global economic conditions resulting from the pandemic, such as increased freight and project development costs.
The company commissioned MinCore Engineers Pty Ltd to produce the updated capital estimate in late June.
Aura said its new figures are well-founded, with 85% of its capital estimate coming from supplier quotes for the Mauritania-based project.
In addition, the study estimates that over 15 years of production, the Tiris project will produce 12.4 million pounds of uranium oxide.
All-in sustaining costs are guided around USD29.81 per pound of uranium, the company added.
"[This] all-in sustaining cash cost...is extremely competitive when compared to our uranium development peers," Aura said, adding that the project benefited from shallow mining and beneficiation.
According to the feasibility study, the project has a payback period of four years and a 22% internal rate of return.
Meanwhile, the project's total post-tax cash flow is estimated to be USD214 million, with average post-tax cash flows of USD17.1 million, the company said.
"Tiris remains as a highly robust uranium project, which the company aims to capitalise on as the uranium market continues to recover. With the [definitive feasibility study] now updated with 2021 capital figures, Aura is well positioned to continue its discussions with global financiers in relation to both debt and equity funding arrangements. We now look forward to fast tracking Tiris into production, as the world shifts towards a decarbonised energy system," said Chief Executive Peter Reeve.
Aura began stage 2 exploration in its fast-tracked development of the Tiris project on July 28.
By Scarlett Butler; scarlettbutler@alliancenews.com
Copyright 2021 Alliance News Limited. All Rights Reserved.
Aura Egy (AURA)