Aura Egy Regulatory News (AURA)

AURA ENERGY LIMITED

 ("Aura" or the "Company")

 Half-Year Report for Financial Period Ended 31 December 2020

Aura announces its unaudited interim results for the six months ended 31 December 2020.

To view the full PDF version of the report, please click here: http://www.rns-pdf.londonstockexchange.com/rns/9477T_1-2021-3-30.pdf

The information contained within this announcement is deemed by the Company to constitute inside information under the Market Abuse Regulation (EU) No. 596/2014.

During the second half 2020 business activities were largely on hold pending discussions to settle the ongoing legal disputes and a recapitalisation plan for the company.

With the assistance of a major shareholder, the Company commenced settlement negotiations on the outstanding legal disputes and this has been largely successful.

Covid-19 continues to restrict access to our projects (both the Australian government and to a lesser extent the Mauritanian government travel bans).

Aura lists its assets as:

· The construction-ready Tiris Uranium Project

· Excellent gold assets

· Häggån Vanadium Project

Tiris Project, Mauritania (85% owned)

No activity took place on the Tiris Project.

Häggån Battery Metals Project, Sweden (100% owned)

Activities at the Häggån Battery Metals project remained on care-and-maintenance.

Tasiast South Gold Project, Mauritania (100% owned)

A corporate transaction for the gold assets continues, albeit at a slower pace.

Corporate

P Hains has been appointed Company Secretary of the Company and will be the nominated person under Listing Rule 12.6 for communications with the Australian Securities Exchange.

P Hains replaces JM Madden who had advised the Company on 14 August 2020 of his decision to step down as Company Secretary as soon as practicable.

ASX listing rules

The Company is unable to issue new securities without prior security holder approval, unless the issue comes within an exception in Listing Rule 7.2.

The Directors present their report on the Group consisting of Aura Energy Limited (AEE) and its controlled entities at the end of or during the half-year ended 31 December 2020 (the period). Financial comparisons used in this report are of results for the half-year ended 31 December 2019 (the prior corresponding period) for statement of profit or loss and cash flow analysis, and 30 June 2020 for statement of financial position analysis.

Directors

PD Reeve Executive Chairman (until 17 March 2021); Managing Director (from 17 March 2021) 

R Beeson Non-Executive Director (resigned on 17 March 2021)

JL Bennett Non-Executive Director (resigned on 17 March 2021) 

RC Craigie Non-Executive Director (resigned on 17 March 2021)

 PD Heber Non-Executive Director (resigned on 17 March 2021)

 JC Perkins Non-Executive Director (resigned on 17 March 2021)

M Rogers Non-Executive Chairman (appointed on 17 March 2021) 

P Ward Non-Executive Director (appointed on 17 March 2021)

Operating Results

The Group recorded a net loss after tax of $1,699,461 for the half-year ended 31 December 2020 (the net loss after tax for the comparative half-year was $1,231,480). The higher net loss for the half-year was due to higher consulting charges, offset by lower finance charges and share registry costs.

Dividends

No dividends were declared and paid during the year (2019: nil).

State of affairs of the Company

No significant changes in the Company's state of affairs occurred during the financial year.

Events After Balance Date

The following directors resigned, effective as at the Annual General meeting: R Beeson, JL Bennett, RC Craigie, PD Heber and JC Perkins. Furthermore, PD Reeve stood down as chairman, but retained his directorship.

The Group held its Annual General Meeting on 17 March 2021. The following resolutions were passed at the AGM and subsequently enacted:

· M Rogers was appointed as non-executive director and chairman.

· P Ward was appointed as non-executive director.

· PD Reeve was appointed as managing director.

· All issued shares and options were consolidated at a ratio of 13 to 1. For clarity, all share numbers quoted in this note are on the pre-consolidation basis.

· The shareholders approved the issue of 155,000,000 shares to Lind Global Macro Fund LP, to extinguish the liability of $310,000.

· The shareholders approved the issue of 77,708,331 Options to sophisticated and professional investors, each exercisable at $0.008, on or before 2 years from the date of issue

· The following shares approved by the shareholders to be issued to existing non-executive directors to extinguish outstanding remuneration:

(a) Up to 34,675,000 Shares to R Beeson;

(b) Up to 34,675,000 Shares to JC Perkins;

(c) Up to 23,725,000 Shares to JL Bennett;

(d) Up to 15,955,000 Shares RC Craigie;

(e) PD Heber will not be issued equity in relation to his outstanding remuneration as he maintains his independence for AIM purposes; and

(f) Up to 8,460,000 Shares to B Fraser.

at a price of $0.002 per Share to extinguish outstanding obligations.

· The shareholders approved the issue of 50,000,000 Shares to the PD Reeve (executive chairman) at a price of $0.002 per share to partly extinguish outstanding remuneration.

· The shareholders approved the placement to issue 25,000,000 shares to P Ward and 50,000,000 shares to M Rogers, the incoming directors, at a price of $0.002 per share.

· The shareholders approved the placement to issue the following shares to sophisticated and professional investors:

(a) 75,000,003 Shares to P Proksa;

(b) 50,000,002 Shares to J Hancock;

(c) 50,000,002 Shares to A Molyneux;

(d) 50,000,002 Shares to D O'Neill;

(e) 50,000,002 Shares to M Holland; and

(f) 50,000,002 Shares to K Kerridge;

at an issue price of $0.002 per Share for proceeds of $650,000.

· The shareholders approved the issue of 75,000,000 options to P Ward and 200,000,000 options to M Rogers, the incoming directors. All options are exercisable at $0.004 per option, on or before 30 June 2024.

· The shareholders approved the issue of 75,000,000 shares at an issue price of $0.004 each, to ASEAN, Sartingen, Pre-Emptive Trading Pty Ltd (PET) in settlement of litigation.

· The shareholders approved the issue of 75,000,000 options, exercisable at $0.004 each, on or before 30 June 2023, to ASEAN, Sartingen, Pre-Emptive Trading Pty Ltd (PET) in settlement of litigation.

· The shareholders approved the issue of 45,000,000 shares to CFO Solutions Pty Ltd, for the provision of accounting, ASX compliance and company secretary services.

· The shareholders approved the issue of 50,000,000 options to L1 Capital Global Opportunities Master Fund at an exercise price of $0.004 each, as part of the convertible securities agreement.

The capital raising initiatives have realised $800,000 in funding in February and March 2021.

Proceedings on behalf of the Group

The Company has lodged with the Kingdom of Sweden a claim for compensation for the alleged expropriation of its rights to mine and produce uranium concentrate from the tenements held by Vanadis Battery Metals AB, a controlled entity of the Company. 

CONSOLIDATED STATEMENT OF PROFIT OR LOSS & OTHER COMPREHENSIVE INCOME

For the six months ended 31 December

 CONSOLIDATED STATEMENT OF FINANCIAL POSITION

CONSOLIDATED STATEMENT OF CASH FLOWS

For the six months ended 31 December

Note 1 Corporate information

These are the consolidated financial statements and notes of Aura Energy Limited and controlled entities (the "Group"). Aura Energy Limited is a company limited by shares, domiciled and incorporated in Australia.

The separate financial statements of the parent entity, Aura Energy Limited, have not been presented with this financial report as permitted by the Corporations Act 2001 (Cth).

a. Basis of preparation

i. Statement of compliance

The financial statements are general purpose financial statements that have been prepared in accordance with Australian Accounting Standards, including Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001 (Cth).

Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a financial report containing relevant and reliable information about transactions, events and conditions to which they apply. Compliance with Australian Accounting Standards ensures that the financial statements and notes also complywith International Financial Reporting Standards as issued by the IASB. Material accounting policies adopted in the preparation of these financial statements are presented below. They have been consistently applied unless otherwise stated.

These consolidated interim financial reports do not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual report for the year ended 30 June 2020 and any public announcements made by Aura Energy Limited during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001.

The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period.

The financial statements were authorised for issue on 30 March 2021 by the directors of the Company.

ii. Going concern

The financial statements have been prepared on a going concern basis, which contemplates the continuity of normal business activity and the realisation of assets and the settlement of liabilities in the ordinary course of business.

The Group incurred a loss for the half-year of $1,699,461 (2019: $1,231,480) and a net cash outflow from operating activities of $304,961 (2019: $330,023). Excluding non-cash based finance costs and impairment of exploration and evaluation the net loss after tax for the period was $1,487,164 (2019:

$898,896).

As at 31 December 2020, the Group had negative working capital of $2,636,293 (30 June 2020:

$963,013).

The ability of the Group to continue as a going concern is principally dependent upon the ability of the Group to secure funds by raising capital from equity markets or by other means, and by managing cash flows in line with available funds, and/or the successful development of the Group's exploration assets. These conditions indicate a material uncertainty that may cast doubt about the ability of the Group to continue as a going concern.

In assessing the Group as a going concern:

· the Directors anticipate to secure additional working capital through the issue of shares to sophisticated and professional investors approved at the Annual General Meeting of the company as disclosed in note 11 for $650,000;

· Settlement of the existing convertible note debt of $310,000 via the issue of shares (note 11);

· Settlement of the litigation accrual of $465,640 and related party payables via the issue of shares and options (note 11); and

· Raising of additional funds via an anticipated placement or rights issue.

Based on past experience, the Directors are confident that they can raise additional capital if and when required. Based upon cash flow forecasts, the directors are satisfied that the going concern basis of preparation is appropriate, including the meeting of exploration commitments.

Should the Group be unable to continue as a going concern it may be required to realise its assets and extinguish its liabilities other than in the normal course of business and at amounts different to those stated in the financial statements.

The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or to the amount and classification of liabilities that might result should the Group be unable to continue as a going concern and meet its debts as and when they fall due.

iii. Use of estimates and judgements

The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. These estimates and associated assumptions are based on historical experience and various factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected.

Note 2 Segment reporting

i. Identification of reportable segments

The Group operates predominantly in the mining industry. This comprises exploration and evaluation of uranium projects. Inter-segment transactions are priced at cost to the Group.

The Group has identified its operating segments based on the internal reports that are provided to the Board of Directors on a monthly basis. Management has identified the operating segments based on geographical location - Mauritania and Sweden, where exploration and evaluation activities take place, and Australia, as the corporate head office.

Corporate expenses include administration and regulatory expenses arising from operating an ASX listed entity.

Segment assets include the costs to acquire tenements and the capitalised exploration costs of those tenements. Financial assets including cash and cash equivalents, and investments in financial assets, are reported in the Treasury segment.

ii. Basis of accounting for purposes of reporting by operatingsegments

(1) Accounting policies adopted

Unless stated otherwise, all amounts reported to the board of directors, being the chief decision makers with respect to operating segments, are determined in accordance with accounting policies that are consistent to those adopted in the annual financial statements of the Group.

(2) Inter-segment transactions

An internally determined transfer price is set for all inter-segment sales.This price is reset quarterly and is based on what would be realised in the event the sale was made to an external party at arm's length. All such transactions are eliminated on consolidation of the Group's financial statements.

Corporate charges are allocated to reporting segments based on the segments' overall proportion of revenue generation within the Group. The board of directors believes this is representative of likely consumption of head office expenditure that should be used in assessing segment performance and cost recoveries.

Inter-segment loans payable and receivable are initially recognised at the consideration received/to be received net of transaction costs.If inter-segment loans receivable and payable are not on commercial terms, these are not adjusted to fair value based on market interest rates.This policy represents a departure from that applied to the statutory financial statements.

(3) Segment assets

Where an asset is used across multiple segments, the asset is allocated to that segment that receives majority economic value from that asset. In the majority of instances, segment assets are clearly identifiableon the basis of their nature and physical location.

(4) Segment liabilities

Liabilities are allocated to segments where there is a direct nexus between the incurrence of the liability and the operations of the segment. Borrowings and tax liabilities are generally considered to relate to the Group as a whole and are not allocated. Segment liabilities include trade and other payables and certain direct borrowings.

Note 3 Earnings per share

For the six months ended 31 December

  2020 2019

Note 4 Dividends paid and proposed

No dividends were paid during the half-year and no dividend is proposed to be paid as at the end of the half-year ended 31 December 2020 (2019: nil).

a. The value of the Group interest in exploration expenditure is dependent upon:

• The continuance of the Group's rights to tenure of theareas of interest;

• The results of future exploration; and

• The recoupment of costs through successful development and exploitation of the areas of interest, or alternatively, by their sale.

The Group's exploration properties may be subjected to claim(s) under Native Title (or jurisdictional equivalent), or contain sacred sites, or sites of significance to the indigenous people of Sweden and Mauritania.

As a result, exploration properties or areas within the tenements may be subject to exploration restrictions, mining restrictions and/or claims for compensation. At this time, it is not possible to quantify whether such claims exist, or the quantum of such claims.

On 22 May 2018, the Group lodged exploitation applications for Ain Seder, Oued El Foule Est and Oum Ferkik.

The Islamic Republic of Mauritania granted exploitation licences for the Ain Sder and Oued El Foule Est on 9 February 2019. The Group is in discussions with the government to secure an exclusivity over the Oum Ferkik tenement.

Covid-19 lockdowns have prevented the Group from undertaking negotiations of an exclusivity over the Oum Ferkik tenement. The board of directors believes its relationship with the government will result in it eventually securing an exclusivity and noted that the government had not revoked the Oum Ferkik tenement due to the representations made by the Group to secure the exclusivity.

Trade payables are non-interest bearing and arise from the usual operating activities of the Group. Trade and other payables are usually settled within the lower of terms or 30 days.

Due to the short-term nature of these payables, the carrying amounts recorded in the financial statements for trade payables and other payables are the fair values.

Note 7 Vendor obligations

31 December 30 June

2020 2020

$ $

Vendors of Nomads Mining Company sarl - 145,709

The Group extinguished the final entry fee obligations owing to Nomads Mining Company sarl with cash payments on the 8 and 9 September 2020.

On 18 August 2020, the Company entered into a short-term Loan Agreement with Lind Global Macro Fund LP for $106,000. A facility fee of $6,000 was payable on inception of the agreement. The lender advanced the Company the net amount on inception of the loan.

The loan matures on maturity 31 December 2020, and $127,000 was repayable to the lender under this agreement. At the date of this report, the loan has not been repaid. Interest of 10% per annum is payable on the overdue repayment.

(b) Convertible notes

On 30 April 2019, the Group entered into the Convertible Security Facility Agreement with Lind Global Macro Fund, LLP (see ASX Announcement, dated 30 April 2019) and a Follow-on Convertible Security Facility Agreement on 18 November 2019 (see ASX announcement, dated 18 November 2019). In total, Lind has converted $2,510,000 convertible notes and with a further

$310,000 convertible notes available for conversion. The Company has issued Lind 912,599,210 fully paid ordinary shares under the convertible note facilities. At the AGM on 17 March 2021, the shareholders approved the issue of 155,000,000 shares to Lind Global Macro Fund LP, to extinguish the liability of $310,000.

On 19 August 2020, the Group entered into a Convertible Securities Agreement with L1 Capital Global Opportunities Master Fund. The Group issued 250,000 convertible securities for $250,000. The securities carry a face value of $312,500 and a maturity date of 21 February 2021 or any date within 6 months of this date at the sole discretion of the investor. By 31 December 2020, $53,500 finance costs has been recognised on the agreement. At the AGM on 17 March 2021, the shareholders approved the issue of 50,000,000 Options with an exercise price of $0.004 each, as part of the convertible securities agreement. It is the Company's intention to settle the amount in cash.

Ordinary shares on issue at the end of the

financial year 2,557,535,966 2,557,535,966

The details of each issue of shares are as follows:

a Exercise of options over ordinary shares (expiry 15 November 2018) b Issue of shares for settlement of supplier obligations

c  Issue of shares for settlement of supplier obligations d Conversion of performance rights into ordinary shares e Issue of shares pursuant to private placement

f Issue of shares pursuant to private placement

g Issue of shares under terms and conditions of share purchase plan h Issue of shares for settlement of supplier obligations

i  Issue of collateral shares to Lind Global Macro Fund LP j Issue of shares for services under Letter of Engagement k Issue of shares for services under Letter of Engagement

l Issue of shares pursuant to securing option of gold exploration licence in Mauritania a Issue of shares on conversion of convertible notes

b Issue of shares on conversion of performance rights

c Issue of shares pursuant to securing Farm-in and Joint Venture with Nomads Mining Co sarl d Issue of shares for services under Letter of Engagement

e  Issue of shares for services under Letter of Engagement f Issue of shares on conversion of convertible notes

g Issue of shares for services under Letter of Engagement h Issue of shares on conversion of convertible notes

i Issue of shares for settlement of supplier obligations j Issue of shares for services as Joint Broker

k Issue of shares on conversion of convertible notes l Issue of shares on conversion of convertible notes m Issue of shares on conversion of convertible notes n Issue of shares on conversion of convertible notes o Issue of shares pursuant to Share Placement

p Issue of shares for services under Letter of Engagement q Issue of shares on conversion of convertible notes

r Issue of shares for services under Letter of Engagement s Issue of shares on conversion of convertible notes

t Issue of shares on conversion of convertible notes u Issue of shares pursuant to Share Placement

v Issue of shares on conversion of convertible notes

w Issue of shares for services under letter of Engagement x Issue of shares on conversion of convertible notes

y  Issue of shares on conversion of convertible notes z Issue of shares pursuant to Share Placement

aa Issue of shares for settlement of contract employee, consultants and drilling contractor obligations