Aura Egy Regulatory News (AURA)

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AURA ENERGY LIMITED

("Aura" or the "Company")

Half-Year for Financial Period Ended 31 December 2018

Aura Energy Limited is an Australian incorporated entity and listed on both the Australian Securities Exchange and the Alternative Investment Market. The Company has a diversified portfolio of assets including its advanced exploration assets comprising the Tiris Uranium project located in Mauritania and the Haggan Battery Metals project located in Sweden. The Company also holds soda ash research permits in Mauritania and has a number of gold tenement applications pending approval in Mauritania.

During the half-year, the Company was granted by the Mauritanian Government Exploitation Licences for Ain Sder and Oued el Foule Est tenements. The Company continued to progress the Tiris project definitive feasibility study (DFS) and continued to progress the Haggan polymetallic property, which contains significant quantities of Battery Metals including vanadium, cobalt and nickel, to scoping study as a precursor to undertaking an initial public offering (IPO) in order to enhance the valuation of the project.

The Company noted a change emerging in the uranium market. There are early signs of a sustained recovery in the uranium price with gains since September 2018.

Supply cuts from Canada and Kazakhstan have been the main drivers for the lift in spot prices and with production cuts likely to continue a number of commentators believe spot prices will hold in a tighter market. The Bureau of Resource and Energy Economics (BREE) maintain that inventory levels are likely to suppress price growth to some degree but there is a shift towards prices moving upwards. The impact of falling mine commencements and lower exploration have not been quantified by the market.

The Company has continued to raise with the Mauritanian Government the long delay in the grant of gold tenements. At the most recent meetings with the Government, the Company was informed that the tenements will be granted soon. A key diversification strategy for the Company is gold and base metals and the ground subject to the tenement applications is highly prospective.

The Haggan Battery Metals strategy has evolved from the Company's desire to optimise the output of the vast polymetallic resource. The significant vanadium content of the Haggan Battery Metals project has created significant opportunities for Aura. The board of directors resolved to complete a Scoping Study on the Haggan Battery Metals project prior to separately listing the project in order to enhance valuations of the proposed IPO vehicle. Once listed the IPO vehicle would be able to secure its own management, funding and technical expertise.

For more information please visit www.auraenergy.com.au or contact the following

CONDENSED CONSOLIDATED INTERIM STATEMENT OF PROFIT OR LOSS

AND OTHER COMPREHENSIVE INCOME

FOR THE HALF YEAR ENDED 31 DECEMBER 2018

The condensed notes on pages 7 to 17 are an integral part of these consolidated interim financial statements

CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2018

The condensed notes on pages 7 to 17 are an integral part of these consolidated interim financial statements

CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY

FOR THE HALF YEAR ENDED 31 DECEMBER 2018

The condensed notes on pages 7 to 17 are an integral part of these consolidated interim financial statements

CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS

FOR THE HALF YEAR ENDED 31 DECEMBER 2018

The condensed notes on pages 7 to 17 are an integral part of these consolidated interim financial statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE HALF YEAR ENDED 31 DECEMBER 2018

NOTE 1. REPORTING ENTITY

Aura Energy Limited (the "Company") is a Company incorporated and the laws and regulations of the Commonwealth of Australia.

The address of the Company's registered office is Level 1, 34-36 Punt Road, Windsor, Victoria, Australia. The consolidated interim financial statements as at and for the six-month period ended 31 December 2018 comprises the Company and its controlled entities (together referred to as the "Group" and individually as "Group entities"). The Group undertakes the exploration for and evaluation of uranium and gold opportunities in Mauritania and Battery Metals in Sweden.

The consolidated annual financial statements of the Group as at and for the year ended 30 June 2018 are available upon request from the Company's registered office or at www.auraenergy.com.

NOTE 2. STATEMENT OF COMPLIANCE

The consolidated interim financial statements have been prepared in accordance with Australian Accounting Standards, AASB 134 Interim Financial Reporting, and the Corporations Act 2001.

Selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in financial position and performance of the Group since the last annual consolidated financial statements as at and for the year ended 30 June 2018. The consolidated interim financial statements do not include all of the information required for full annual financial statements and should be read in conjunction with the consolidated annual financial statements of the Group as at and for the year ended 30 June 2018.

These consolidated interim financial statements were approved by the Board of Directors on 6 March 2019.

NOTE 3. SIGNIFICANT ACCOUNTING POLICIES

The accounting policies applied by the Group in preparing the condensed consolidated interim financial statements are the same as those applied by the Group in its consolidated annual financial statements as at and for the year ended 30 June 2018.

NOTE 4. ESTIMATES AND JUDGEMENTS

The preparation of the consolidated interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

In preparing these consolidated interim financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those applied to the condensed consolidated financial statements as at and for the year ended 30 June 2018.

KEY JUDGEMENT-EXPLORATION AND EVALUATION EXPENDITURE

Exploration and evaluation expenditure is carried forward where right of tenure of the area of interest is current. These expenditures are carried forward in respect of areas that have not, at the reporting date, reached a stage that permits reasonable assessment of the existence of economically recoverable reserves. The carrying value of capitalised exploration and evaluation expenditure at the reporting date is $19,280,087.

For the six-month period to the 31 December 2018, the Group completed an assessment of its tenement assets and recognized an impairment on the relinquishment of a tenement in Sweden of $178,087.

NOTE 5. GOING CONCERN

The consolidated interim financial statements have been prepared on a going concern basis, which envisages 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 after tax for the six-month period ended 31 December 2018 of $1,399,044 (2017: loss after tax $931,680) and net cash outflows from operating and investing activities of $2,239,057 (2017: $3,141,164). As at 31 December 2018, the Group had working capital of $293,631 (June 2018: $2,597,438).

As at the date of this half-year report, the Company has received valid Subscription Deeds for $863,000 pursuant to the Share Placement. All monies are to be received by 15 March 2019 with the Company having received $407,000 to date.

The ability of the Company to continue as a going concern is principally dependent upon the ability of the Company to secure funds by raising capital from equity markets and managing cashflow in line with available funds. These conditions indicate a material uncertainty that may cast significant doubt about the ability of the Company to continue as a going concern.

In the event the above matters are not achieved, the Company will be required to raise funds for working capital from debt or equity sources.

The directors have prepared a cash flow forecast, which indicates that the Company will have sufficient cash flows to meet all commitments and working capital requirements for the 12-month period from the date of signing this financial report.

Based on the cash flow forecasts and other factors referred to above, the directors are satisfied that the going concern basis of preparation is appropriate. In particular, given the Company's history of raising capital to date, the directors are confident of the Company's ability to raise additional funds as and when they are required.

Should the Company 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 Company be unable to continue as a going concern and meet its debts as and when they fall due.

NOTE 6. NEW AND AMENDED ACCOUNTING STANDARDS ADOPTED BY THE GROUP THAT ARE APPLICABLE TO THE PRESENT HALF-YEAR REPORTING PERIOD

The Group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (the AASB) that are relevant to its operations and effective for an accounting period that begins on or after 1 January 2018.

New and revised Standards and amendments thereof and Interpretations effective for the current year that are relevant to the Group include:

• AASB 9 Financial Instruments and related amending Standards

• AASB 15 Revenue from Contracts with Customers and related amending Standards

• AASB 2016-5 Amendments to Australian Accounting Standards - Classification and Measurement of Share-based Payment Transactions

AASB 9 Financial Instruments and related amending Standards

In the current year, the Group has applied AASB 9 Financial Instruments (as amended) and the related consequential amendments to other Accounting Standards that are effective for an annual period that begins on or after 1 January 2018.

The transition provisions of AASB 9 allow an entity not to restate comparatives however there was no material impact on adoption of the standard.

Additionally, the Group adopted consequential amendments to AASB 7 Financial Instruments: Disclosures.

In summary AASB 9 introduced new requirements for:

• The classification and measurement of financial assets and financial liabilities,

• Impairment of financial assets, and

• General hedge accounting.

AASB 15 Revenue from Contracts with Customers and related

amending Standards

In the current year, the Group has applied AASB 15 Revenue from Contracts with Customers (as amended) which is effective for an annual period that begins on or after 1 January 2018.

AASB 15 introduced a 5-step approach to revenue recognition.

Far more prescriptive guidance has been added in AASB 15 to deal with specific scenarios.

There was no material impact on adoption of the standard and no adjustment made to current or prior period amounts.

NOTE 7. OPERATING SEGMENTS

The Group conducts mineral exploration in two geographical segments being Mauritania and Sweden and operates in one industry mineral exploration and mining. Non-reportable segment financial information is reported as Corporate.

NOTE 7. OPERATING SEGMENTS (CONTINUED)

NOTE 8. CASH AND CASH EQUIVALENTS

NOTE 9. TRADE AND OTHER RECEIVABLES

Value-added taxes receivable is a generic term for broad-based consumption taxes that the Group is exposed to in the various countries in which it conducts its exploration activities - Australia (goods-and-service tax, Mauritania (value-added tax) and Sweden (value-added taxes).

NOTE 10. OTHER CURRENT ASSETS

NOTE 11. EXPLORATION AND EVALUATION EXPENDITURE

The recoverability of the carrying amounts of exploration and evaluation assets is dependent on the continuation of the Group's right to tenure, future exploration and successful development and commercial exploitation of the respective area of interest or alternatively by their sale.

The Company is in negotiation with the government of Mauritania to secure the renewal of Oum Ferkik tenement which formed part of the Application for an Exploitation Licence on 21 May 2017. The Company has expended $2.583 million on the Oum Ferkik tenement.

NOTE 12. TRADE AND OTHER PAYABLES

Trade and other payables are unsecured and non-interest-bearing obligations of the Company which arise from the business activities. Trade payables and other accruals, with the exception of amounts due to directors of the Company, are settled within the lower of terms or 30 days.

NOTE 13. SHORT-TERM PROVISIONS

NOTE 14. ISSUED CAPITAL AND RESERVES

(I) MOVEMENT IN SHARES ON ISSUE

The Company has shares on issue of 1,073,684,602(30 June 2018: 1,069,390,795) and paid-up capital of $45,173,083 (30 June 2018: $44,698,295). All shares on issue are fully paid ordinary shares at no par value.

Note (i)

17,500,000 performances awarded to PD Reeve vested on 30 November 2018 pursuant to the milestones approved by shareholders on 30 November 2017. The ordinary shares were listed on the ASX/AIM on 4 January 2019.

NOTE 14. ISSUED CAPITAL AND RESERVES (CONTINUED)

(II) MOVEMENT IN OPTIONS ON ISSUE

The Company has options over ordinary shares granted on issue of 112,314,862 (30 June 2018: 131,275,807 options over ordinary shares).

No options over ordinary shares were granted to shareholders or employees for the six-month period ended 31 December 2018 (31 December 2017: 18,608,333 options over ordinary shares were granted).

(III) MOVEMENT IN PERFORMANCE SHARES ON ISSUE

The Company awarded 15,000,000 performance shares to employees and consultants on 17 June 2018 which was ratified by directors on 4 September 2018. The Company 32,500,000 performance shares on issue (30 June 2018: 35,000,000).

17,500,000 performance shares vested during the half-year.

NOTE 15. FINANCIAL INSTRUMENTS

The Group's financial instruments consist of financial assets and liabilities which are measured at amortised cost including trade and other receivables and trade and other payables and convertible notes.

The carrying amount of the financial assets and liabilities included in these condensed consolidated interim financial statements approximate their fair value.

NOTE 16. CONTINGENT LIABILITIES

On 15 October 2010, the Company and Global Coal Management plc entered into a Share Sale and Purchase Agreement which resulted in the Company acquiring all the shares on issue in GCM Africa Uranium, the entity which held the beneficial interest of GCM in the above-mentioned research permits in Mauritania.

The Company paid GCM US$100,000 on execution of the Share Sale and Purchase Agreement; US$472,183 in cash plus 2,000,000 fully paid ordinary shares in the Company on completion (due diligence); and, US$500,000 on the first anniversary of completion. The Company also agreed to pay a contingent consideration:

· US$2,000,000 (in cash and shares as determine by the Company) on the delineation of 75 million pounds or more Initial Resource (not defined in the Letter Agreement) under the Australasian Code for the Reporting of Exploration Results, Mineral Resources and Ore Reserves; and

· US$400,000 in cash and 400,000 fully paid ordinary shares in the Company for each Subsequent Resource of 6,500,000 pounds up to a maximum of US$4,000,000 in cash and 4,000,000 in fully paid ordinary shares.

The obligations to make the contingent consideration payments are held by the Company and the contingent consideration is only payable if the Initial Resource and Subsequent Resource are achieved within 10 years of the date of the Share Sale and Purchase Agreement. Accordingly, the obligation to pay the contingent consideration expires on 15 October 2020.

There are no other contingent liabilities as at 31 December 2018.

NOTE 17. EVENTS SUBSEQUENT TO REPORTING DATE

On 29 January 2019 the Company executed a n offtake Agreement with Curzon Uranium Trading Pty Ltd. Under the terms and conditions of this agreement the Company has agreed to delivery 800,000 pounds at an average price of US$44.00 per pound uranium concentrate from the start of production of U3O8 at the Tiris project over 7 years. The contract also provides an option for the company to deliver a further 1,800,000 at fixed and market prices

On 30 January 2019 the Company executed a Mandate Letter with SD Capital Pty Ltd and GKB Ventures Pty Ltd to lead the financing of the Tiris and Haggan projects.

On 5 February 2019, the Company announced an equity raising on the following terms and condition:

(i) A Share Placement and Share Purchase Plan to raise $1-2 million at a share price of 1.6 cents per share with:

(a) an Accompanying Option on a 1:3 basis (one option over ordinary share for every three shares subscribed to in the Share Placement and Share Purchase Plan) exercisable at 2.2 cents per option over ordinary share with an expiry date being 2 years from the date of issue; and

(b) a Loyalty Option on a 1:5 basis (one option over ordinary shares for every five shares subscribed to in the Share Placement and Share Purchase Plan) subscribed to in the Share Placement and Share Purchase Plan with an exercise price of 2.2 cents per option over ordinary share with an expiry date being 1 year from date of issue; and

(ii) A Loyalty Option Entitlement to all shareholders on a 1:5 basis (one option over ordinary shares for every five shares held at the Loyalty Options Entitlement Offer Closing Date) with an exercise price of 2.2 cents per option over ordinary share with an expiry date being 1 year from date of issue.

As at the date of this half-year report, the Company has received valid Subscription Deeds for $863,000 pursuant to the Share Placement. All monies are to be received by 15 March 2019 with the Company having received $407,000 to date.

On 15 February 2019, the Company executed a Settlement Agreement with Geo-gruppen AB to settle invoices raised for a 2,000-metre drilling campaign by way of the issue of fully paid ordinary shares with the company guaranteeing the payment of the face value of the invoices raised by Geo-gruppen AB in Swedish Kroner.

ADDITIONAL INFORMATION

TENEMENT REPORT

RESERVES

TIRIS RESOURCE - MAURITANIA

HÄGGÅN RESOURCE

Uranium 803 Million/pounds

Vanadium 15,100 Million/pounds

Nickel 1,640 Million/pounds

Zinc 2,230 Million/pounds

Molybdenum 1,070 Million/pounds