Aura Egy Regulatory News (AURA)

KEY POINTS:

QUARTER SUMMARY

The Company remains focussed on the key elements of its business despite the ongoing shareholder activism within the Company and the impact of Covid-19 on advancing its projects.

Aura is in the enviable position of possessing a construction-ready uranium project which the board of directors believes is one of the most compelling uranium development projects in the world. The focus on financing activities for the Tiris Uranium Project via the Export Credit Agency financing process continued with initiation of discussions for additional long-term uranium sale contracts.

Immediately after the end of the quarter, the Company signed a non-binding term sheet for the creation of a joint venture vehicle with TSX-listed Chilean Metals Inc for Aura's gold, base and battery metal tenements in Mauritania.

The Swedish compensation claim continues with the Company having progressed funding arrangements for this litigation during the period.

A general meeting of shareholders was held on 21 May 2020. At this meeting shareholder rejected all six nominees put forward by ASEAN Deep Value Fund and Mr JL Bennett, including two nominees proposed by Mr JL Bennett that were German citizens residing in Panama. Despite all resolutions being rejected by shareholders, ASEAN has requisitioned another general meeting of shareholders for 14 August 2020 where it will seek to take control of the board of directors and therefore, control of the Company without making an offer.

With the board of directors focused on creating shareholder value through advancing exploration on its gold assets and funding the development of the Tiris project, the actions of ASEAN, is simply undermining relationships the board of directors and management have developed in Mauritania and Sweden as well as potentially undermining the proposed gold transaction. Despite numerous requests for ASEAN to state their exploration and mining expertise, the Company has never received a response. The board of directors believe the proposed nominees put forward by ASEAN do not have the requisite skills or work experience to conduct exploration and development activities. None of the nominees of ASEAN have disclosed any mining experience.

ASEAN is focused on placing the Company under extreme financial pressure so that it will be forced in order to push shareholders to support a funding arrangement that will extract a royalty of around Tiris Uranium Project for US$17 million (A$27 million) for only A$3 million funding.

As shareholders are aware from other announcements made by the Company, the proposed funding arrangement put forward by ASEAN without disclosing the party that would provide the funding, required the Company to buy back terms of up to 200%, or US$9 million, should the Company wish to unwind the funding arrangement. The board of directors (other than Mr JL Bennett) rejected the funding arrangement as the discussions lacked transparency in order for the board of directors to discharge their duty as directors of a publicly listed entity and the terms were fundamentally value destroying for shareholders.

The terms were simply crippling for the Company in terms of achieving mine development finance in the future and add significantly to the operating cost of the mine.

The board of directors remain concerned that the actions of ASEAN has the potential to negatively impact the listing of the Company on ASX and AIM.

TIRIS PROJECT, MAURITANIA (AURA 85%)

Other than financing discussions no activity took place on the Tiris Project as the closure of the Australian borders with the outbreak of the coronavirus pandemic prevented any travel by directors and management to Africa.

HÄGGÅN BATTERY METALS PROJECT, SWEDEN (AURA 100%)

The Häggån Battery Metals project was placed on care-and-maintenance following the outbreak of the coronavirus pandemic.

The Swedish compensation claim remains ongoing and the Company continues to be steadfast in action to recover the value of the ban on the mining of uranium mineralisation within the Haggan deposit.

TASIAST SOUTH GOLD PROJECT, MAURITANIA (AURA 100%)

No new work occurred on the Tasiast South Project during the quarter.

Following the end of the quarter the Company executed a Term Sheet with Chilean Metals Inc for the funding of $4.5 million of expenditure with Chilean earning a 50% equity interest in the entity that will eventually own the gold assets.

The transaction is subject to due diligence and will be put to shareholders for approval at a general meeting in September 2020.

CORPORATE

Shareholder Action

On 21 May 2020, shareholders rejected all resolutions put to them by Mr JL Bennett pursuant to a director's requisition of a shareholders meeting and ASEAN pursuant to a shareholder's requisition of a general meeting.

Despite this outcome, ASEAN Deep has requisitioned another meeting to restructure the board of directors and to deliver control ASEAN control of the Company without paying a premium.

Shareholders should download from the company's website the Notice of Meeting which sets out clearly why they should again reject the actions of ASEAN. The Notice of Meeting specifically addresses the matters raised by ASEAN and highlights to manipulation of financial information and, in some incidents the superficial knowledge of the day-to-day activities of the Company.

The nominees put forward by ASEAN have no experience in exploration, mine development and mining operations and the crippling structure of its proposed funding arrangement completely undermines mine development finance that forms the basis of funding African mining projects.

Shareholders will recall, ASEAN proposed the following terms:

· Convertible Note - A$3-4 million

· Coupon/Interest rate - 15% p.a.

· Term - 24 months

· Conversion Price - 1-month VWAP at 24 months

· Aura to have a right to buy back the Convertible Note after:

o 1 year for A$6 million (100% of face value); or

o 2 years for A$9 million (200% of face value)

· Royalty - US$1 per pound royalty on each pound of Tiris production, which based on the current mining plan would be equivalent to US$17m over the current life-of-mine

· Majority board representation for ASEAN for arranging the convertible note when its holding in the Company is only 18%.

· Finder's fee payable of 5% of the value of the replacement note raised (the equivalent to 23 million options in the Company at an exercise price of at 0.7 cents) which ASEAN failed to disclose in a letter to shareholders prior to the meeting on 21 May 2020.

The board of directors rejected the offer on these terms which it considered to be unacceptable and fundamentally excessive with comparable transactions. In particular, the US$17 million royalty to be granted was disproportionate to the A$3-4 million funding arrangement under a convertible note instrument. This royalty would force the overall cost of the ASEAN convertible note to be several orders of magnitude more expensive than the existing convertible note.

Additionally, ASEAN refused to identify the counterparties behind the funding to be provided for the proposed convertible note. The board of directors were advised in a conversation with advisors for ASEAN that the party was an individual whilst ASEAN Deep Value Fund stated in the letter to shareholders it was an investment bank. The majority of the board of directors did not believe the overall terms of the convertible note proposed by ASEAN were in the best interests of the Company and its shareholders. Negotiations on the note were then suspended.

The board of directors also note other elements of ASEAN requests, including:

· Prior to the election of Mr JL Bennett, ASEAN requested Aura appoint Mr JL Bennett to the board of directors with immediate effect and;

· ASEAN requested the board of directors to discontinue legal proceedings against Mr Bennett for the alleged non-payment of subscription monies in the February 2019 placement notwithstanding the fiduciary duty of directors to continue this action.

Further, there is serious potential for disruption to AIM listing with significant changes to the board of directors as the Nominated Advisor must be satisfied with the suitability of the board.

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

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