Aura Energy (ASX: AEE) reports 28% return for Tiris uranium project in Mauritania

Aura Energy Limited (ASX: AEE; AIM: AURA), the Australian uranium developer advancing the Tiris Uranium Project in Mauritania, has reported a post-tax net present value of US$500.3 million following completion of its bankable feasibility study on 16 October 2026. The study outlines a 26-year operation producing approximately 46.1 million pounds of saleable uranium oxide, with development capital estimated at US$349.8 million and a post-tax internal rate of return of 28%. Aura Energy is targeting a final investment decision in December 2026 and first production by the end of 2028, supported by a processing strategy designed to reduce the quantity of material requiring chemical treatment. The principal challenge is translating these economic forecasts into binding construction financing and technically validated operating performance, particularly because a substantial portion of the longer-term production schedule includes lower-confidence Inferred Mineral Resources.

How does Aura Energy’s Tiris bankable feasibility study value the Mauritanian uranium project?

The completed study estimates a post-tax net present value of US$500.3 million using an 8% real discount rate and a long-term uranium price of US$90 per pound. The corresponding post-tax internal rate of return is 28%, with a forecast capital payback period of approximately 3.2 years from first production. These figures are presented on an ungeared, 100% project basis, rather than as the current value of Aura Energy’s listed shares. After accounting for the Mauritanian state’s carried interest, the estimated net present value attributable to Aura shareholders is approximately US$425.3 million.

Development capital is estimated at US$349.8 million, while peak funding requirements are approximately US$379.6 million under the modelled operating and working capital assumptions. The study forecasts undiscounted life-of-mine free cash flow of US$1.479 billion before financing effects. Average annual production is projected at approximately 1.8 million pounds of uranium oxide over the 26-year operating period. These estimates provide a quantified economic framework but remain dependent on the assumptions used for production, commodity prices, costs and financing.

The study also forecasts average annual revenue of approximately US$158 million and average annual EBITDA of US$93 million over the life of the project. The difference reflects the operating costs associated with mining, processing and delivering uranium to market. Actual financial results will depend on the timing of production and the prices achieved under future sales contracts. The stated forecast should not be interpreted as recurring annual earnings already available to Aura Energy.

Why does Tiris have a 26-year production target when its Ore Reserve supports approximately 18 years?

Aura Energy has increased the Tiris Ore Reserve by approximately 11% to 74.6 million tonnes grading 227 parts per million uranium oxide. The updated estimate contains approximately 37.3 million pounds of uranium oxide and comprises both Proved and Probable material. The Ore Reserve alone supports approximately 18 years of production under the company’s development assumptions. The longer 26-year production target also incorporates material currently classified as Inferred Mineral Resources.

Approximately 67.1% of the scheduled ore tonnage consists of Ore Reserves, while 32.9% comprises Inferred Mineral Resources. By contained uranium oxide, the reserve-backed share is approximately 67.7%. Inferred material has a lower level of geological confidence and is not equivalent to an Ore Reserve. Aura Energy therefore needs additional drilling and resource evaluation before assuming that all the material can support a reliable long-term mining schedule.

The lower-confidence component becomes more important during the later years of the proposed operation. The study indicates that the share of Inferred material rises substantially after the earlier reserve-backed production years, making future resource conversion important to preserving the 26-year mine life. A successful infill drilling programme could strengthen the geological basis for later production. However, there is no certainty that every part of the Inferred resource will be upgraded or mined economically.

The broader Tiris Mineral Resource stands at approximately 184 million tonnes grading 225 parts per million uranium oxide, containing 91.3 million pounds. That inventory provides substantial geological potential beyond the currently declared Ore Reserve. The economic significance will depend on mining and processing conditions as well as classification confidence. Aura Energy must distinguish the resource inventory from the material that supports its current reserve-based development plan.

How could Tiris produce uranium at an all-in sustaining cost of US$41.25 per pound?

The Tiris development concept is based on shallow mineralisation that can potentially be mined without conventional drilling and blasting. The proposed operation also avoids the need for the extensive crushing and grinding systems associated with many hard-rock deposits. These characteristics can reduce certain mining and processing costs. However, the ore’s relatively low uranium concentration makes efficient beneficiation and chemical recovery essential.

The study forecasts an average C1 cash operating cost of US$32.53 per pound and an all-in sustaining cost of US$41.25 per pound over the mine life. At the assumed US$90 uranium price, the difference between selling price and all-in sustaining cost is US$48.75 per pound. This represents an indicative margin of approximately 54% before considering costs and accounting items outside the AISC definition. It is not equivalent to a statutory net profit margin.

Aura Energy’s proposed beneficiation process is designed to reject approximately 88% of the mined ore mass while retaining about 91.9% of the uranium. Concentrating the uranium-bearing portion of the ore reduces the volume of material requiring subsequent chemical processing. The study indicates that beneficiation could increase the grade of material entering the leach circuit to approximately 1,697 parts per million. The ability to achieve this separation efficiently is central to the forecast operating costs.

The processing flowsheet incorporates technologies including the ATA dewatering system developed by Clean TeQ Water and moving-bed ion exchange. Aura Energy has undertaken metallurgical testing to support the proposed configuration, but commercial performance remains to be demonstrated at the intended operating scale. The planned pilot plant programme is therefore important for establishing recovery rates, reagent consumption and the handling of fine material. Successful testing would strengthen the technical assumptions underlying the financial model.

How sensitive is Aura Energy’s US$500 million Tiris valuation to changes in uranium prices?

The Tiris feasibility study includes economic scenarios using uranium prices between US$70 and US$120 per pound. At US$70 per pound, the forecast post-tax net present value declines to approximately US$221.2 million and the internal rate of return falls to 17%. At US$120 per pound, the estimated net present value increases to US$914.6 million, with an internal rate of return of 41%. The wide range demonstrates how strongly the project’s financial returns depend on the realised uranium price.

The sensitivity also affects the capital payback period. At US$70 per pound, the estimated payback period extends to 4.6 years from first production, compared with 3.2 years under the base case. At US$120 per pound, the modelled payback period falls to approximately 2.1 years. The project remains forecast to generate positive value under the lower-price scenario, but returns become materially less attractive. These scenarios are financial estimates rather than predictions of future uranium prices.

Uranium demand is influenced by nuclear electricity generation, reactor operating lives, new construction and fuel procurement strategies. Utilities typically manage supply requirements through a combination of long-term contracts and other purchasing arrangements. However, the price at which Aura Energy can sell future production will depend on the commercial terms it negotiates. The feasibility study’s assumed uranium price is not a guarantee of realised revenue.

The company has previously disclosed uranium offtake arrangements covering part of its intended production. Additional contracts could improve revenue visibility and support project financing discussions, depending on pricing and volume commitments. Nevertheless, the majority of future production remains exposed to further sales arrangements and market conditions. Funding providers will examine the relationship between contracted revenue, commodity prices and operating costs when assessing financing capacity.

Can Aura Energy secure the US$400 million funding package assumed in its Tiris feasibility study?

The feasibility model assumes approximately US$400 million in project funding, comprising US$220 million of debt and US$180 million in equity, royalties or other forms of equity-related capital. These are financing assumptions rather than funds already committed or received. Aura Energy has been pursuing discussions with prospective lenders and strategic investors to establish a bankable financing package. The final structure could differ materially from the assumptions used in the economic model.

The company has previously discussed potential senior debt funding of approximately US$150 million to US$170 million with the United States International Development Finance Corporation. It has also entered a non-binding memorandum of understanding with a major international nuclear utility covering potential investment, uranium offtake and technical cooperation. These discussions could support the financing strategy if they progress into binding commitments. Neither the memorandum nor the financing discussions should be treated as an executed funding agreement.

The funding requirement is substantial relative to Aura Energy’s current corporate cash resources. The company reported A$10.6 million in cash at 30 September 2026, following operating cash outflows of approximately A$2.6 million and investing outflows of A$2.6 million during the quarter. The reported expenditure rate illustrates the importance of managing liquidity while negotiating longer-term project financing. The company may need to adjust discretionary expenditure or obtain additional corporate funding if the process takes longer than anticipated.

Project finance can reduce the amount of direct shareholder equity required, but debt creates interest and repayment obligations that must be supported by operating cash flows. Equity or equity-linked financing may avoid some fixed repayment requirements while introducing potential dilution. The economics of the funding structure will therefore influence the returns available to existing shareholders. Securing financing on acceptable terms is as important as the headline valuation contained in the feasibility study.

Why does the November pilot plant programme matter before the December 2026 investment decision?

Aura Energy intends to undertake a pilot plant programme at Bir Moghrein in Mauritania during November and December 2026. The programme is expected to process more than 80 tonnes of ore representing the principal material types identified at Tiris. It will test important elements of the flowsheet under more integrated operating conditions than laboratory-scale studies. The results are intended to support technical confidence among prospective financiers and their advisers.

The processing work will examine beneficiation, dewatering, uranium recovery and the management of process water and reagents. These factors influence both capital requirements and operating costs, particularly at a project dependent on removing a large proportion of mined material before chemical treatment. Technical problems could require additional engineering or changes to the process configuration. Successful validation would reduce uncertainty without eliminating the risks associated with construction and commissioning.

Aura Energy has indicated that the final investment decision remains targeted for December 2026, with construction expected to begin during the first quarter of 2027 and first production targeted by the end of 2028. Achieving that timetable would require sufficient confidence in the technical design and access to committed financing. The proximity of pilot testing and the intended investment decision leaves a relatively concentrated period for completing important work. Any financing or technical delays could alter the schedule.

What does the Tiris feasibility study mean for Aura Energy’s uranium development outlook?

The new study provides Aura Energy with a more detailed technical and financial basis for advancing Tiris toward development. The project benefits from shallow mineralisation, a defined Ore Reserve and a processing strategy designed to limit operating expenditure. Its forecast returns suggest commercial potential across several uranium price scenarios. However, the full production target depends partly on Inferred material, and the company has not yet secured the financing required to commence full construction.

The next measurable milestones are successful pilot-scale processing, binding financing arrangements and a formal investment decision. Additional drilling will also be needed to strengthen the reserve base supporting later production years. A completed financing package consistent with acceptable shareholder returns would materially improve the project’s development position. Without that funding, even favourable feasibility economics cannot guarantee that the proposed mine will enter production on the current timetable.

Key takeaways from Aura Energy’s Tiris uranium bankable feasibility study

• Aura Energy reported a US$500.3 million post-tax project NPV at an 8% real discount rate.
• The estimated value attributable to Aura shareholders is US$425.3 million.
• Development capital is forecast at US$349.8 million.
• The study outlines 46.1 million pounds of uranium oxide production over 26 years.
• The updated Ore Reserve contains approximately 37.3 million pounds of uranium oxide.
• Around 32.9% of the production schedule by ore tonnes depends on Inferred Mineral Resources.
• Forecast C1 costs are US$32.53 per pound, with AISC of US$41.25 per pound.
• The assumed US$400 million financing package remains uncommitted.
• Pilot plant testing is planned for November and December 2026.
• Aura Energy is targeting a final investment decision in December and production by the end of 2028.