TIDMAURA
RNS Number : 3329O
Aura Energy Limited
07 October 2021
7(th) October 2021
US $ 10m Offtake Financing Agreement for Tiris Uranium
Project
Lifting of ASX Trading Halt
KEY POINTS:
-- Aura has entered a US$10 m Offtake Financing Agreement with
Curzon, with the funds to be used for mining working capital and
production commencement. The agreement includes an additional up to
US$10m facility at the lender's sole discretion. The potential
maximum available under the Agreement is US$20m.
-- The Offtake Financing Agreement comprises the Uranium Offtake
Agreement executed with Curzon in January 2019 and a new Financing
Agreement.
-- As a boutique London based commodities partnership firm,
Curzon takes a long-term investment approach and currently holds a
diversified portfolio of off-takes in the uranium sector around the
world, to supply electrical utilities with nuclear fuel.
-- The Offtake Financing Agreement follows the recent Tiris
resource upgrade [1] and positive change in sentiment towards
uranium driven by a shift towards global decarbonised power [2]
.
-- The current Offtake Agreement with Curzon is for up to 15% of
proposed production, with the ability for Aura Energy to undertake
further offtake finance agreements.
-- As announced on 1 April 2021, Aura is offering a fully
underwritten 1 Loyalty Option Entitlement Rights Issue ("Options")
for every 3 Shares held set for the Record Date of 22(nd) October
2021 .
Aura Energy Limited (ASX:AEE, AIM:AURA) ("Aura", the "Company")
is pleased to announce that the Company has entered a legally
binding US$10m Offtake Financing Agreement ("Agreement") with
Curzon Uranium Trading Limited ("Curzon"), with the funds to be
used for working capital for late stage project construction, and
production commencement. The agreement includes an additional up to
US$10m facility at the lender's sole discretion. The potential
maximum available under the Agreement is US$20m.
The Offtake Financing Agreement comprises a variation of the
Uranium Offtake Agreement executed with Curzon in January 2019 and
a new Financing Agreement. The variation of the existing Offtake
Agreement extends its term to include an anticipated production
start date during calendar 2024.
The Uranium Offtake Agreement executed with Curzon in January
2019 [3] provided for the sale of 800,000 pounds of uranium
production at fixed prices, 750,000 pounds at market linked pricing
and with a further 1.05 million pounds of uranium production
available to Curzon as optional volumes at fixed and market
pricing, with the average price above US$44 per pound U(3) O(8) .
The January 2019 Offtake Agreement is over a seven-year period
starting from the commencement of production.
With the original production estimate of approximately 1 million
pounds of U(3) O(8) pa, the fixed pricing volumes of the original
2019 Offtake Agreement account 150,000 pounds of U(3) O(8) pa.
This gives the ability for Aura Energy to undertake further
offtake finance agreements and be exposed to potentially higher
uranium prices.
Aura Energy Limited wishes to advise shareholders in the United
Kingdom that further to the announcement from 4 October 2021, the
Company's shares recommenced trading at market open on the ASX
today.
Curzon Group - London Based Commodities Partnership Firm
The Curzon group of companies has provided offtake and financing
services to the resources sector for over 10 years, and is a
well-known and respected name in the industry, focusing on the
front end of the nuclear fuel value chain with a particular focus
on yellowcake.
As a boutique London based commodities partnership firm, Curzon
takes a long-term investment approach and currently holds a
diversified portfolio of off-takes in the uranium sector around the
world, to supply electrical utilities with nuclear fuel components
on a long-term basis.
Curzon is actively seeking to expand this part of its uranium
trading business, and to this effect, sees the extension of the
offtake financing facility as a means to leverage time to
production of uranium ore from the Tiris Uranium Project.
Commenting on the Offtake Financing Agreement, Chairman, Martin
Rogers, said:
"We are delighted to have entered the Offtake Financing
Agreement with Curzon, as this perfectly positions Aura Energy with
a low capex and low operating cost project, financing agreement and
offtake agreement to rapidly progress Tiris Uranium into
production."
"Sentiment towards uranium and nuclear power is shifting rapidly
amongst investors and we see considerable potential to expand our
resource, production throughput and undertake further offtake
finance agreements."
"The implications of a potential doubling in electricity demand
over the next three decades, along with pressure to decarbonise our
power sector could prove huge for uranium." [4]
"With the DFS capital estimate recently updated with 2021 global
conditions [5] , Aura has a current and accurate capital estimate,
providing a clear path to near term production with known costs and
overheads, as we fast track the Tiris Uranium Project towards first
cashflow."
Tiris Uranium Definitive Feasibility Study
In August 2021, the Company announced that it had successfully
restated the Tiris Uranium Project Definitive Feasibility Study
("DFS"), updating the capital costs from the DFS completed in
2019.
The capital update to the DFS has reconfirmed the Project as
having positive economic figures, a low-cost basis and attractive
economic return for the Project.
This presents a robust opportunity for Aura to enter uranium
development early in the commodity cycle, maximising shareholder
value as the uranium market recovers.
The updated DFS coupled with the fact that uranium demand is
increasing, driven by a shift towards zero carbon energy
transition, with nuclear power anticipated to grow 2.6% annually
and by 56% in total by 2040 [6] , has been a driving factor behind
Curzon revising the 2019 offtake agreement to also include a
financing component.
Commenting on the Agreement, Curzon Head of Uranium, Bram
Vanderelst, said:
"We are pleased to have entered an Offtake Financing Agreement
with Aura Energy, with uranium now positioned as one of the energy
sources of choice, as the world moves towards a greener
future."
"The Tiris Uranium Project is a compelling low-cost and
low-CAPEX project in an attractive mining continent and region,
hence Curzon decided to extend pre-export finance coupled with the
existing 2019 offtake arrangement. We look forward to seeing the
Project progress towards production in the near-term."
Reminder: Loyalty Option Entitlement Issue
As updated on ASX announcement 22(nd) September 2021 following
from the original announcement of 1st April 2021, the Company will
undertake a fully underwritten Loyalty Option Rights Entitlement
Issue one month following its reinstatement to the Official List of
the ASX, that is with a Record Date of 22(nd) of October 2021. This
offer will only be available to Australian and New Zealand
registered shareholders.
The Loyalty Options Entitlement Rights Issue will consist of 1
option for every 3 AEE shares held, with the Loyalty Options having
an upfront payment of $0.015 each, an exercise price of $0.052, and
expiry of 30(th) June 2024.
The Company will apply for the Options to be listed on the ASX,
will issue a prospectus and details of Loyalty Options Rights
Entitlement Issue shortly.
Key Terms of the Offtake Financing Agreement:
Binding: This is a legal binding agreement between the
parties
Principle: US$10 million, with an additional up to US$10m
facility at the lender's sole discretion (total facility up to
US$20 million)
Interest Rate: 10% p.a.
Term: 12 months from drawdown
Drawdown : The facility can be drawn down at any time up to
commencement of production
Payments : repayment in US$, noting lender has the option to
offset uranium production against loan repayments on existing
offtake agreement terms [7]
Costs: costs for both parties are borne by the borrower
Default: Normal events of default apply, including
non-repayment, breach of Offtake or Financing Agreement terms, at
which time the lender may cancel all obligations of the lender and
declare the loan immediately due and payable
Loan Conditions: The Project has obtained all necessary
licences. All government, intergovernmental and export agreements
are in place for the country of Mauritania. An engineering,
procurement and construction (EPC) contract is in place to show
production start date within 12 months from the facility drawdown
date.
This ASX Release was authorised by the Aura Energy Board of
Directors.
For Further Information, please contact:
Martin Rogers Jane Morgan
Chairman JMM
Aura Energy Limited Investor & Media Relations
info@auraenergy.com.au jm@janemorganmanagement.com.au
+61 405 555 618
SP Angel Corporate Finance LLP WH Ireland Limited
(Nominated Advisor and Joint (Joint Broker)
Broker) Adrian Hadden
Ewan Leggat Andrew de Andrade
Caroline Rowe Telephone: +44 (0) 207 220 1666
Telephone: +44 (0) 203 470 0470
---------------------------------
About Aura Energy (ASX:AEE, AIM:AURA)
Aura Energy is an Australian based minerals company that has
major polymetallic and uranium projects with large resources in
Europe and Africa. The company has rapidly grown by acquiring new
projects in areas with known polymetallic and uranium occurrences
including Sweden and greenfield projects in Mauritania
The Company is now focused on the Tiris Uranium Project, a major
greenfields uranium discovery in Mauritania, with 49 Mlb U (3) 0
(8) in current resources from 66 million tonnes @ 334 ppm U (3) 0
(8) .
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 as it forms part of
UK domestic law by virtue of the European Union (Withdrawal) Act
2018 ('MAR'). Upon the publication of this announcement via
Regulatory Information Service ('RIS'), this inside information is
now considered to be in the public domain.
Notes to Project Description
The Company confirms that the material assumptions underpinning
the Tiris Uranium Production Target and the associated financial
information derived from the Tiris production target as outlined in
the Aura Energy release dated 18 August 2021 for the Tiris Uranium
Project Definitive Feasibility Study continue to apply and have not
materially changed.
The Tiris Uranium Project Resource was released on 27 August
2021 "Resource Upgrade of 10% - Tiris Uranium Project". The Company
confirms that it is not aware of any new information or data that
materially affects the information included in the relevant market
announcement and that all material assumptions and technical
parameters underpinning the estimates in the relevant market
announcements continue to apply and have not materially
changed.
In respect to Resource statements there is a low level of
geological confidence associated with inferred mineral resource and
there is no certainty that further exploration work will result in
the determination of indicated measured resource or that the
production target will be realised.
Disclaimer Regarding Forward Looking Statements
This ASX announcement (Announcement) contains various
forward-looking statements. All statements other than statements of
historical fact are forward-looking statements. Forward-looking
statements are inherently subject to uncertainties in that they may
be affected by a variety of known and unknown risks, variables and
factors which could cause actual values or results, performance or
achievements to differ materially from the expectations described
in such forward-looking statements. The Company does not give any
assurance that the anticipated results, performance or achievements
expressed or implied in those forward-looking statements will be
achieved.
[1] Released 27 August 2021
[2] Uranium emerges from the shadows, https://www.resourcesrisingstars.com.au/news-article/uranium-emerges-shadows , published 29 January 2021
[3] Released 29 January 2019
[4] Energy, Electricity and Nuclear Power Estimates for the
Period up to 2050, International Atomic Energy Agency (2020
edition),
https://www-pub.iaea.org/MTCD/Publications/PDF/RDS-1-40_web.pdf
[5] Released 18 August 2021
[6] World nuclear energy forecast: 615 GW capacity by 2040 , https://www.power-eng.com/nuclear/world-nuclear-energy-forecast-615-gw-capacity-by-2040/#gref , published 13 September 2021
[7] Released 29 January 2019
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END
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