ASX/AIM-listed Aura Energy has signed a binding off-take agreement with London-based nuclear fuel trading company Curzon Uranium Trading for the sale of its uranium production from the Tiris uranium project in Mauritania.
Mauritania – The agreement with Curzon covers the sale of 800 000 pounds of uranium production at fixed prices with a further 1.8 million pounds production available to Curzon as option volumes at fixed and market pricing.
The agreement is over a seven-year period starting from the commencement of the mine and extendable thereafter by mutual consent.
The average price of the agreement is above US$44/pound U₃O₈ compared with the current spot price of around US$29/pound U₃O₈ and comfortably above Tiris' total operating cost.
With Tiris' anticipated production is approximately 1 million pounds U₃O₈ per annum and importantly the fixed pricing volumes of this agreement account for between 15 to 30% of production. This will ensure Aura Energy remains strongly exposed to the potentially higher uranium prices Aura expects in the future. Aura has also included the ability to claw back certain option volumes at its election should the price warrant this action.
“The completion of this agreement comes after many months of negotiation and clearly pushes Aura ever more closely to producer status. This agreement provides Aura with a strong level of certainty over the revenue stream from the fixed prices and excellent upside via the option volumes at market prices. With the price exceeding $44/pound for this agreement Aura believes this is both constructive and prudent for a company such as Aura early in its development phase.
‘With the DFS nearing completion and initial construction anticipated this year, the milestone that this agreement represents is undoubtedly significant. Also significant is the fact that the parties have come to an agreement in which retains its exposure the any upside the uranium price offers Aura over the life of the Tiris project,” says Aura Energy executive chairman Peter Reeve.
Aura Energy is developing its calcrete uranium project in Mauritania and is currently completing a definitive feasibility study (DFS) on the project. The Tiris project is driven by low operating and development capital costs and is expected to commence construction shortly for an anticipated 2020 production start.
Aura Energy was recently granted an exploitation licence by the Mauritanian government to advance the Tiris project.