Uranium play Aura Energy has returned to the boards, timing its run to perfectly coincide with the upswing in sentiment around the commodity and its clean energy potential.
Recapitalised and returning from 16 months in the wilderness, dual-listed Aura’s (ASX:AEE) focus is the greenfield Tiris uranium project in Mauritania, where the company recently upgraded the JORC resource to 56 million pounds uranium oxide at a 100 parts per million U3O8 cut-off grade.
The company also updated its definitive feasibility study with 2021 numbers in August – moves which have been met on London’s AIM market with a 280% surge in value over the past month alone.
It appears the local market took notice too, with the company’s share price jumping almost 600% in early day ASX trade.
Speaking on today’s milestone, Aura Energy CEO and managing director Peter Reeve said it was a great time to be relisting with Tiris on the books.
“Momentous day for Aura as we relist on the ASX with a soaring uranium price!” he told Stockhead.
“The relist sets the stage for Aura to advance the low capex, low cash cost Tiris uranium project to development and we’re really looking forward to the months ahead.”
Reeve said in a release to market yesterday that plenty of work had been done to get the company and project to this point.
“Over the past months, Aura has undertaken and completed a number of project advancement initiatives on Tiris, well positioning the company for a strong 2022 financial year, as we fast track the Tiris Uranium Project to production,” he said.
The work won’t slow either. Aura expects to undertake an opportunity review to lower the forecast operating costs over the coming months and will also receive results from a net emissions study.
Vanadium assays are also expected, which Reeve said could result in further cost reductions.
There’s an Aura about AAE
The market has taken notice of what AAE’s top 20 shareholders have known for a while – that this is a story worth investing in.
AAE’s top 20 accounts for around 73% of its overall investor book and includes some high profile and famous names who are bullish on the company and its commodity space.
John Hancock is among them. While his family name may be more historically synonymous with iron ore, Hancock said the future looked bright for nuclear power.
“Having successfully invested in commodities driving a zero emissions future, I was drawn to Aura Energy’s Tiris uranium project as it presents a near-term development opportunity with considerable upside potential,” he said.
“Bill Gates recently financed TerraPower’s small modular nuclear reactor in Wyoming, with this safe technology holding the potential to be a game-changer for nuclear power generation as the modules can be factory built, shipped to site and installed side by side as energy needs grow.
“We’ve seen the uranium market take a turnover the past month and I look forward to uranium continuing to become a leading global source of zero emissions energy.”
High profile investor Peter Proksa is also on the list, and said the Aura narrative was compelling enough for him to make his first investment into the uranium space in 15 years.
“Aura Energy fits my investment criteria with significant upside potential with a project at an advanced stage of development,” he said.
“Aura’s Tiris Uranium Project has importantly advanced to DFS stage but also has a low capital cost to move towards production.
“I see significant upside considering the current market valuations for Aura’s peers who are at similar development stage but have higher capital costs and are at many multiples of Aura’s valuation.”
Proksa said any management issues were behind Aura, with the steady hand of Martin Rogers at the helm as chairman.
“Aura’s future looks bright, and it’s uranium’s time to take advantage of the search for a cleaner energy source,” he said.
“The EV revolution will, I feel, be a key factor in the need for uranium as an important energy source of the future.”
A member of Aura’s top 20 shareholder list who has more than a decade’s experience in uranium mining, Alexander Molyneux is another name that investors may recognise on the company’s books.
Molyneux’s past credits include founder and prior chairman of TSX-listed, CEO of Paladin Energy, and an advisory role to asset manager Eightstone Oclaner’s specialist uranium investment fund.
He’s backing the commodity’s recent run to go the distance.
“Uranium bottomed in 2018 and not only has the price been steadily rising since then but purchasing activity has been increasing too, which is the most important sign,” he said.
“The pandemic slowed the normalisation activity for uranium but it didn’t set it back. The industry is now poised for the next turning point where North American and European utilities, having nearly exhausted their discretionary inventory and contract positions, will need to rapidly accelerate their purchasing.
“Given the industry is already in a production deficit, we can expect a major breakout in uranium price.”
Molyneux said he decided to support Aura’s recent recapitalisation with a personal investment because it was uniquely placed in a uranium market on the upcycle.
“The key reason I like Aura Energy is the combination of the ‘ready to go’ nature and strong economics of its Tiris Uranium Project,” he said.
“In uranium, we actually have a lot of known resources compared to annual consumption and I believe the next up-cycle will move quickly once it moves to the next phase. Hence why in general I’m attracted to projects already at DFS stage that can provide quick production leverage.
“Tiris has not only passed the DFS milestone but it has a relatively modest capital requirement of A$107M, which should mean it can move quickly through the final financing stage into production.”
This article was developed in collaboration with Aura Energy, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
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