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Aura ASX: AEE Häggån’s C1 cash cost is estimated at *$13.50 per pound U3O8.

August 6th, 2013

HÄGGÅN – A GLOBALLY SIGNIFICANT AND STRATEGIC URANIUM DEPOSIT
REGUIBAT HAS THE POTENTIAL TO EMERGE AS AN EARLY CASHFLOW PROJECT
LOW COST PROJECTS ARE THE ONLY VIABLE OPTION FOR THE CURRENT URANIUM MARKET
Following the recent Board changes Aura Energy Ltd (ASX: AEE) has reviewed the company strategy with a key focus on improving the recognition and value of its globally significant uranium projects, and creating steps to shorten the development timeframe for these projects.

Under the direction of Managing Director Bob Beeson and his geological team, outstanding success has been achieved with the discovery of both the Häggån and Reguibat uranium projects. Today Häggån is ranked as the second largest undeveloped uranium deposit in the world.

Faced with the challenge of Häggån’s lower than average grade, Aura’s metallurgical consultants – lead by Director Jules Perkins, previously Chairman of the Parker Cooperative Research Centre for Hydrometallurgy – has managed to successfully create a key processing breakthrough for the deposit in the form of bioleaching. The significance of this breakthrough and the fact that it potentially positions Häggån at, or close, to the bottom of the uranium cost curve, cannot be underestimated.

Häggån’s C1 cash cost is estimated at *$13.50 per pound U3O8.

The Aura Board maintains that the Häggån project is an extremely robust project and largely immune to the current low uranium price. This makes the large Häggån uranium resource a unique deposit of long term strategic importance to Sweden and the European Union.

It is the intention of Aura Energy’s Management and Board to work assiduously over the comingThe Strategic Review concluded that the bioleach testwork for Häggån is sufficient for the current level of study to confirm the exceptionally low Scoping Study operating cost. Bioleaching is the most efficient process for the deposit, and the leaching operating cost is the most important element of the Häggån cost structure. As such this work has provided the Aura Board with a strong degree of confidence in the overall Scoping Study C1 cash cost.

In the current uranium market the Aura Board believes the only viable strategy for the development of uranium projects is to focus on those projects with the lowest operating cost. (Häggån’s C1 cash cost is estimated at *$13.50 per pound U3O8.)

The uranium sector has a range of projects which at this stage appear viable only at significantly higher uranium prices. The Scoping Study conclusions suggest that Häggån as such is unique as the combination of its large size and low operating costs, strengthening its claim for development.

Aura’s key strengths:

Häggån as the second largest undeveloped uranium deposit in the world, and

Häggån’s low operating cost positioning Aura as potentially the world’s lowest cost uranium producer.

The other key points from the strategic discussions were;
 The Board reaffirmed the significance of the Häggån Project in terms of it potentially being one of the highest margin projects in the world. The Häggån Project remains Aura’s top priority.
 An opportunity exists for Reguibat to produce early technical and development results and hence early cash flow, dependent on funding. The management team will pursue opportunities to evaluate these options.
 The Board recognises that the strong attributes of Aura, particularly Häggån, are not recognised broadly in both the equity market generally, particularly offshore, or with large corporates in the energy sector.
 Aura is developing a programme to correct the company’s perceived lack of market and corporate awareness.
 The nature of the Häggån Project – large resource, flat-lying, low strip ratio, bio heap leach processing, creates options for development at a number of scales. The management team will review the project scale with an initial concept of 3-5 million tonnes per annum to assess the potential benefits of this lower capital cost approach for early development.
 Sweden is a mining friendly country which derives 50% of its electricity from nuclear power. However, Häggån’s significance is not widely recognised within Sweden and this will be corrected with additional in-country work. More dedicated work in the local community will also be undertaken.
 Reguibat is flat-lying resource at surface, with the potential for beneficiation upgrading; different scale start-ups will be considered to examine early development options.
 In all projects significant exploration upside exists, providing scope for ongoing resource expansion and/or discovery success