PERTH (miningweekly.com) – Uranium developer Aura Energy has struck an offtake agreement for 800 000 lb of uranium oxide (U3O8) from its Tiris uranium project, in Mauritania.
The agreement with Curzon Uranium Trading will run for a period of seven years, at fixed prices, from the start of production and extendable thereafter, by mutual consent.
A further 1.8-million pounds of uranium production will also be made available to Curzon as option volumes at fixed and market pricing.
Aura told shareholders on Tuesday that the average price of the agreement is above $44/lb U3O8, compared with the current spot price of around $29/lb U3O8, and was comfortably above Tiris’ total operating costs.
“The completion of this agreement comes after many months of negotiations and clearly positions Aura closer to production status,” said Aura executive chairperson Peter Reeve.
“This agreement provides Aura with a strong level of certainty over the revenue stream from the fixed prices and excellent upside via option volumes at market prices. With the price on average exceeding $44/lb for this agreement, Aura believes this is both constructive and prudent for a company such as Aura early in its development phase.”
Aura is currently undertaking a definitive feasibility study for the Tiris project, which is nearing completion, with initial construction expected to start this year. The project is expected to be in production by 2020, at an anticipated production rate of some one-million pounds a year of U3O8.