PERTH (miningweekly.com) – An updated capital cost estimate for the Tiris uranium project, in Mauritania, has increased the projected cost by 10.4%.

ASX- and Aim-listed Aura Energy on Wednesday reported that the project was expected to require a capital investment of $74.8-million, compared with the $62.9-million estimated in the 2019 definitive feasibility study (DFS).

The company told shareholders that since completion of the DFS in 2019, global economic conditions have changed, with increases in steel, freight and other project development costs driven by the Covid-9 pandemic.  As a result, Aura has updated the capital costs for the DFS to ensure that in the two years since completion, the input costs remain valid.

“We are pleased to have updated the capital costs for the zero emission Tiris uranium project, as we fast-track to production. Importantly, despite significant changes in global economic conditions, the updated capital cost remains within the accuracy and sensitivity boundaries of the 2019 DFS estimate,” said MD and CEO Peter Reeve.

“Aura now has the most current capital estimate in the market compared to its peers and we look forward to relisting on the ASX and advancing the project to near term production.”

The 2019 DFS estimated that the project could produce some 12.4-million pounds of uranium oxide (U₃O₈) over a 15-year period, at a C1 cash cost of $25.43/lb U₃O₈ and an all-in sustaining cost of $29.81/lb U₃O₈.

The updated capital cost study has placed the C1 costs at $25.43/lb U₃O₈ and the all-in sustaining cost at $29.81/lb U₃O₈, with production and life-of-mine parameters remaining unchanged.

The project’s after-tax cash flow has been estimated at $214-million, with the internal rate of return estimated at 22%.

“Tiris remains as a highly robust uranium project, which the company aims to capitalise on as the uranium market continues to recover.  With the DFS now updated with 2021 capital figures, Aura is well positioned to continue its discussions with global financiers in relation to both debt and equity funding arrangements. We now look forward to fast-tracking Tiris into production, as the world shifts towards a decarbonised energy system,” said Reeves.

“In the current uranium market environment, a key attribute of any uranium development project is the capital cost of development. Aura has strived through the entire DFS to maintain this cost at the lowest level possible whilst retaining a robust development design. With the $74.8-million capital defined, with 85% of the capital estimate from supplier quotes, Aura now stands among its peers as having one of the lowest, if not the lowest, all in life-of-mine capital of any of the currently proposed uranium development projects.

“A number of very good in-situ leach projects state low upfront capital, however, the 'repeat development capital' required in many of these projects in their early years needs to be considered as development capital. Aura in many instances competes very well with these projects.

“The capital figure is exceptionally important as in tough markets it can impact upon the investability of the project and Tiris' small footprint and low capital cost makes this project poised for quick development when financing can be achieved. Aura has spoken of the 'building blocks to cashflow' and the completion of the DFS sets another of those building blocks in place and puts Aura on a path for producer status and cashflow,” Reeves said.

He noted that the all-in sustaining cash cost of $29.81/lb U₃O₈ is "extremely competitive" when compared to uranium development peers.

“The benefits of shallow mining and the beneficiation stage in the process, which leads to a small project footprint, have shown to being positive for the projects operating cost,” he added.