ASX-listed Aura Energy has undertaken an assessment of the opportunities for future capacity expansion at the flagship Tiris uranium project, in Mauritania, demonstrating the significant internal growth opportunity at the project through a future expansion of the project from Stage 1 cash flows, improving confidence in the inferred mineral resources and regarding further exploration success, MD and CEO Andrew Grove says.

The assessment used inputs from the September production target update and the recently expanded 91.3-million-pound triuranium octoxide (U₃O₈) mineral resource.

Alternative production targets have been based on an analysis of opportunities to accelerate production in year three of operation, without any other material changes to the underlying assumptions or levels of confidence – not replacing the base case, but rather, demonstrating optionality for the Tiris project once in operation.

Options have been analysed to expand the production capacity, starting in the third year of operations, from the initial development plan of a 4.1-million-tonne-a-year mine rate producing about two-million pounds of U₃O₈, by accelerating the mining rate and increasing production capacity.

Production scenarios have been assessed for mining rates of 6.25-million tonnes a year, producing about three-million pounds a year of U₃O₈; and 8.2-million tonnes a year, producing about four-million pounds a year of U₃O₈.

The first option returned the highest net present value (NPV) and improved economics.

Results included an NPV of about $544-million (A$836-million) - an increase of 9% on the base case.

It also showed an internal rate of return of about 45% post-tax and payback in the order of 2.5 years.

Moreover, it indicates high margin average yearly post-tax cash flows over the life-of-mine of about $86-million, an increase of 37% and average of about $116-million over the first five years of operations.

Additional development capital is fundable from cashflow.

“The initial near-term Tiris uranium project development will be the start of the value creation from the project. Aura has excellent internal growth opportunities beyond the initial planned Tiris uranium project development, providing exceptional leverage as uranium demand is forecast to grow on the back of committed development of reactors coming on stream,” Grove highlights.

Aura also entered a trading halt on December 13, pending an announcement regarding a capital raising.