28 January 2022

Quarterly Report for the Period Ending 31 December 2021

KEY POINTS

·    Strategic transformational board restructure in preparation for production at the low capex, low operating cost Tiris Uranium Project ("Tiris" and the "Project").

·    US$10m Offtake Financing Agreement with Curzon in October 2021, with up to US$20m available and funds to be used for mining working capital and commencement of production, complementing the Uranium Offtake Agreement executed with Curzon in January 2019.

·    Peter Reeve transitioned to Managing Director & CEO of Aura's gold subsidiary, Archaean Greenstone Gold, and focuses on advancing the highly prospective Tasiast South Gold Project, just 30km south of Kinross' 20Moz Tasiast South Gold Mine.

·    Completion and successful results from the water drilling program, with strong flows encountered at the Tiris Uranium Project, reconfirming results from the 2019 water drilling program.

·    Loyalty Options Entitlement Offer with strong support from eligible shareholders who applied for 68,029,541 new Loyalty Options, raising approximately $1,020,443.

AFTER BALANCE SHEET DATE EVENTS

·    In January 2022, Dr Will Goodall was appointed as acting CEO to continue to drive Aura towards expanding the Tiris Uranium resource, with Company having commenced the recruitment process to appoint a Managing Director & CEO with significant production experience.

Aura Energy Limited (ASX:AEE, AIM:AURA) ("Aura", the "Company") is pleased to provide an overview of activities for the period ending 31 December 2021 ("Quarter, "Reporting Period") to accompany the Appendix 5B.

To view the Appendix 5B please click here:
http://www.rns-pdf.londonstockexchange.com/rns/9635Z_1-2022-1-28.pdf

Commenting on the Quarter acting CEO, Will Goodall, said: "The December 2021 Quarter was an important period as Aura underwent a strategic Board restructure to position the company for transition to uranium producer.  This was an important step in preparation for production at the low capex, low operating cost Tiris Uranium Project. During the quarter the uranium market maintained the strong gains from the September quarter, supporting the high growth demand for nuclear power and carbon free energy."

"The Company continues to prepare to finance the Tiris Project entering into a US$10m Offtake Financing Agreement with Curzon in October 2021, with up to US$20m available under the facility, Funds from this agreement are to be used for mining working capital and commencement of production.  This complements the Uranium Offtake Agreement executed with Curzon in January 2019 and Aura will continue to pursue further offtake financing agreements and pursue debt and equity finance to complete the financing of Tiris to bring it into production."

"As part of the strategic Board restructure, Peter Reeve transitioned to Managing Director & CEO of Aura's gold subsidiary, Archaean Greenstone Gold, and is now focused on advancing the highly prospective Tasiast South Gold Project, just 30km south of Kinross' 20Moz Tasiast South Gold Mine.  The Company aims to commence exploration at this project in 2022, and thereby create further value for Aura shareholders.  The Company would like to sincerely thank Peter for his contributions in setting the groundwork for Aura and the Tiris project to be in the strong position it is to capitalise on the rising uranium market"

"During the Quarter, Aura also completed and announced successful results from the water drilling program, with strong flows encountered at the Tiris Uranium Project, reconfirming results from the 2019 water drilling program. With sufficient water located in the Oued el Foule Depression at the Project.  This is a major milestone for progression of Tiris, confirming assumptions from the DFS. Production can be expedited with capital expenditure and operating costs also likely to remain low in comparison to peer uranium projects."

"Further capital was raised during the Quarter through the Loyalty Options Entitlement Offer that was strongly supported by eligible shareholders who applied for 68,029,541 new Loyalty Options, raising approximately $1,020,443."

"In January 2022, I was appointed as acting CEO to continue to drive towards expanding the Tiris uranium resource and preparing the Company for uranium production and expansion of resources at Tiris in Mauritania.  Having worked with the Company for over a decade and bringing an intimate knowledge of the Project I look forward to leading the Company through one of the most exciting phases in our history."

"We look forward to an exciting 2022 for Aura, as we expand our resources and rapidly bring the project into production."

Strategic Board Restructure

With Aura preparing for production at the low capex, low operating cost Tiris Uranium Project ("Tiris", "Project"), the Company underwent strategic changes to focus on uranium, and the high growth demand for nuclear power and carbon free energy (ASX & AIM release 22 November 2021).

The strategic changes introduced three new board members; Mr. Phil Mitchell as independent Chairman, and Mr Warren Mundine and Mr. Bryan Dixon as independent non executive directors. Mr. Martin Rogers and Mr Peter Ward stepped down from the Board with Mr. Peter Reeve transitioning to Managing Director & CEO of Aura's gold subsidiary, Archean Greenstone Gold, and now focused on advancing the highly prospective Tasiast South Gold Project, just 30km south of Kinross' 20Moz Tasiast South Gold Mine.

Non-Executive Chairman, Phil Mitchell, contributes significant experience in mining M&A having held former roles as Head of Business Development and Strategy at Rio Tinto, CFO of Rio Tinto Iron Ore, member of the Executive Committee at Anglo American, and also headed acquisitions for billionaire Robert Friedland's company, High Power Exploration.

Non-Executive Director, Warren Mundine, is one of Australia's prominent independent thinkers and a thought leader in the mining sector and nuclear power space. Mr Mundine has worked on numerous major resource projects for leading companies including Fortescue Metals Group, Rio Tinto, BHP and AGL Pipelines & Engineering Waanyi Downer Joint Venture.

Non-Executive Director, Bryan Dixon, contributes significant experience to the resource sector, as a Chartered Accountant building junior exploration companies into mining producers with over 20 years in the mining sector. He also holds extensive experience in the management of public and listed companies, and joint winner of the Mines and Money Asia-Pacific Mining Executive of the Year in 2017.

The newly appointed board will play a pivotal role in further expanding the Tiris uranium resource and rapidly bringing the project into production.

Offtake Financing Agreement with Curzon

Aura entered a US$10m Offtake Financing Agreement with Curzon in October 2021, with the funds to be used for mining working capital and production commencement (ASX & AIM release 7 October 2021).  The agreement includes an additional up to US$10m facility at the lender's sole discretion. The potential maximum available under the Agreement is US$20m.

The Agreement complements the Uranium Offtake Agreement executed with Curzon in January 2019[1], for the sale of 800,000 pounds or uranium production at fixed prices, 750,000 pounds at market linked pricing, and a further 1.05 million pounds of uranium production available to Curzon as optional volumes at fixed and market pricing, with the average price above US$44 per pound U₃O₈. The January 2019 agreement is over a seven-year period starting from the commencement of production.

With the original production at approximately 1 million pounds of U₃O₈ pa, the fixed pricing volumes of the original 2019 offtake agreement account 150,000 pounds of U₃O₈ pa.

Over the coming periods, the Company will prepare financing options to move the Project into construction.

Substantial Water Reconfirmed at Tiris

On the 13th December 2021 Aura announced the completion and successful results from the Company's 2021 water drilling program, with strong flows encountered at the Tiris Uranium Project. This reconfirmed results from the 2019 water drilling program undertaken by Aura (ASX & AIM Release - 25 September 2019).

Aura completed 8 boreholes for the 2021 water drilling program, 7 of which are at Target C22, with all producing strong water flows, including several with high yields. With sufficient water located in the Oued el Foule Depression at the Project, production can be expedited with capital expenditure and operating costs likely to remain low in comparison to peer uranium projects.

The Project has an initial water requirement of approximately 0.5 giga-litres. Based on the spacing of water bearing drillholes to date, the C22 water occurrence is estimated to contain several giga-litres of water, and possibly significantly more, without allowing for recharge. The C22 water field is therefore likely to supply the water requirements of the Project, with long term pump testing, drawdown and recharge observations in progress to confirm this.

To view Image 1 - Water Drilling at the Tiris Uranium Project, please click here:
http://www.rns-pdf.londonstockexchange.com/rns/9635Z_2-2022-1-28.pdf

Loyalty Options Entitlement Offer

The Loyalty Options Entitlement Offer announced on 19 October 2021 closed on 8 November 2021, with strong support from eligible shareholders, who applied for 68,029,541 new Loyalty Options, raising approximately $1,020,443 (before costs), pursuant to their entitlements (ASX & AIM release 11 November 2021). This represented 73% participation of entitlements by eligible shareholders.

The Offer shortfall of 67,329,768 Loyalty Options was placed with existing long-term shareholders by the underwriter, KTM Capital, following intense interest by shareholders. The funds raised through the Offer will be used for exploration, mining working capital and production commencement.

Dr Will Goodall Appointed as Acting CEO of Aura Energy

On 13 January 2022, Aura appointed Dr Will Goodall as acting CEO to rapidly build momentum towards expansion of the Tiris Resource and preparation for uranium production (ASX & AIM release 13 January 2022).     

Dr Goodall has worked with Aura for over 10 years, has held the role of Aura's Principal Metallurgist since 2018, and was responsible for delivering the Tiris Uranium Scoping and Definitive Feasibility Studies, and the Häggån Uranium Scoping Study.  

Dr Goodall contributes over 20 years of experience in geometallurgy, mineral processing and hydrometallurgy across a wide range of commodities, contributing a strong mix of technical expertise and corporate experience.

Further to the Strategic Board Restructure announcement on 22 November 2021, the Company has commenced the recruitment process to appoint a Managing Director & CEO with significant production experience.