Aura Energy : Quarterly Report September 2017 and Appendix 5B.pdf

SEPTEMBER QUARTERLY REPORT 31st October 2017

• Tiris operating costs reduced by 35% to US $19.40/lb U₃O₈

• Tiris Environmental and Social Impact Assessment (ESIA) approved by the

  Mauritanian Government - Key Project Milestone

• Strong engineering progress on the Definitive Feasibility Study (DFS)

• Tiris Project Water Study continued

• Tiris Resource upgrade drilling program continues

  TASIAST SOUTH GOLD PROJECT (Mauritania)

• Aura awaits granting of gold and base metal tenements to commence exploration in this very promising field

  HÄGGÅN POLYMETALLIC ROJECT (Sweden)

• Häggån Polymetallic review highlights 'Battery Metals' potential

• Significant vanadium content now a key area of evaluation

• Review has highlighted need to optimise significant quantities of cobalt, vanadium, uranium, molybdenum, nickel, zinc and neodymium

QUARTERLY OVERVIEW

Aura's work during the quarter supported the broad scope the company maintains across its projects and believes strategically this is the best approach to maximise the many metals and opportunities these projects present.

The Tiris Uranium Project continues to present as Aura's best near-term prospect for project cashflow despite the lagging uranium price. Aura has worked to reduce the operating costs within the DFS which places Tiris' C1 cash cost below both spot and long-term contract prices.

For prudent diversification, Aura has pressed forward with its gold and base metals projects in Mauritania and while the tenement granting process has been slow, affecting the start of work, the company believes these to be exceptional prospects.

With respect to Häggån, the 'Battery Metal' sector has recently been born and Häggån's key attributes of contributing strongly to the energy sector, including renewables and battery's is now a key focus. This sudden development within the battery sector and Häggån's significant vanadium content now place these additional aspects of the project in prime focus.

During the September quarter, Aura pressed further with the Tiris Definitive Feasibility Study (DFS) with the main points being;

• Tiris operating costs reduced by 35% to US$19.40/lb U₃O₈

• Environmental and Social Impact Assessment (ESIA) approved by the

  Mauritanian Government

• Strong progress on the engineering aspects of the project

• Water drilling continued but encountered difficult drilling conditions

• First phase of resource upgrade work - aircore drilling with downhole logging nearing completion

  The achievement of the Environmental and Social Impact Assessment (ESIA) approval was a key project milestone as the company maintains this is the key approval required for a uranium project.

  With the extensive early engineering underway, the Tiris Project development momentum remains good. As the Tiris Mining Lease application was submitted in late May, the granting of the Mining Lease could be achieved shortly.

  Aura remains positive on its significant Tasiast South gold and base metal prospects, and awaits granting of the permits to commence field activities immediately following the grant.

  Häggån Polymetallic Project in Sweden has become a new focus given the increasing demand and pricing for the Battery Metals that is emerging. Häggån has always had a

  good focus on its base metal content but the expansion to include Battery Metals is expected over time to enhance the project economics.

  Häggån contains very substantial quantities of cobalt, vanadium, copper uranium, molybdenum, nickel, zinc and neodymium. The reassessment highlights the work required in the project's early development stages and the company will assess funding via metal-streaming transactions.

  TIRIS PROJECT, MAURITANIA (AURA 100%) Tiris Project Overview

  Aura is conducting a Feasibility Study on its 100% owned 49-million-pound U₃O₈ calcrete uranium project in Mauritania (See Figure 1). The project has low operating

  costs and low development capital with strong financial returns under long-term pricing scenarios.

  Figure 1: Location of Aura's Tiris Project Uranium Resources Tiris Project Definitive Feasibility Study

  During the quarter, Aura was granted environmental approval for the Tiris Project with the approval by the Mauritanian Government of the Environmental and Social Impact Assessment (ESIA). Aura's maintains this is the key approval for any uranium project and thus a key project milestone achievement.

  Another important part of the work during the quarter was the reduction of the

  operating cost to US$19.40/lb U₃O₈ via optimisation of reagent usage. This adjustment as a result of study work within the DFS positions Tiris well versus the current spot and

  contract prices.

  Geology and Resource Upgrade Program

  Field activities aimed at upgrading additional resources to Indicated/Measured status were active for most of the quarter.

  These have involved:

  • Diamond drilling: 59 vertical triple tube PQ drillholes

  • Air-core drilling: approx. 7,500 metres of vertical drilling in 1200 holes

  • Down-hole radiometric logging of all drill holes

  • Detailed geological mapping of the ore zones

The diamond drilling objective was to provide sample for chemical analysis to serve to validate grade estimation by downhole radiometric logging, to allow density determinations throughout the ore zones and additionally to provide material for further metallurgical testwork. In order to obtain good quality samples large diameter PQ

triple-tube core was drilled and transported from site to Nouakchott for processing. There the core was geologically logged, density determinations taken, cut and sampled for assay.

Results of this work have indicated that uranium grades determined by downhole gamma logging correlate well with chemically assayed grades of the same drill hole.

A drilling program to test 12 water targets identified by ground resistivity surveying conducted by Aura earlier in the year commenced during the quarter. Progress has been slower than anticipated and results have been obtained so far on only one target, where water flow of 1.7 m3 per hour was reported.

Level 1 34-36 Punt Rd Windsor VIC 3181 Tel: +61 3 9516 6500 Email: info@auraenergy.com.au Website: www.auraenergy.com.au

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