Aura Energy Ltd (ASX:AEE, AIM:AURA) has again received a ‘speculative buy’ recommendation, with a price target of $0.36 per share from equity research firm, PAC Partners.
The analyst highlighted the company’s revised definitive feasibility study (DFS), which points to a robust, near-term project with a low initial capex, a key driver for the recommendation.
Aura’s shares are currently trading at $0.17 with a market cap of approximately $97.04 million.
Key drivers
In a report, the analyst says the key drivers for the recommendation are:
AEE’s revised DFS points to a robust, near-term project with a low initial capex of US$87.9 million. A FEED study when complete by DecQ23 will enable AEE to make a Final Investment Decision this year and start construction with uranium sales by JunQ25.
Tiris is rare as it’s a largely permitted greenfield project that can participate in what we expect is a coming uranium upswing in demand and pricing.
Further offtake agreements in 2023 can both strengthen project credentials and access additional funding.
We anticipate that AEE will revise a study to develop its Tier 1 Häggån Project in Sweden once its new government reverses the uranium mining ban.
With 2.5 billion tonnes of ore potential, a huge project with uranium, vanadium, nickel, molybdenum, zinc and a by-product potash, Häggån could be a transformative project.
Investment view
Aura’s updated DFS confirms Tiris remains a low operating and capital cost project in spite of recent inflation and scope changes.
The analyst sees project upside at Tiris East with more resources to reserves conversion to extend life beyond 16 years.
Tiris West’s inferred resource of 11 million pounds at 305 ppm uranium is 36% higher in grade than Tiris East and a potential expansion case, that is examined in the report.
Aura will do delineation work here in 2023.
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