Aurora sells uranium project to US company

Australia’s Aurora Energy Metals is shifting its focus to a local jurisdiction with an option agreement to put its namesake project in Oregon into a US domiciled company, while broadening its asset portfolio in Western Australia.

The company on Tuesday announced it had granted US company Eagle Energy Metals, led by Mark Mukhij, an option to acquire its Aurora uranium project.

The agreement is conditional on Eagle successfully listing on a US stock exchange and completing an associated capital raising of at least $6.8-million.

Eagle will make an initial payment to Aurora of $300 000 for an initial six-month option. Upon completing a US listing, Aurora will receive shares in Eagle to the value of $16-million.

If exercised, the option will allow the project to gain exposure to US capital markets and potentially attract a higher valuation, as well as various financial incentives for its development.

Selling the project to a US-domiciled company will also ensure its development will be led by a local team with knowledge of the regulatory environment, permitting process and local funding channels.

Aurora will maintain a substantial 40% shareholding in the US entity.

“The company has been seeking to transition the management of the Aurora uranium project to a US-based team with strong mining and uranium experience. We believe this will progress development more effectively and maximise value, not the least of which will be through maintaining upside exposure to the AUP for our shareholders through a significant interest in the US-listed entity,” said Aurora chairperson Peter Lester.

“Eagle Energy Metals’ interest in the project brings that domestic experience and capacity to advance the project and further derisk its future development. It follows that quality uranium projects in the US will invariably attract a higher valuation if being developed locally and with the support of domestic investors through a US listing,” he stated.

The Aurora project is said to be the largest mineable, measured and indicated uranium deposit in the US, with 107.3-million tonnes at 214 parts per million uranium oxide for 50.6-million pounds of uranium.

Meanwhile, Aurora has secured an option to acquire 100% of Metalbelt Holdings, the holder of a portfolio of exploration tenements in Western Australia.

The option fee for the transaction is $50 000 and will be paid from the company’s existing cash reserves.  

“Whilst we maintain significant exposure to upside in the Aurora project through the announced Eagle Energy Metals option, the opportunity to test some highly prospective uranium targets in our local jurisdiction presented as a low-cost, low-risk strategy that broadens our portfolio,” said Lester.

“The Metalbelt projects have a very clear pathway for technical evaluation and excellent exploration potential. There is a growing local understanding of the technology to develop palaeochannel uranium systems and they can offer good economic returns for low capital and very low environmental impact,” he added.

Commenting on the current uranium mining ban in Western Australia, Lester said Aurora believed the growing momentum for uranium worldwide, along with heightened discussions around the mining of uranium, not just in Western Australia but nationally, could ultimately lead to a shift in sentiment or policy in Western Australia.

“In the meantime, we have the knowledge, relationships and access to thoroughly assess the Metalbelt licences and applications through a considered exploration programme, while the AUP continues to be progressed by Eagle Energy Metals in North America.”