Aura Energy (ASX:AEE) has announced an updated scoping study on its 100% owned Haggan Uranium project in Sweden. As the company thinks it won’t find the necessary financing for the previously planned 30Mtpa operation, the updated scoping study has taken lower throughput levels into consideration.
Aura could build a 3.5Mtpa plant for $150M, which would produce approximately 1M pounds of uranium at a cash cost of $21-25/lbs. A 7.5Mtpa plant would cost $250M and produce 2.1M lbs uranium at a cost of $18-21/lbs. Whilst a lower capex might look attractive at first sight, we fail to see the advantages of starting with a scenario using a lower throughput. We would still prefer the 30Mtpa scenario which would only cost 116% more than the 7.5Mtpa scenario, but would have a 271% higher output at a 40% lower cost. As such, we definitely aren’t exciting about these downscaled plans, unless Aura Energy proves the plant can be expanded easily by adding more processing modules.
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Disclosure: The author holds no position in Aura Energy. Please see our disclaimer for current positions.
