Aura Energy said Tuesday it had signed an off-take agreement with Curzon to sell its uranium production from the Tiris uranium project.
The agreement would span over a seven-year period starting from the commencement of the mine with option to extend by mutual consent. It covered the sale of 800,000 pounds of uranium production at fixed prices with a further 1.8m pounds production available to Curzon as option volumes at fixed and market pricing.
The average price of the agreement was above US$44 per pound of uranium compared with the current spot price of around US$29 per pound and comfortably above Tiris' total operating cost, Aura Energy said.
The Tiris Project was expected to commence construction shortly for an anticipated 2020 production start.
With Tiris expected to produce approximately 1m pounds Uranium a year, the fixed pricing volumes of the agreement would account for between 15 to 30% of production. This would ensure Aura Energy remained 'strongly' exposed to the potentially higher uranium prices Aura expects in the future, the company said.
'This agreement provides Aura with a strong level of certainty over the revenue stream from the fixed prices and excellent upside via the option volumes at market prices,' said Mr Peter Reeve, Aura's Executive Chairman.
'With the DFS nearing completion and initial construction anticipated this year, the milestone that this agreement represents is undoubtedly significant. Also significant is the fact that the parties have come to an agreement in which retains its exposure the any upside the uranium price offers Aura over the life of the Tiris Project.'
At 10:15am: (LON:AURA) Aura Energy Limited share price was +0.1p at 1.1p