(Ecofin Agency) - Spurred by the recent rise in uranium prices and long-term demand for the ore, mining firms are accelerating their projects worldwide. In January, the price of uranium passed $100, amidst concerns about supply in the medium term.

Aura Energy now expects $2.25 billion in revenues from its Tiris uranium mine in Mauritania. The company disclosed the figure in a FEED study released on February 28. It is 44% more than the amount forecast in the optimized feasibility study issued in March 2023.

The team at Aura have produced an Investor Update outlining the strong outcomes of the Tiris FEED study.
Stay tuned for an opportunity to hear from MD, Andrew Grove.https://t.co/78mZRv98ch #cleanenergy #uranium #development #Mauritania $AEE pic.twitter.com/aig59JB8px

— Aura Energy Limited (@aee_auraenergy) February 28, 2024

The FEED was based on a higher uranium benchmark price of $80 per pound, compared with $65 last March, against a backdrop of rising metal prices

The price of uranium passed $100 per pound in January 2024, a record not achieved since 2007. Observers attribute the surge to the growing interest in nuclear power globally. Global nuclear energy capacity could triple by 2050, according to recent forecasts.  Concerns over supply constraints also contributed to the increase. Among others, Kazatomprom, the world's top uranium producer, announced it would not meet its production targets for 2024 and 2025.

The increase should persist in the medium term, according to observers. Shaw and Partners, an Australian company, foresees uranium peaking at $150 per pound between 2025 and 2027. The outlook was enough motivation for producers like Aura Energy to pick up the pace on their various projects. Aura Energy, for instance, wants to close sales deals for future production and make investment decisions regarding its Tiris project this year.

Beyond price improvements, increased production forecasts have also contributed to heightened revenue expectations at Tiris. Initially projected to yield 1.6 million pounds of uranium annually over 16 years, Aura now anticipates an annual production of 1.9 million pounds over 17 years, resulting in a total output of 30.1 million pounds. Consequently, the initial capital requirement has risen by 29% to $230 million, with a reduced payback period of 2.5 years compared to the previously estimated 4.5 years. Furthermore, the net present value has increased from $226 million to $366 million, with an internal rate of return of 34%.

Iron and gold are Mauritania’s most exported ores. The country could, however, diversify its revenue sources with the emergence of uranium mining at Tiris. This could mitigate its exposure to fluctuations in gold and iron prices. Aura controls 85% of the Tiris project, with the remaining 15% held by Nouakchott.

Emiliano Tossou