Aurora Energy Metals (ASX:1AE) has decided to sell its namesake uranium project in the US and replace it with several granted exploration licences and applications prospective for uranium in Western Australia.
The company has entered into an option agreement to acquire privately held Metalbelt Holdings, which is the owner of the Ucarty, Bulagin, Kondinin, Lake Harvey, Harris Lake, and Mudjalla projects.
Ucarty, Bulagin, and Kondinin all lie within the Western Australian wheatbelt and are associated with interpreted tertiary palaeochannels which are host to numerous uranium deposits within the Yilgarn block.
Lake Harvey sits on the northern wheatbelt margins and shows a uranium radiometric anomaly along a lake margin, potentially linked to a palaeochannel system. Meanwhile, Harris Lake lies on the southeastern Yilgarn margin and features a uranium radiometric anomaly.
Mudjalla is positioned on the southern Fitzroy Trough margin and shows uranium responses in airborne radiometric surveys over an area of outcropping sandstones.
Aurora, which has a market capitalisation of $7.7 million, will pay a $50,000 option fee from existing cash reserves.
Chairman Peter Lester says the Metalbelt projects have a clear pathway for technical evaluation and exploration potential.
“There is a growing local understanding of the technology to develop paleochannel uranium systems and they can offer good economic returns for low capital and very low environmental impact,” Lester says.
“As a company we are cognisant of the current uranium mining ban in Western Australia, however, we recognise the growing momentum for uranium worldwide, along with heightened discussions around the mining of uranium, not just in Western Australia but nationally.
“This momentum, we believe, could ultimately lead to a shift in sentiment or policy in Western Australia.”
In parallel, Aurora has also entered into an option agreement with Eagle Energy Metals Corp, which is seeking to list on a US stock exchange, for the sale of the Aurora Uranium Project.
Under the agreement, Aurora will receive an initial US$16 million ($24.59 million) worth of shares in Eagle Energy upon completion of the proposed listing on a US stock exchange.
Eagle Energy will also pay an initial US$300,000 in cash for a six-month option period and issue up to a further US$10 million worth of shares to Aurora in stages once various milestones are met.
Aurora Energy plans to use the funds received to complete the latest metallurgical testwork aimed at increasing recovery for its namesake project and to advance its strategy to broaden exposure to uranium assets in Australia.
If Eagle Energy reports a measured or indicated resource estimate for the project of at least 40 million pounds of uranium, Aurora will receive US$4 million worth of shares, plus US$200,000 for every 1 million pounds in excess.
Eagle Energy will also issue US$5 million worth of shares to Aurora upon completion ofa positive Prefeasibility Study. At the same time, Aurora will retain a 1% net smelter royalty with the right for Eagle to buy back one-half of the royalty for US$1 million.
Lester says that the company has been seeking to transition its management of the Aurora Project to a US-based team.
“We believe this will progress development more effectively and maximise value,” he says.
Eagle Energy CEO Mark Mukhija says the option to acquire the project represents a pivotal step in advancing the growing demand for clean, reliable energy in the US.
“This agreement strengthens our position in the US market and aligns with our commitment to secure strategic domestic energy assets,” Mukhija says.
Aurora Energy is planning to develop and execute a work program for the Metalbelt exploration licences and applications over the option period. The work program will include technical and commercial evaluations to inform a decision on whether to exercise the option.
Initial work will focus on landholder engagement and surface inspections with portable spectrometers.
Subject to initial sampling and securing access, any areas of interest will be followed up with drilling and geophysical methods to define the extent and geometry of any mineralisation and host channels.
Aurora Energy Metals is a critical minerals-focused explorer and developer. The company is focused on its uranium assets in Australia.
Eagle Energy Metals is a privately held growth-focused explorer and developer focused on clean energy metals in the US.
Write to Aaliyah Rogan at Mining.com.au
Images: Aurora Energy Metals
