Aura Energy's Häggån Scoping Study Shows Potential for Large-Scale Vanadium Mine in Sweden

About Aura Energy

Aura Energy is an Australian mining company focused on developing large-scale battery metal projects, including the Häggån vanadium project in Sweden and the Tiris uranium project in Mauritania. The company is listed on the Australian Securities Exchange (ASX) and London's AIM market. Aura Energy's strategy is to progress projects from exploration through feasibility and into production, capitalizing on the rapidly growing global demand for battery metals driven by the energy transition.

Häggån Scoping Study Highlights Potential for Large, Low-Cost Vanadium MineAura Energy recently announced the results of a scoping study for its Häggån battery metals project located in central Sweden. The study indicates Häggån could become a large, low-cost producer of vanadium pentoxide (V2O5) to supply the growing vanadium redox flow battery (VRFB) market.

Main Highlights for Investors:

• Large tonnage and low strip ratio: The scoping study is based on a small portion of the total mineral resource, yet already points to 59Mt of ore at a low 0.7:1 waste-to-ore strip ratio. Significant potential exists to expand production with more of the 2Bt mineral resource.
• Long mine life and scale: Initial mine life of 11 years processing 3.6Mtpa for 10,400tpa V2O5. Further expansion could extend well beyond this. Potential to be a globally significant new vanadium mine satisfying up to 10% of world demand.
• Low production costs: Estimated net cash costs of US$2.70/lb V2O5 place Häggån in the lowest quartile of the vanadium cost curve. This provides insulation against vanadium price volatility.
• Robust project economics: Post-tax NPV of US$456M-US$1,307M and IRR of 28%-49% highlight strong project fundamentals. Rapid payback of 1.5-2 years further reduces risk.
• Strategic European location: Häggån's Sweden location provides low-risk access to European vanadium markets amid rising consciousness of supply chain security.
• Sulphate of potash credits improve revenue stability: By-product SOP used in fertilizers generates 35%-50% of revenue over the life of mine, buffering exposure to historically volatile vanadium prices.
• Uranium a potential extra revenue source: Uranium at 140ppm could add significant further value if Sweden lifts its ban on uranium mining as government has proposed.

The scoping study results confirm Häggån as a potential Tier 1 vanadium project with several unique advantages that set it apart from peers globally. The project's large scale, low costs and strategic location in Europe make it attractive to potential partners and investors seeking exposure to the high-growth VRFB energy storage trend. While further studies are required to convert mineral resources into reserves and confirm project parameters, the initial outlook appears highly encouraging.

Vanadium Market Fundamentals Support Häggån Development

The vanadium market has seen rising demand from VRFB installations for grid energy storage, though steel alloys continue dominating consumption for now. This is expected to shift over the next decade, with forecasts that VRFB's will account for 75% of vanadium demand by 2030. Several factors support continued vanadium price strength to incentivize new primary mine supply like Häggån:

• VRFB demand surge: Installations are projected to grow over 15x this decade to 33GWh as countries add renewable power that requires large-scale energy storage solutions.
• Supply tightness as by-product: Over 80% of vanadium currently comes as a by-product of magnetite iron ore or uranium, limiting flexibility to respond to demand. Primary vanadium mines are needed.
• High incentive price: Average prices above US$7/lb V2O5 will be required to encourage new vanadium projects. Häggån is viable down to US$7/lb.
• Price floor from steel: Vanadium's use in high-strength steel puts a floor under prices, maintaining average prices around US$7/lb during slower demand periods.

Upside Potential from Mine Expansion and UraniumIn addition to the well-defined high-grade vanadium zone supporting the base 11-year mine life, significant potential exists to expand production through:

• Conversion of the remaining 97% of the 2Bt mineral resource not yet considered for the scoping study mine plan. The 59Mt scoping study schedule is under 3% of the total resource.
• Addition of a uranium circuit once Sweden lifts its ban on uranium. Grades around 140ppm U3O8 could contribute up to 13% extra revenue.

Next Steps for Häggån

With the positive scoping study completed, Aura Energy plans to commence a 12-18 month pre-feasibility study including further resource drilling, mine design, metallurgical testwork and initial permitting activities. This will refine project parameters before a full feasibility study and development decision.

On the corporate side, Aura aims to engage with potential strategic partners and secure funding for its share of the US$592M initial capital cost estimate. Offtake financing could contribute on attractive terms.

Conclusion

The Häggån scoping study paints an exciting picture of a large, low-cost vanadium mine in an ideal location to supply European energy storage demand. With vanadium prices expected to maintain solid support as the battery metals boom accelerates, the project offers excellent leverage to this high-growth thematic.

The next round of studies will firm up the project parameters, and Aura Energy has a strong track record technically and on the funding side that increases confidence. Investors seeking exposure to vanadium and energy storage trends should keep a close eye on Häggån's development - the project has ingredients to become a standout in the vanadium sector globally.