DatePrice Target18th August 2022$0.50/shU.SUranium and Lithium...

		Date	Price Target
1		18th August 2022	$0.50/sh

U.SUranium and Lithium Exposure

Event Summary

Initiating coverage of Aurora Energy Metals(1AE.ASX) with a Speculative Buy rating and Price Target of $0.50/sh. 1AE is focused onexploration at its 100% owned Aurora Energy Metals Project (AEMP) located inOregon, USA. The AEMP covers an existing shallow volcanic hosted uraniumdeposit with lithium mineralisation present within separate overlying andsurrounding lakebed sediments.

Inexpensive uranium exposure via a well-defineddeposit.The Aurora uranium deposit hosts a JORC 2012 compliant Resource of 69mt @248ppm eU₃O₈ for 38mlb eU₃O₈, whichincludes a higher-grade upper core of 18mt @ 444ppm eU₃O₈for 18mlb eU₃O₈. 1AE currently trades on an EV/Resourcemultiple of A$0.60/lb, implying a 75% discount to the current ASX-listeduranium peer group avg. of A$2.40/lb. We anticipate this excessive relativediscount to unwind on achievement of key project de-risking milestones.

Demonstrated yet untapped lithium potential. Re-assays ofhistorical uranium-focused diamond core have returned multiple thick, highgrade intercepts (i.e. 9m @ 2,414ppm Li from 22m) in the sedimentsdirectly overlying the uranium resource, allowing for the interpretation of alarge lithium exploration target area. Cover sequences adjacent to the Aurorauranium deposit thicken in all directions, with lakebed sediments extending todepths of up to 200m below surface to the north-east of the deposit where thepotential for lithium mineralisation is yet to be evaluated. The current AEMPuranium resource has a maximum depth of ~180m below surface.

Attractive lithium nearology within theMcDermitt Caldera.Jindalee Resources’ (JRL.ASX, mkt cap: A$170m) McDermitt Lithium Project(Resources of 1.43bt at 1,320ppm Li for 10.1mt LCE) is located 10km west of theAEMP, and directly contiguous to additional claims recently granted to 1AE. TheMcDermitt Caldera also hosts Lithium Americas Corp’s Thacker Pass Project(LAC.TSX, mkt cap: US$4.1bn), being the largest known lithium deposit in theU.S. with Reserves of 179mt at 3,283ppm Li for 3.13mt LCE. The advanced statusand scale of neighbouring lithium projects somewhat de-risk the lithiumopportunity at the AEMP, in our view.