Capex Finalised For Stand-Alone Lake Maitland Uranium-Vanadium Operation

Toro Energy Limited (ASX: TOE) (‘the Company’ or ‘Toro’) is pleased to announce that the scoping level capital expenditure (CAPEX) estimation for its proposed stand-alone Lake Maitland Uranium-Vanadium operation has now been completed by mining engineers at SRK Consulting Australasia (SRK) and metallurgical and processing engineers at Strategic Metallurgy.

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HIGHLIGHTS

• Scoping level estimation of CAPEX for the proposed stand-alone Uranium-Vanadium operation at Lake Maitland has been completed by SRK Consulting Australasia and Strategic Metallurgy.
• Entire proposed operation is estimated to have a total build price of AUS$270 million or US$202.5 million (based on a US$:AUS$ 0.75 exchange rate), inclusive of a 20% contingency and 15% allowance for engineering, procurement and construction management (EPCM).
• New CAPEX estimate delivers a AUS$45 million reduction compared to the estimation of AUS$315 million for the entire Wiluna Uranium operation with processing based at the Centipede-Millipede deposit, undertaken almost 10 years ago (see ASX announcement of 30 January 2014).
  
• Latest CAPEX estimation includes all infrastructure for the proposed stand-alone Lake Maitland Uranium-Vanadium operation, inclusive of the entire processing facility with beneficiation plant and the ability to produce both a uranium and vanadium product, all mining and administration related infrastructure, access roads, power plant, borefield and a reverse osmosis desalinisation plant for water supply.
• Estimated that total processing infrastructure will have a build cost of AUS$133 million (or AUS$95.8 million excluding contingency and EPCM) and the total non-processing infrastructure will have a build cost of AUS$137 million (or AUS$99.2 million excluding contingency and EPCM).
• Proposed stand-alone Lake Maitland Uranium-Vanadium operation will have a mine life of approximately 17 years, will process some 1.94 Mt of ore per annum (front of beneficiation plant) and will produce approximately 23.5 million pounds (Mlbs) of U3O8 and 12.2 Mlbs of V2O5 over its 17 year life (the latter calculation is still being adjusted around C1¹ operating expenditure (OPEX) calculations).
  
• SRK is currently estimating the overall and year by year OPEX based on the proposed new mining schedule that resulted from the recently completed re-optimisation of the Lake Maitland mining pit. This OPEX estimation is expected to be completed soon.

Toro is pleased to highlight that this CAPEX estimate is AUS$45 million less than the previous CAPEX estimate of AUS$315 million, which was for the entire Wiluna Uranium operation with processing based at the Centipede-Millipede deposit, despite the latter being estimated almost 10 years ago (see ASX release of 30 January 2014).

Commenting on Toro’s CAPEX estimate for a proposed stand-alone Lake Maitland Uranium- Vanadium operation, Toro’s Executive Chairman, Richard Homsany, said:

“We are delighted to release a very competitive US$202.5 million CAPEX estimate for our proposed Lake Maitland Uranium-Vanadium operation. After the outstanding pit re-optimisation results, the CAPEX estimate is an excellent and economically significant milestone towards delivering our strategy to advance the Wiluna Uranium Project so that it is optimised when conditions are favourable for its financing and construction.

The Wiluna Uranium Project is an asset of global significance, and our clear focus is on the long-term feasibility of uranium production from the asset as global uranium markets continue to strengthen. Toro’s view is that we are in the early stages of an increasingly upward uranium market with peak uranium prices still to come.

Toro has invested significantly in the Wiluna Uranium Project and through our patient and focussed approach our team has delivered significant potential improvements in both the capital and operating costs of the entire Wiluna Uranium Project.

Lake Maitland represents a significant proportion of the Wiluna Uranium Project’s resources of both uranium and vanadium. The US$202.5 million CAPEX for Lake Maitland compared to the CAPEX estimation of AUS$315 million for the entire Wiluna Uranium Project prepared almost 10 years ago is an outstanding result given inflationary pressures, and significantly improves the economics of the entire project.

This CAPEX estimate is a key milestone that demonstrates that Lake Maitland could itself be a viable stand-alone uranium-vanadium operation over an approximate 17 year mine life, processing 1.94 Mt of ore per annum (front of beneficiation plant) and producing approximately 23.5 Mlbs of U₃O₈ and 12.2 Mlbs of V2O5.

This is an exciting result for Toro shareholders. Further optionality and economic upside exists for Toro given the proximity to Lake Maitland of the Centipede, Millipede and Lake Way uranium deposits that could increase the production of uranium and vanadium. We look forward to announcing the C1 operational expenditure estimate from the scoping study, which is expected to be completed soon.”

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