Toro Energy Pushes Wiluna Forward as Uranium Markets Return

Proactive Investors highlighted positive points on Toro Energy Limited (ASX:TOE) as it demonstrates that the Wiluna Uranium Project in Western Australia will be financed and brought into production as markets for the nuclear fuel improve.
Highlights from the research report include:

• Toro’s Wiluna regional resource contains approximately 76.5 million pounds of uranium oxide, sufficient to run a mine for around 20 years.
• The project has already received government environmental approvals for the processing facility and two of the six deposits, setting it up to be WA’s first producing uranium operation.
• In December 2014, the company raised $20 million through a subscription and securities sale agreement and unitisation deed with independent global private equity firm The Sentient Group.
• Recent optimisation work at Wiluna has included an ambitious drilling program, completed at the end of June, which comprised a total of 130 sonic holes for 983 metres across the project’s Centipede, Millipede, Lake Maitland and Nowthanna areas.

Analysis
Toro’s proven ability to raise cash for Wiluna has reflected a growing awareness about the pending upswing in the uranium price as the growing Asian markets explore options for cleaner energy sources.
Wiluna’s location in WA provides the politically stable mining jurisdiction that is necessary for uranium customers needing security of supply through undisrupted 5-10 year contracts. Well established business ties between WA’s mining industry and its Asian customers are likely to facilitate future foreign investment in the state’s emerging uranium sector.
Strategic investment and offtake partners for Wiluna are likely to emerge from India and China as they continue with their nuclear growth agenda, as MD Dr Vanessa Guthrie actively pursues the high level of interest shown in Australian uranium supplies.
Further meetings are planned with JAURD and Itochu of Japan – Toro’s joint venture partners for the Lake Maitland deposit.
Given their long term supply horizons, it would not surprise to see offtake and investment interest emerge sooner than later.
Wiluna’s design features, management controls and mitigation measures are expected to allow environmental, socioeconomic, health and cultural heritage impacts to be managed sustainably – a critical political advantage in this sector.
Toro has successfully completed a trial mine and a comprehensive metallurgical testwork program including a pilot plant trial. These studies substantially reduced the technical risk of the project by generating critical information that was used to support the engineering design of the project.
Approvals from both State and Federal governments for the extension to the Wiluna Project are tracking on schedule during 2016.
For the long term investor looking for uranium counter tracking an inevitable uranium price rise and management team adding significant value, it is reassuring to be investing alongside private equity firm The Sentient Group with its confidence to acquire an 18.3% shareholding.

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