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Lake Maitland Uranium Project Extension to Increase Value of Entire Wiluna Uranium Project

Extension of the Lake Maitland Processing Operation to include Lake Way and Centipede-Millipede Uranium Deposits

Toro Energy Limited (ASX: TOE) (‘the Company’ or ‘Toro’) is pleased to announce the initiation if its Extension Study to the proposed Lake Maitland Uranium-Vanadium operation, located approximately 105 km southeast of the Wiluna township in Western Australia and 730 km NE of Perth. The Study will be completed by mining engineers at SRK Consulting Australasia (SRK). SRK and metallurgical and processing engineers at Strategic Metallurgy prepared the Scoping Study for Lake Maitland which highlighted the project’s potential to deliver robust financial returns.

  • Toro commences Lake Maitland Extension Study to incorporate material from Lake Way and Centipede-Millipede uranium deposits into proposed processing operation at Lake Maitland.
  • Pilot plant design underway to test new processing flow sheet for both uranium & vanadium products – processing revisions resulted in the very strong estimated financial outcomes of the Lake Maitland Scoping Study (excludes Lake Way & Centipede-Millipede):
    • NPV8% pre-tax of approximately A$610M at a discount rate of 8%
    • IRR 41% - Mine Life 17.5 years – Short Payback 2.5 years
    • Total EBITDA $1,768.6M
    • Average EBITDA $1.95M per week ($101M pa)
    • Modest capex of US$140M plus 20% contingency and 15% EPCM allowance
    • Low operating cost estimates for Life of Mine:
      • C1 cash operating cost US$23.10/lb U3O8
      • AISC of US$28.02/lb U3O8
    • C1 US$15.84/lb U3O8 & AISC US$20.32/lb U3O first 7 years provide very strong margins
    • Low average strip ratio of 1.17
    • Annual average production 1.3Mlbs U3O8 and 0.7Mlbs V2O5
    • Total production 22.8Mlbs of U3O8 and 11.9Mlbs of V2O5
    • Estimates assume US$70/lb U3O8 and US$5.67/lb V2O5 price, and US$:A$0.70 exchange rate
  • Phase 1 of the Extension Study will include a pit optimisation of the Lake Way and Centipede- Millipede uranium deposits.
  • The Lake Maitland pit optimisation was successful to increase potential production by 8mlbs U3O8 and 11.9Mlbs v2O5 – over US$625M of additional product value based on the above price assumptions.

The first 7 years of the proposed Lake Maitland Uranium Vanadium operation is proposed to process high grade uranium material – new study will test whether this high grade operation can extend for well beyond the first 7 years and have a transformational effect on the value of the broader Wiluna Uranium Project.

Management Commentary

Commenting on this exciting initiative Toro’s Executive Chairman, Richard Homsany, said:

“As strengthening uranium market conditions continue to align with valuable technical and development improvements at the Wiluna Uranium Project, the Board is delighted to report this initiative to add significant value to Wiluna via the extension of our Lake Maitland uranium vanadium processing operation.

The quality and valuation of Toro’s uranium assets are expected to enhance and progress rapidly. Whilst Lake Maitland represents a significant proportion of the Wiluna Uranium Project’s resources, and the Scoping Study results clearly illustrate the transformational effect of the stand-alone Lake Maitland operation on the potential economics of the entire Wiluna Uranium Project. The uranium resources at Lake Way and Centipede-Millipede are very substantial and naturally need to be evaluated for viability as additional material at any Lake Maitland uranium vanadium processing operation.

Aside from the strong potential to increase production at Lake Maitland, in particular Toro looks forward to evaluating whether this may extend the processing of high-grade uranium resource well beyond the 7th year of production.

Global uranium markets are strengthening. With Toro’s continuing work streams at Wiluna, Toro is confident that there is significant scope to comprehensively build upon the foundations of the strong Lake Maitland Scoping Study outcomes. This is driven by Lake Maitland’s close proximity to Toro’s 100% owned Centipede-Millipede and Lake Way uranium deposits within the Wiluna Uranium Project.

Toro remains committed to demonstrating that its Wiluna Uranium Project is an asset of global significance that can be brought into production when government policy and uranium markets align.”

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ReleaseThis article includes content from Toro Energy, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.

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