www.toroenergy.com.au
Toro Energy (ASX: TOE) is well placed to operate one of the first new Western Australian uranium mines. The company is also an explorer in Western Australia, the Northern Territory, South Australia and in the African country of Namibia.
The Wiluna Project is at an advanced stage in government assessment and approval, with Toro planning to commit to construction late next year for first production in 2013. The project hosts two shallow (generally less than 10m deep) calcrete deposits with a Measured, Indicated and Inferred resource of 24.4Mlbs of contained Uranium (U3O8) in the current project approved.
Toro Energy to benefit from improved economic returns for Wiluna Uranium Project, WA
Toro Energy (ASX: TOE) has received the results of a major review of the financial outcomes of the Wiluna Uranium Project in Western Australia, benefitting the project's economic parameters and Toro shareholders.
Over the first 10 years operating life of the project the new economic model has indicated that a "C1" cash operating cost of US$33 per pound Uranium.
C1 cash operating costs encompass all fixed and variable site based costs such as mining, milling, processing, admin and general expenses. It excludes royalties and capital allowances.
The model also indicates that Uranium recovery will settle at 85% after a ramp-up of two years and average annual production of 1.8 million pounds Uranium equivalent will achieved from an average processing head grade of about 720 parts per million (ppm) Uranium.
Greg Hall, Toro's managing director, said “Toro is pleased with the progress that has been made at the Wiluna Uranium Project including the recent completion of the resource update, the pilot plant program, improvement in project economics and completion of the public exhibition phase of the government assessment and approval process.
"It is the Australian project most advanced in government assessment and only one of a handful of Uranium projects which can be developed worldwide in the short term.”
The economic model is based on the construction of an alkaline agitated tank leach processing plant and all associated supporting infrastructure for A$280 million.
The plant would have a nominal annual throughput of 1.3 million tonnes per annum and produce about 820 tonnes Uranium equivalent per year.
Toro expects selective mining to occur within a series of shallow open pits and which would be progressively rehabilitated after the pits were utilised as tailings impoundment facilities or for rock waste disposal.
Toro’s Environmental Review and Management Program is currently being assessed by the Western Australian and Federal Governments.
The improved economics of the project are a result of several factors which include:
- An upgrade in the resource model and a revised mining plan for the Lake Way and Centipede Deposits. The new mining plan involves the selective mining of the ore bodies to a cut-off of 250 ppm U3O8 and processing to a higher cut-off of 500 ppm U3O8.
The average strip ratio is 3 to 1 and the average feed grade to the processing plant is projected to be approximately 720 ppm U3O8 in the first ten years of the project;
- Integration of the results of the recent pilot plant process. The pilot plant testing confirmed recoveries of 85% are achievable and the incorporation of revised reagent usage levels; and
- Redesign of the economic model to reflect the impact of the USD/AUD exchange rate on the cost structure of the project and the identification of USD priced input costs.
The company estimates that about 30% of the C1 cash operating cost are USD denominated and that the long term exchange rate will trend to US$0.85 in 2015, based on analysts’ consensus forecasts.
Toro is continuing to investigate a number of initiatives to further improve the economic outcomes of the project including further improvement of the JORC resource base through extensional and infill drilling.
The company is also seeking further optimisation of the mining schedule to increase grade of ore to processing plant and the assessment of third party provided power generation and accommodation services.
The feasibility study for the Wiluna Uranium Project is ongoing and is scheduled to be completed in the second quarter of 2012 after the conclusion of the formal full feasibility study by independent engineers.
The company expects first production in late 2013, subject to government approvals.
With Uranium prices ticking up recently to $55.25, as well as the Australian Prime Minister pushing to allow Uranium exports to India, the Uranium sector is showing some resilience. The initiative could also open new funding options for emerging miners of Uranium.
Toro Energy had a healthy $A18.5 million cash balance at the end of the September quarter.
