Toro Energy (ASX:TOE) is preparing to add millions of pounds of potential uranium production to its Wiluna project in Western Australia as a new environmental review process contemplates an expanded operation at the site.
The company has released a public environmental review for extending Wiluna operations to include the exploitation of the Millipede and Lake Maitland deposits.
The project it already approved at the state and federal levels for mining at the Centipede and Lake Way pits as well as processing at a central facility.
The strategy is to increase the productivity of the currently approved central processing plant by increasing throughput from Wiluna’s extended resource areas.
Toro has modelled for a production scenario to include 14.4 million pounds of U3O8 from Lake Maitland, 6.2 million pounds of U3O8 from Lake Way and 14.7 million pounds of U3O8 from Centipede and Millipede, which are adjacent to one another.
This four-deposit plan would include 20.1 million tonnes of ore mined at 799 parts per million (ppm) U3O8, including 15.9 million tonnes at 907ppm U3O8 over an initial 16-year mine life.
Total production at a life-of-mine recovery rate of 85.6% would be 30.2 million pounds of U3O8.
Processing head grade has been estimated to average 883ppm U3O8 over the first 10 years;, allowing for a C1 cost for the life of the project at US$31.1 per pound.
The public review for the addition of Millipede and Lake Maitland into this plan is expected to close in February next year, setting up Toro to prepare a response to submissions which will be considered by the WA government in preparing a report and recommendations on the proposal.
The proposal is also being assessed by the federal government under the bilateral arrangements for environmental assessment.
Wiluna boasts even more expansion potential in two deposits beyond the four already modelled for production, namely the Dawson-Hinkler and Nowthanna deposits
Further exploration opportunities exist on the extensive Wiluna land package with the Firestrike prospect the most attractive drill ready property.
Resource boost
Momentum in realising Wiluna’s planned expansion follows an important milestone in enhancing the economics of the project.
Last month, Toro confirmed a 20% increase in the resources at Centipede and Millipede to 6.8 million tonnes at 1,021 ppm U3O8 for 15.3 million pounds of U3O8 at a 500ppm cut-off grade.
At a 200ppm cut-off, this inventory increases to 19.7 million tonnes at 553ppm U3O8 for 24 million pounds of U3O8. High-grade zones of more than 500ppm U3O8 comprise 56% of the mineralisation in the deposits planned to be mined.
Centipede and Millipede account for the bulk of the important first seven years of operations. As such, Wiluna is expected to benefit from early operational efficiencies due to the stronger confidence in the higher-grade zones of these two areas.
Increases in resources and grade at all cut-off levels is expected to have a direct and favourable impact on processing head grade and ultimately contribute to a continued improvement in the forecast project economics particularly during early years of operations.
Unique opportunity
The Wiluna mine is one of only a handful of new projects worldwide capable of bringing new production to the market in the medium term when a shortfall is predicted during the 2nd half of the decade.
The uranium is found close to the surface and is often associated with naturally forming calcium-carbonate cement known as calcrete.
This type of deposit is not unlike the nearby Yeelirrie deposit owned by Cameco Corporation (TSE:CCO) and the Langer Heinrich deposit in Namibia being mined by Paladin Energy (ASX:PDN).
The mine will be a shallow strip excavation using surface miners with a maximum mining depth of 15 metres. Drill and blast will not be required.
The processing flow sheet is a conventional hydrometallurgical circuit based on a carbonate leach.
Analysis
Release of the environmental review is a major step toward in realising the expansion of Wiluna as a four-deposit operation.
The more ambitious scenario optimises the central processing plant, which has already been approved by state and federal governments for production from the two starter pits.
This strategy offers a more efficient exploitation not only of resources but of existing approvals, especially in the context of a recently improved resource.
The stronger resource figures for Millipede and Centipede will allow for higher head grades and more economic uranium extraction.
This output will roll out in a macro environment for uranium benefiting from a number of positive supply-demand drivers, most significantly including a huge surge in Asian reactor commissioning.
Toro is anticipating the marketing opportunities in the space with a strategy of establishing early customer relationships.
This effort has notably included Toro managing director Dr Vanessa Guthrie participating in an industry forum this year in India, where the local energy market hosts a significant presence of potential project financiers, equity partners and offtakers.
Toro is also supported by an outlook for a uranium price increase next year due to a rebound in utility contracting, Japanese reactor restarts, uranium participation buying and M&A activity in the sector.
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