Canadian uranium firm makes play for Toro Energy

Toro Energy is set to be acquired by Canadian uranium firm IsoEnergy, which plans to add to its portfolio of high-grade North American projects with the addition of Toro’s flagship Wiluna uranium project. The market liked the deal too, sending Toro’s shares to a 52-week high of 48 cents, up from yesterday’s 32.5c close on the highest daily volume in 12 months of 7.3 million shares.

IsoEnergy and Toro have entered a scheme implementation deed, which will see IsoEnergy acquire all of Toro’s fully paid ordinary shares. IsoEnergy is stumping up 0.036 of its common shares for every share held in Toro, for an implied consideration of A$0.585c per Toro share. The scheme requires Toro shareholder approval, customary court and regulatory approvals, in addition to Foreign Investment Review Board (FIRB) approval.

Based on IsoEnergy’s closing price on the Toronto Stock Exchange on October 10, combined with the prevailing Australian dollar-Canadian dollar exchange rate of 0.9078 on the day, the offer values Toro at C$68.1 million (A$74.68 million). 

IsoEnergy, with a Canadian market cap of more than $800 million, will see its shareholders own 92.9 per cent of the combined entity, with Toro shareholders holding 7.1 per cent. IsoEnergy has several well-known entities holding stakes in its business, including NexGen Energy, Energy Fuels and Mega Uranium.

Timing for closure of the deal is expected in the first half of next year.

IsoEnergy holds an impressive portfolio of uranium deposits, including the astonishing Hurricane deposit within its Larocque East project in the renowned high-grade uranium region of the Athabasca Basin in northern Saskatchewan and Alberta, Canada.

Hurricane contains an NI 43-101 indicated resource of 48.61 million pounds at a coffee-spitting 34.5 per cent, or 345,000 parts per million, uranium oxide.

The deposit includes an uber-rich zone of nearly 44 million pounds grading 52.1 per cent uranium oxide, making it one of the world’s premium grade uranium deposits. 

IsoEnergy also has the 8.8 million pound Tony M mine in Utah and holds a series of call options over potential future development projects in the US and Canada in its uranium kitbag.

The acquisition of Toro’s Wiluna project boosts IsoEnergy uranium stash by an impressive JORC-compliant 78.1 million pounds of measured and indicated resources, in addition to a further 34.6 million pounds sitting in the inferred category.

The Wiluna project comprises the Centipede-Millipede, Lake Way and Lake Maitland deposits, combining to add 69.1 million pounds of indicated resources and 4.5 million pounds of inferred resources to IsoEnergy’s Australian uranium tally, along with the Dawson Hinkler deposit contributing a total of 20.3 million pounds, Nowthanna deposit 11.9 million pounds and the Theseus resource of 6.9 million pounds.

IsoEnergy also holds the Queensland non-JORC resource historical estimates of the Milo deposit with 13.8 million pounds and the Ben Lomond resource of 10.9 million pounds.

The Lake Maitland deposit had a scoping study completed, demonstrating a potentially viable standalone project. Japan Australia Uranium and Itochu hold the right to acquire a 35 per cent interest in Lake Maitland for US$39.6 million (A$60.7 million) to secure offtake supply.

IsoEnergy says it will consider a potential ASX-listing if deemed appropriate and hopes to benefit from a re-rating due to its asset diversification into a large Australian project. It plans to push the near-term production potential of its North American assets.

IsoEnergy is taking a punt on the future development of the Wiluna project, lining up with a potential change in Government policy on uranium production in Western Australia, allowing for it to reap the rewards from its move to lock-in a solid uranium asset now, to potentially produce big dividends later.

Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au