Optimised Toro Energy scoping study powers up WA uranium economics

Toro Energy has supercharged the project financials for its Lake Maitland uranium project near Wiluna in Western Australia, unveiling an updated scoping study forecasting a low-cost, long-life mining operation. 

The latest numbers paint an encouraging picture for a standalone operation, improving its historic net present value (NPV) by 9 per cent to a hefty $908 million while slashing the project’s payback period to 1.5 years.

The updated study was driven by a refined resource estimate and re-optimised pit design, allowing for a robust internal rate of return of 56 per cent on an estimated capital expenditure of $298M. 

The study was completed by mining experts at SRK Consulting and metallurgical specialists Strategic Metallurgy to leverage a strong uranium price of US$85 (A$130) per pound and a vanadium price of US$5.67 per pound.

The assumptions align with what the company believes is a bullish projected uranium market, buoyed by supply shortages, geopolitical tensions and growing demands for clean nuclear energy.

Toro says its Lake Maitland project is forecast to produce 1.3 million pounds (Mlbs) of uranium and 0.75Mlbs of vanadium annually during a 16.3-year mine life, totalling a substantial 22Mlbs of uranium and 12.3Mlbs of vanadium. 

The company says its operating costs are a standout, with C1 cash costs pegged at just US$15.46 per pound of uranium in the first five years, rising to US$22.67 over the life of mine. The all-in sustaining costs are equally competitive at US$20.68 per pound initially and US$28.37 over the life of the mine. 

Total EBITDA is projected at a huge $2.33 billion, with undiscounted pre-tax cash flows of $1.96B, averaging $120M annually.

Toro Energy executive chairman Richard Homsany said: “The more accurate study clearly demonstrates just how robust the potential economics of the proposed project are, with an uplift of A$75M or 9% to a base case of A$908M in pre-tax NPV8 and a significant reduction in the payback period to a very swift 18 months from the commencement of mining and processing.”

The study builds on a re-estimated resource at Lake Maitland of 33.3Mt grading 403 parts per million (ppm) uranium oxide for 29.6Mlbs contained uranium and 50Mt at 285ppm vanadium oxide for 31.4Mlbs contained vanadium.

The shallow hosted, clay-dominated resource contains both uranium and vanadium, with a strong 83 per cent correlation between the two, offering a strategic by-product bonus.

Toro’s mining plan is straightforward, using conventional open-pit truck-and-shovel methods with minimal drill-and-blast due to the unconsolidated clay host. The high-grade core will be mined first to maximise early cash flows.

The company says it is confident it can secure traditional debt and equity financing thanks to its partnership with Japanese giants JAURD and ITOCHU, which could earn a 35 per cent stake in Lake Maitland for $60M upon a positive definitive feasibility study.

Lake Maitland’s low costs and high margins make it stand out in a tightening market, should ancient regulations around uranium mining in WA ever be lifted.

With the scoping study complete and feasibility work on the horizon, Toro is charging towards project funding as it navigates political winds and, no doubt, hoping its Lake Maitland can cornerstone WA’s uranium revival.