As market conditions continue to improve, Toro Energy has cranked up the resource estimate at its Lake Maitland deposit near Wiluna in WA revealing a 12 per cent rise in its uranium resource and a 74 per cent jump in vanadium stocks, after lowering the cut-off grade to 100 parts per million (ppm) to better align with its peers.
The re-estimation of the deposit, which is part of the bigger Wiluna Uranium project, has delivered an increased total inventory of 29.6 million pounds (Mlbs) of uranium at a grade of 403ppm and 31.4Mlbs of vanadium running at 285ppm, as well as giving the shares a boost today with the price up as much as 15 per cent to 22c on strong turnover.
The overall Wiluna project has also benefitted with the total uranium resources increasing by 17 per cent to 73.6 million pounds and vanadium stocks rising by 31 per cent to 89.3 million pounds. In lowering the cut-off grade for uranium, the company has now aligned Lake Maitland with its other Wiluna deposits, Centipede-Millipede and Lake Way.
Toro Energy executive chairman Richard Homsany said: “Driven by strengthening uranium market conditions, we are very pleased to provide this significant expansion to the Lake Maitland and Wiluna resource bases, utilising a lower cut-off grade. From a benchmarking perspective, the lower cut-off grade permits better comparison with Toro’s industry peers, many of whom also state uranium resources at a 100ppm U3O8 cut-off”.
According to management, the company is continuing to review the most financially feasible model for the Wiluna project in lockstep with the current difficult regulatory conditions blocking uranium development in WA in the hope of an eventual change in political direction.
Notwithstanding calls from federal Liberal leader Peter Dutton to overturn the state's long-standing ban on uranium mining, David Michael, Western Australia's mines minister has continued to reject the notion.
The state has effectively barred the development of mining the clean fuel ever since Labor was swept to power in 2017, citing voter approval reaffirmed from two successful election wins, while Dutton has more recently departed from the federal government’s “no-nuclear” stand to made push the development as a centrepiece of the Coalition's energy policy.
However, as the timeframe continues to stretch for finding alternative clean power sources in sufficient capacity to replace fossil fuels, any change in government after a federal general election next year could rapidly find domestic uranium mining hopefuls back in the saddle.
In preparation for a possible U-turn in policy, Toro has been busying itself by completing the finalised design of a pilot plant with improved hydrometallurgical circuits that it hopes will be able to better beneficiate the ore at site.
Additionally, a recent scoping study outlined strong numbers for the project were it to be developed. With a net present value (NPV) of $832 million and an internal rate of return (IRR) of 48 per cent the development would deliver a total EBITDA of $2,3 billion across 17 years with a modest up front cost of $203 million
The Wiluna uranium-vanadium deposits are shallow, groundwater-associated formations, similar to bigger deposits such as the 139Mlbs Yeelirrie deposit owned by Canadian-based uranium giant Cameco Corporation.
These deposits are hosted in sedimentary layers formed within ancient drainage systems or paleochannels, with grades linked to groundwater levels rather than specific rock types.
The primary ore mineral is Carnotite, which forms in near-surface zones and is not dependent on geological structures, making the shallow depth from the surface a key economic factor.
With $12 million in the bank, Toro is well funded to reach its next milestones. And any change in government policy in the next 12 months would by hugely impactful to the project with investors likely to be keeping a close eye on the politics of the day.
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