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Booming uranium price prompts Toro Energy expansion at WA play

Toro Energy is re-evaluating the resource at its Wiluna uranium project in WA. Credit: File

A surging global uranium price has led Toro Energy (ASX: TOE) to re-evaluate the mineral resource of its Dawson Hinkler deposit in Western Australia, leading to a 115 per cent increase in the site’s contained uranium oxide.

Management says the rapidly-improving uranium market now supports a lower cutoff grade for the deposit’s economics, allowing it to lift its stated resource for the operation from 9.44 million pounds of uranium oxide up to 20.29 million pounds.

Toro says reducing its cutoff grade from 200 parts per million down to 100ppm allows for a better comparison with its peers, with several exploration companies using a similar metric for mineral resource estimates. The average grade of the company’s deposit now sits at 186ppm uranium oxide, with 44 per cent in the important indicated category.

Dawson Hinkler sits just 15km from Toro’s Wiluna uranium project’s Centipede-Millipede deposit and has the potential to be used in the future as a strategic satellite resource. The company says it is also re-estimating its Lake Maitland uranium deposit at 100ppm uranium oxide ahead of delivering a new resource for its wider Wiluna uranium project at the updated cutoff grade.

The Wiluna project, about 750km north-east of Perth, is fully-owned by Toro. Its current total mineral resource estimate sits at 52 million tonnes grading 548ppm uranium for 62.7 million pounds.

There is also an extra vanadium resource of 96.3 million tonnes going 322ppm for 68.3 million pounds of vanadium.

This is a considerable advancement for Toro, as the ability to now consider the inclusion of the Dawson Hinkler Uranium Deposit in the production profile of Toro’s Wiluna Uranium Project will significantly strengthen our pending feasibility study. Located only 15km away this deposit, it has the potential to further enhance the significant potential returns already on offer at Wiluna.
Toro Energy executive chairman Richard Homsany

Demand for uranium to power a clean-energy future and reduce pollution from carbon emissions has boosted the commodity’s fortunes and many countries now see uranium as the key when it comes to meeting clean energy targets. Back in February, the mineral returned a 16-year high uranium price of US$106 (AU$165) per pound.

During last year’s World Climate Action Summit in Dubai, more than 20 countries launched the declaration to triple nuclear energy. The pledge recognises the key role of nuclear energy in achieving global net-zero greenhouse gas emissions by 2050 and includes endorsements from the United States, France and Japan.

Several other countries have since also indicated support.

Based on the improved economics of uranium, Toro says it also plans to refresh and update its Lake Maitland scoping study that was first completed in 2022, to evaluate the financial outcomes from the project using the more favourable recent commodity pricing and exchange rate guidance. It says improving uranium market dynamics have allowed it to lower the cutoff grade and expand the stated uranium and vanadium resources at the Lake Way and Centipede-Millipede deposits by an uplift of about 25 per cent.

Just last month, the company revealed plans to spin out its portfolio of non-core nickel, gold, and base metal assets in WA to focus solely on uranium. Operations flagged for the spin-out into a new IPO (initial public offering) include Toro’s wholly-owned Dusty Nickel Project, 50km east of the town of Wiluna, in addition to the Yandal Gold play and Base Metal Project.

With its focus now squarely on its WA-based uranium operations, Toro looks to be in the right place at the right time to take advantage of the improved economics of the current market … particularly if the growing sentiment behind the mineral key to nuclear energy can start winning over political favour.

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