Toro Energy, an Australian uranium development and exploration company, has announced plans to demerge non-core assets including nickel, gold and base metal projects in Western Australia (WA).
This decision awaits necessary approvals and follows a comprehensive review of the company’s asset portfolio, particularly in light of findings from the Lake Maitland scoping study.
The company noted that Lake Maitland, a key component of Toro’s Wiluna Uranium Project in WA, has shown promising potential.
The scoping study for Lake Maitland revealed a stand-alone project with a pre-tax net present value of $610m (A$926.6m) and an impressive internal rate of return of 41%, assuming a triuranium octoxide (U3O8) price of $70 per pound.
The projects earmarked for the spin-out include the wholly owned Dusty Nickel Project located 50km east of Wiluna, and the Yandal Gold and Base Metal Project.
Toro believes that the demerger will allow for a more focused approach to its uranium ventures.
The projected capital expenses for the Lake Maitland project stand at $189m, with an anticipated payback period of two and a half years.
The all-in sustaining costs are estimated at $28.02 per pound, which could yield earnings before interest, taxes, depreciation and amortisation (EBITDA) of nearly $1.77bn over the mine’s lifespan.
Toro anticipates an increase in the value of the Lake Maitland project following an update to the scoping study.
This move is expected to unlock value for shareholders by allowing the company to concentrate on its core uranium assets while the demerged entities pursue their own growth strategies.
Toro executive chairman Richard Homsany said: “With the strong financial metrics highlighted by the Lake Maitland Uranium Scoping Study, and the expected transformational increase in NPV [net present value] following a soon-to-be-completed refresh, we believe it is the right time to consider demerging our non-core projects to allow Toro to focus solely on expediting the development of our globally significant uranium assets.
“Toro believes a demerger and anticipated IPO [initial public offering] of the demerged company provides a compelling opportunity to unlock the considerable underlying value of these highly prospective nickel, gold and base metals assets, while allowing Toro to aggressively pursue the development of its world-class Wiluna Uranium Project.
“The considerable amount of work completed to date by our team has demonstrated that the Lake Maitland Deposit, which is part of the Wiluna Uranium Project, is viable as a stand-alone operation with incredibly attractive financial metrics.”
