Leading global resource investor The Sentient Group is to inject up to A$10 million cash into Australia’s Toro Energy Limited (ASX: “TOE”) with a further $10 million funding into its advanced Wiluna uranium project in Western Australia under final stages of negotiation, as part of a broader funding and asset package announced today.
The cash boost is a cornerstone of the total deal, delivering Perth-based Toro – one of Australia’s most advanced uranium developers – with a cash-in-bank cushion of at least four years.
The deal announced today involves new and significant backing from The Sentient Group, which globally manages more than US$2.7 billion in investments in the resources sector.
Sentient’s cash injection is part of a wider deal that comprises a A$10 million placement into Toro, with a further $10 million direct funding contribution in the final stages of negotiation for R&D and engineering studies to improve Wiluna project and bring it to a Final Investment Decision as the uranium market recovers.
The second part of the package involves Toro acquiring Sentient’s Canadian-based uranium assets, in a transaction valued at approximately A$18.9 million.
This will give Toro its first international exposure to leveraging its project development pipeline and technical and permitting skills to assets in other jurisdictions, as improvements in the uranium price are forecast over the next two years.
The Canadian assets include the high quality Matoush uranium exploration and development project in northern Quebec.
More than C$125 million in development funds has been spent on Matoush by its owner Strateco in the past eight years. The project remains on care and maintenance pending resolution of permitting and regulatory issues with the regional government.
Wiluna will remain Toro’s priority, with the Company determined to deliver Western Australia’s first and Australia’s sixth uranium mine as and when the uranium market recovers.
Under today’s transactions, Sentient will become a major shareholder in Toro, with an 18.9% stake, just behind the two largest, Oz Minerals (21.9%) and Mega Uranium (21.5%).
Subject to approvals, Toro anticipates all transactions being completed by mid-December.
Toro Managing Director, Dr Vanessa Guthrie:
“Toro is pleased to have secured the Company’s financial position for the medium term and emerge with an expanded global uranium investments portfolio supported by a major new shareholder in Sentient. “The transaction gives Toro a much strengthened strategic investor presence on our share register, increases our asset base, and enhances our financial position so we can focus on improving our Wiluna Project through targeted research and development and engineering studies.
“This enables us to focus on bringing Wiluna into production in the expected emerging market supply gap and promoting the potential of the Wiluna uranium province. Strategically, we also now have our first opportunity, when conditions prevail, to develop an expanded global uranium portfolio, with Canadian and North American markets support for the potential for uranium market growth in rising nuclear energy demand around the globe.
“We welcome Sentient as a new significant shareholder in Toro, and look forward to working with its management to both improve the Wiluna Project as well as developing our global uranium portfolio aspirations.”
Sentient commented that it is pleased to become a significant investor and partner in Toro.
“Sentient is pleased to partner with Toro to shape the Wiluna Uranium Project as a strategic asset in the heart of a premier undeveloped uranium province in Western Australia. We have a track record in mine and processing technology innovation and assisting corporates through final stages of feasibility and project financing. We look forward to assisting Toro to bring the Wiluna Project through the final stages of its feasibility over the coming years.”
Sydney-based Sentient investment manager, Mr Michel Marier, will join the Board of the Australian company as a nominee of Sentient.
The Sentient transactions require approval by the Foreign Investment Review Board (FIRB), which is expected by mid-December 2014.
Toro plans to produce around 2mlbs U3O8 per year from its 100%-owned Wiluna project over a 16 year mine life. Toro already has the approval of the Western Australian and Federal Governments to establish a processing facility and commence mining of two of Wiluna’s deposits, Centipede and Lake Way, and the Company is currently undergoing the government environmental assessment and approval processes to mine two additional deposits at Wiluna, Millipede and Lake Maitland.
Toro has also appointed BBY Australia Ltd supported by RealFin Capital Partners and Aetas Global Capital brokers to advise the Company on a placement to institutional investors and a Share Purchase Plan for shareholders.
Toro Energy is a uranium development and exploration stage mining company based in Perth, Western Australia.
Toro’s flagship asset is the 100% owned Wiluna Uranium Project, consisting of six calcrete hosted uranium deposits. The project is located 30 kilometres southwest of Wiluna in Central Western Australia. The Centipede and Lake Way deposits have received full government approval for mining providing the Wiluna Project with the opportunity to be Western Australia’s first uranium mine.
Toro also owns a highly prospective suite of exploration properties highlighted by Toro’s own discovery at the Theseus Project. The Company also owns uranium exploration assets in the Northern Territory and in Namibia, Africa.
Toro is also pursuing growth opportunities through accretive uranium project acquisitions. www.toroenergy.com.au