Toro Energy Ltd (ASX:TOE) Announces Updated Scoping Study
Financial Performance
Toro Energy Ltd (ASX:TOE) has released updated Scoping Study results for its Lake Maitland Uranium-Vanadium Project. The study estimates a pre-tax net present value (NPV) of approximately A$907.9 million at an 8% discount rate, reflecting a 9% increase from the previous A$832.8 million. The internal rate of return (IRR) is projected at 56%, with a swift payback period of just 1.5 years.
Project Highlights
The Lake Maitland project is expected to have a mine life of 16.3 years, producing around 1.3 million pounds of U3O8 and 0.75 million pounds of V2O5 annually. Total EBITDA is forecasted at A$2,326.9 million, with undiscounted cash flow pre-tax estimated at A$1,956.5 million. Capital costs are projected at US$194 million (A$298.4 million), encompassing infrastructure for processing, mining, roads, power, and water supply. Operating costs are competitive, with C1 cash operating costs of US$15.46/lb U3O8 for the first five years and US$22.67/lb U3O8 over the life of mine (LoM).
Executive Comments
Executive Chairman Richard Homsany stated, “This is an exciting development for Toro and its shareholders and the Board is very pleased to report the new Scoping Study results for the proposed stand-alone Lake Maitland mining and processing operation, which uses the recently completed, more accurate resource estimation and re-engineering of the proposed mining operations. The result is a more accurate study that 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 NPV and a significant reduction in the payback period to a very swift 18 months from the commencement of mining and processing.
As we have stated previously, the Lake Maitland deposit comprises a significant proportion of the Wiluna Uranium Project’s resources, so we cannot understate just how transformational the stand-alone Lake Maitland operation is on the potential economics of the entire Wiluna Uranium Project. These latest estimates at Lake Maitland outline its potential to be brought into production and capacity to generate significant returns when regulatory settings align. Importantly, Lake Maitland’s upside and quality continue to improve with each evaluation Toro undertakes, further strengthening the case that Wiluna is an asset of global significance.”
Future Outlook
Toro remains confident in further enhancing the Scoping Study outcomes through integration with its other uranium deposits within the Wiluna Uranium Project. The company anticipates that additional resources from Centipede-Millipede and Lake Way could further increase production and value at the Lake Maitland processing operation. With rising global uranium demand and prices, Toro sees significant growth potential and opportunities to optimize project economics.
Motley Fool contributor Lianne Eastty has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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