Toro become a new wave uranium producer under YA Global Master SPV Ltd

Active Australian uranium explorer Toro Energy Ltd (ASX: TOE)
Wednesday put forward its plan to join the ranks of Australian uranium producers
by mid 2012, just in time for the expected supply crunch.

Thanks Louthean, Perth

Toro Energy's managing director Greg Hall said project economics indicate that its Lake Way and Centipede deposits at Wiluna would now achieve a 17% reduction in capital through re-design and new costings, while operating costs were now expected to be in the US$10-11 per pound range.

Up front capital costs for developing Wiluna were down to A$162 million (US$121) from A$195 million (US$146 million).

The timeline for developing the Wiluna deposits -- relatively close to the historic Wiluna gold mining centre, now being operated by Apex Minerals -- takes in completing a definitive feasibility by the end of 2010, achieving offtake agreements about the same time and making the decision to proceed with construction by mid 2011.

The expected budget for the bankable feasibility was put at A$21 million, taking in resource definition drilling and initiating the approvals processing.

The Lake Way deposit has a resource of 9.7 million tonnes grading 544 ppm U₃0₈for a resource of 13 million lb U₃0₈ in a near-surface calcrete-style deposit. Centipede to the south has 10.5Mt @ 543 ppm and a resource of 12 million lb U308. About 90% of Centipede's resource is now in the indicated category.

Toro's next project in line is the Napperby deposit, north west of Alice Springs, on which it has an option to acquire 100% from Deep Yellow Ltd (ASX: DYL). This has an inferred resource of 9.34 Mt @ 359 ppm for a contained 3.353 tonnes (7.4 million lb) U₃0₈.

Hall said a resource update was due on Napperby which was close to existing infrastructure, including a gas pipeline near the property's southern boundary.

The company also holds the large Lake Mackay uranium project on the border of Western Australia and the Northern Territory, where drilling was planned for this and next month.

In Namibia, Toro was also in partnership with Deep Yellow - which was earning 65% in three licences covering 1,326 square kilometres in which Toro could retain a 25% stake - with the balance held by a Namibian black empowerment company.

Targets on the Namibian properties include palaeo-channel calcrete deposits similar to bedrock deposits at Rossing and possible extensions of the Langer Heinrich palaeo valley.

Greg Hall said the major shortfall between new mine production and growth in demand for nuclear power would be felt in 2015, and the planned and proposed nuclear power units were growing worldwide by 43% and 29% respectively.

China and India were still the main contributors to building the nuclear power pipeline, with uranium the only base-load capable energy alternative to fossil fuels.

In mid August Toro announced it had secured a A$20 million (US$ million) facility with US-based investment fund YA Global Master SPV Ltd under which Toro could issue shares at its discretion to YA Global over the next 60 months.

Hall said at the time that while Toro has sufficient near-term funds this "at call" facility would provide increased flexibility for financing its activities going forward.