Toro Energy (ASX:TOE) has unveiled plans to demerge its portfolio of non-core nickel, gold, and base metal assets in Western Australia as it pivots to focus solely on uranium.
Projects flagged for the spin out include Toro’s wholly owned Dusty Nickel Project 50km east of the town of Wiluna, and the Yandal Gold and Base Metal Project.
Toro, which has a $58.33 million market capitalisation, says the proposed demerger follows a detailed review of its asset base in light of the results returned from the Lake Maitland Scoping Study.
Lake Maitland is part of the company’s flagship Wiluna Uranium Project in Western Australia.
The Scoping Study for Lake Maitland outlined a stand-alone project with a pre-tax net present value of $610 million, and an internal rate of return of 41%, based on a triuranium octoxide (U3O8) price of $70 per pound.
Capital expenses are estimated at US$189 million with a 2.5 year payback period. All-in sustaining costs of US$28.02 per pound are expected to deliver EBITDA of almost $1.77 billion over the life of the mine.
According to Toro, an increase in the value of Lake Maitland is anticipated once an update to the Scoping Study is completed.
“With strong financial metrics highlighted by the Lake Maitland Uranium Scoping Study, and the expected transformational increase in NPV 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,” Executive Chairman Richard Homsany says.
“Toro believes a demerger and anticipated IPO of the demerged company provides a compelling opportunity to unlock the considerable underlying value of these highly prospective nickel, gold, and base metal assets, while allowing Toro to aggressively pursue the development of its 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.”
Any demerger is expected to be conducted by way of an equal capital reduction in Toro and an in-specie distribution of its shares in the spun-out entity to its shareholders. Upon completion, existing shareholders will have an interest in the proposed new company.
Toro Energy is a Perth-based uranium developer and explorer committed to building an energy metals business with the Wiluna project as the centrepiece.
Write to Adam Drought at Mining.com.au
Images: Toro Energy
