Toro Energy’s (ASX:TOE) Wiluna project on schedule

Interviews

by Clive Tompkins

Transcription of Finance News Network Interview with Toro Energy Limited (ASX:TOE) Managing Director, Dr Vanessa Guthrie


Clive Tompkins: Hello Clive Tompkins reporting for the Finance News Network. Joining me from Toro Energy Limited (ASX:TOE) is Managing Director, Dr Vanessa Guthrie. Vanessa, welcome back.

Dr Vanessa Guthrie: Thanks Clive, good to be here.

Clive Tompkins: Vanessa, you’ve had a busy start to the year at Toro. What were the highlights?

Dr Vanessa Guthrie: Toro’s been very active in the first half of the year. We’ve undertaken drilling last year, which we announced the results of. A 12 per cent increase in the head grade, which is an outstanding result and with a 43 per cent reduction in waste mined. This overall will give us a much better mining cost, as we come to the feasibility study for the project. And also, we’ve uncovered that the higher grade is in much more continuous lenses, and that’s really important for mining inventory.

Secondly, we’ve undertaken some beneficiation studies looking at the process flow sheet, on the back of those good grades. And that has given us some very encouraging results with an 80 per cent mass rejection, while retaining 90 per cent of the uranium into the process flow sheet. And then thirdly, we’ve of course been progressing the environmental approvals for Lake Maitland and for the Millipede project, which is an extension to the existing approvals we hold.

Clive Tompkins: The most recent beneficiation results were very encouraging. Can you tell us more?

Dr Vanessa Guthrie: Those first results were done of course on one sample, at the Lake Maitland deposit. What they indicated is that the geology, the uranium is actually not locked up in any one particular size fraction. And what we can now do is of course, replicate that result across a number of samples, across all of our deposits and then on the back of that, be able to come to a commercial pilot plant. The real aim for this and the real exciting news is that the beneficiation, gives us the opportunity to reduce both OPEX and CAPEX for the project. So we’ll be able to recast new project economics as the year progresses.

Clive Tompkins: And Vanessa, when do you expect to have final approvals for Millipede and Lake Maitland?

Dr Vanessa Guthrie: Well the Millipede and Lake Maitland environmental approval process, commenced almost two years ago and we’ve now completed the public consultation process. We’ve done all of our baseline studies, we’ve responded to the public submissions and the Government. And now it’s with the EPA in Western Australia to undertake the full assessment. We expect that through that assessment process, then public appeals, that the Minister will then be advised to be able to make a decision, hopefully by the yearend. And that will then complete our economic mine plan.

Clive Tompkins: What are the catalysts that will see uranium prices move higher?

Dr Vanessa Guthrie: The start of the uranium price is in Japan and Japan really does set the sentiment. Japan has restarted four reactors since the closure, since Fukushima. And of those four, while they’ve been under power production, two have now had an injunction against them and they’ve been closed down again. They’re expected to go through the appeal process and come back to market. There is a fifth reactor currently in the process, expected to restart in the next couple of months. And Japan has committed to 20 per cent of its power mix being nuclear, by 2020. So the expectation is Japan will come back to 20 per cent nuclear power production.

The other two big drivers are China and India. And in China, they have committed to six to eight reactors to be built every year, from now until 2020. That’s 40 new reactors in their mix and it’s of course, driven largely by the concerns around climate change and the commitments these countries have made, to reducing their climate change impact. Secondly is India; India have committed to a further 12 reactors to be built in-country. And they are looking to grow their fleet from 2020 onwards. So those sustained growth drivers are what will underpin a price recovery, in the near and long term.

Clive Tompkins: You just touched on India. How is the Indian market progressing?

Dr Vanessa Guthrie: India is very driven by Prime Minister Modi’s commitment to bring electricity to all households in India by 2020. Currently there are 300 million people in India who live without power, and to be able to provide that electricity, India needs every source of power that they can find. Nuclear is absolutely a part of that mix; they have a commitment to be 25 per cent dependent on nuclear power, by 2050. And that means that- and it is very much driven by again, that climate change underpinning India’s need for growth.

Prime Minister Modi’s committed to a seven per cent GDP growth, every year for the next ten years. You can’t do that unless you have a solid commitment to power and energy. And that’s where India will certainly be driving the nuclear power production, post 2020.

Clive Tompkins: Last question Vanessa. What’s next for Toro and Wiluna?

Dr Vanessa Guthrie: On the back of the very good results that we’ve had in the first half of the year, we’re continuing with our technical studies. This is very focused on process optimisation and replicating those beneficiation results, across all of our deposits. Once we have that in hand, we can then rerun our project economics towards the end of the year. And we expect to be able to deliver the project at a much lower uranium price, which is really now in the new price paradigm, around $50 to $55 per pound for uranium.

On top of that of course, we’re completing the approvals. And we also expect to have a traditional owner agreement with the local Aboriginal community secured, within the next few months. So all in all, it’s a very busy time at Toro and it will continue to be during 2016.

Clive Tompkins: Vanessa Guthrie thanks for the update.

Dr Vanessa Guthrie: Pleasure.


Ends

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