ASX-listed Toro Energy’s extension study of the proposed Lake Maitland uranium/vanadium operation, located about 105 km southeast of the Wiluna township, in Western Australia, has significantly advanced, the company says.
The study is being undertaken by mining engineers at SRK Consulting Australasia. SRK and metallurgical and processing engineers at Strategic Metallurgy prepared a scoping study for Lake Maitland, which highlighted the project’s potential to deliver robust financial returns, Toro points out.
The extension study is evaluating the incorporation of material from Toro’s 100%-owned Lake Way and Centipede-Millipede uranium deposits into a proposed processing operation at Lake Maitland.
The uranium resources at Lake Way and Centipede-Millipede are significant and need to be evaluated for viability as additional material at any Lake Maitland uranium/vanadium processing operation, Toro explains.
Pilot plant design continues, resulting from the “excellent” estimated financial outcomes of the completed Lake Maitland scoping study, which excluded any upside from the inclusion of resources from the Lake Way and Centipede-Millipede deposits, Toro avers.
It says there is strong potential to increase production at Lake Maitland with additional uranium resources from Lake Way and Centipede-Millipede.
The extension study will evaluate whether this extends the potential processing of high-grade uranium resource well beyond the seventh year – the standalone Lake Maitland operation is expected to process seven years of high-grade material.
The extension study includes an assessment of the pit optimisation of Lake Way and Centipede-Millipede to determine economic cut-off grades based on the latest long-term prices, exchange rates, operating costs and processing recoveries.
Lake Maitland pit optimisation successfully increased potential production by eight-million pounds of natural uranium ore concentrate and 11.9-milllion pounds of vanadium oxide.
Toro outlines potential upside from the incorporation of Lake Way and Centipede-Millipede in the financial metrics of the Lake Maitland scoping study, which currently are net-present value pre-tax of about A$610-million, an internal rate of return of 41%, a mine life 17.5 years and a short payback of 2.5 years.
Moreover, total earnings before interest, taxes, depreciation and amortisation (Ebitda) are estimated at $1.77-billion, average Ebitda is at $1.95-million weekly ($101-milllion yearly), and there is a “modest” capital expenditure of $140-million, low operating cost estimates for the life-of-mine, and a low average strip ratio of 1.17.
“We are pleased that strengthening uranium market conditions continue as we develop and seek to maximise the value of the Wiluna uranium project, especially our evaluation of extending our Lake Maitland uranium/vanadium processing operation to include materials from our nearby 100%-owned uranium deposits, Centipede-Millipede and Lake Way.
“The uranium resources at Lake Way and Centipede-Millipede are strategically located and considerable, and need to be thoroughly evaluated for viability. The inclusion of additional material into the Lake Maitland uranium/vanadium processing operation has the strong potential to add significant value to the Wiluna uranium project,” says Toro executive chairperson Richard Homsany.
“One of our key aims is to strengthen the production schedule at Lake Maitland and to assess the potential to extend the potential processing of high-grade uranium resource well beyond the seventh year of production, as is presently the case for a Lake Maitland-only operation.
“Global uranium markets continue to strengthen, and fundamentals remain strong. Toro’s current and planned development activities at Wiluna will significantly build upon the excellent Lake Maitland scoping study outcomes,” he adds.