Toro set to turbo charge WA uranium play economics with vanadium

Toro Energy has begun integrating its new vanadium resource into the recently updated Lake Maitland uranium resource block model near Wiluna in WA. The move is set to dramatically impact the company’s previously tabled scoping study on the project that will now benefit from both uranium and vanadium sales.

The combination of the two resources may also lead to economies of scale when it comes to mining according to the company which will now look to re-optimise the proposed Lake Maitland mining open pit using a combination of both uranium and vanadium.

Management expects to complete an updated scoping study for a stand-alone uranium-vanadium mining and processing operation at Lake Maitland before the end of 2024.

It also expects future planned project optimisation work and a pilot plant programme to evaluate further economic improvements resulting from potentially integrating additional resources at Toro’s nearby (100 per cent owned) Centipede-Millipede & Lake Way uranium deposits.

Highlights of the previously revised resource estimate at Lake Maitland include a 12 per cent rise in uranium and a 74 per cent jump in vanadium after lowering the cut-off grade to 100 parts per million to better align with its peers. The re-estimation of the deposit, which is part of the bigger Wiluna uranium project, has delivered an increased total inventory of 29.6 million pounds (Mlbs) of uranium at a grade of 403ppm and 31.4Mlbs of vanadium running at 285ppm.

Significantly improved financial outcomes from the recently updated Lake Maitland Scoping Study (that will now be upgraded again to include vanadium) were an estimated 7 per cent increase in the internal rate of return (IRR) to 48 per cent, a 30-plus per cent increase in earnings (EBITDA) to A$2.3b and a 37 per cent increase in net present value (NPV) to a whopping A$832.8 million.

The new scoping study will include a pit re-optimisation of the recently updated uranium resource block model, with the vanadium resource integrated within it, to assess a change to mining volume and therefore potential production. A favourable outcome on this alone could significantly increase the value of the Wiluna Uranium Project. This will more accurately represent the potential mining volumes, production figures and economic/financial outcomes for the proposed stand-alone Lake Maitland mining and processing operation.

Once integration of the vanadium resource into the uranium resource block model is complete, SRK Engineers will begin the re-optimisation of the proposed mining pit before re-calculating potential production schedules and financial outcomes.

In addition to heightened uranium demand on the back of global support for nuclear energy, Toro says recent commitments by global companies including Microsoft, Google and Amazon to source nuclear energy to power their AI and data centres augers well for the industry.

Growing recognition of nuclear energy’s track record as a reliable source of safe, carbon-free energy globally, may trigger a global rethink around exporting uranium, especially in light of the international global push towards ‘net zero’ emissions.

Vanadium redox flow battery technology was first invented by the University of Sydney over two decades ago and the technology is now out of patent and available widely to the market.

While lithium is used in electric vehicles there is a general push on now for big vanadium batteries to be used to power large industrial sites or even residential subdivision.

Leading Perth property developer Nigel Satterley from Satterley Property Group recently told Bulls N’ Bears; “The industry is looking closely at how it can cut costs for homeowners and one of the things we are looking into is the potential of vanadium batteries to provide economical power to those homeowners in certain areas.”

And it seems the market likes the idea of integrating Toro’s two stellar resources too with the company’s stock up 5 percent today.

Is your ASX-listed company doing something interesting? Contact: matt.birney@wanews.com.au