Australian uranium exploration and development firm Toro Energy (ASX:TOE) entered into a binding term sheet for the acquisition of the Lake Maitland uranium project in Western Australia from Mega Uranium (TSX:MGA) for 415 ordinary shares of Toro, or A$36.9 million.
Lake Maitland is located 90 kilometers away from Toro’s flagship Wiluna uranium project in Western Australia. Once in production, the Wiluna uranium project will be Australia’s first producing uranium mine since it was granted environmental approval earlier in 2013. Toro’s acquisition of Lake Maitland will expand Wiluna’s uranium resource by 42 percent, bumping the resource from 54 million pounds of U3O8 to 76 million pounds of U3O8. the increase in resource for Toro could potentially boost the mine life at Wiluna to 20 years.
Toro is looking to start production at Wiluna in 2016. However, the company needs to raise capital for the project in order to complete a Definitive Feasibility Study for the project.
Toro’s managing director, Vanessa Guthrie told ABC News, explained that the Lake Maitland project “still requires government environment approval, so it’s at least a two to three year approval process ahead of us, but that is well within sufficient time that we can establish Wiluna project production for 2016.”
A move of desperation?
While the move might seem like a good one for Toro Energy, there are some industry players that have labelled the acquisition of Lake Maitland as a sign of a troubled uranium industry.
The Conservation Council of Western Australia has dubbed Toro’s purchase of Mega Uranium’s property one bred out of desperation. Mia Pepper, nuclear-free campaigner for the CCWA believes that Toro’s acquisition of Lake Maitland is a sign that uranium companies aren’t doing too well and as a result are banding together.
“I think this move shows that both Toro and Mega are in a difficult spot, they’re not getting any traction, they’re not finding any financing and neither of them have a big enough uranium deposit to start a mine,” she said.