helmsec’s annual mining forum - toro energy03... · this presentation has been prepared by toro...
TRANSCRIPT
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Hong Kong
24 March 2011
Helmsec’s Annual Mining Forum
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This presentation has been prepared by Toro Energy Limited (“Toro”). The information contained in this presentation is a professional opinion only and is given in good faith. Certain information in this document has been derived from third parties and though Toro has no reason to believe that it is not accurate, reliable or complete, it has not been independently audited or verified by Toro.
Any forward-looking statements included in this document involve subjective judgement and analysis and are subject to uncertainties, risks and contingencies, many of which are outside the control of, and maybe unknown to, Toro. In particular, they speak only as of the date of this document, they assume the success of Toro’s strategies, and they are subject to significant regulatory, business, competitive and economic uncertainties and risks. Actual future events may vary materially from the forward looking statements and the assumptions on which the forward looking statements are based. Recipients of this document (“Recipients”) are cautioned to not place undue reliance on such forward-looking statements.
Toro makes no representation or warranty as to the accuracy, reliability or completeness of information in this document and does not take responsibility for updating any information or correcting any error or omission which may become apparent after this document has been issued.
To the extent permitted by law, Toro and its officers, employees, related bodies corporate and agents (“Agents”) disclaim all liability, direct, indirect or consequential (and whether or not arising out of the negligence, default or lack of care of Toro and/or any of its Agents) for any loss or damage suffered by a Recipient or other persons arising out of, or in connection with, any use or reliance on this presentation or information. All amounts in A$ unless stated otherwise.
Disclaimer
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Investment Proposition
Toro Energy Ltd is a uranium focused Australian resources company.
Principal assets include:
• 100% of the expanding 31mlb* U3O8 Wiluna Uranium Project, including the Lake Way-Centipede deposits currently under Definitive Feasibility Study;
• 40,000km2 exploration portfolio in uranium friendly jurisdictions, including 100%
of recent uranium discovery “Theseus“ project, Lake Mackay, WA.
With the recent ERMP (EIS) submission for Lake Way-Centipede, Toro remains on track to achieve first uranium production from the Wiluna Uranium Project in 2013.
*See resource statement slide 14.
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The Company and the Uranium Market
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Toro’s Corporate Evolution
• South Australia Greenfield exploration • $18m raised on ASX float • Pro-forma market cap $36m
• 31mlb* U3O8 Wiluna Project & exploration • $36m cash • Current Market Capitalisation ~$116m
*See resource statement slide 14.
Exploration Focus SA Palaeochannel
Exploration Focus WA&NT
Sandstone/ Unconformity/ palaeochannel
Wiluna Project Development ERMP submitted DFS in progress
March 2006 March 2011
Mt Woods Uranium Rights
OZL exploration focus
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Toro Today
Capital Structure Exchanges ASX: TOE Share Price (21 March 2011) A$0.12 Options (unlisted) 21.69m
Shares 964.95m Fully Diluted Market Cap A$116m
Cash (Dec 31 2010) A$36m Debt Nil Enterprise Value A$80m
12 Month High / Low A$0.18 / $0.07
Largest Shareholder – OZ Minerals Ltd 42.5%
The Board
Erica Smyth Non-Executive Chairman
Greg Hall Managing Director
Derek Carter Non-Executive Director
Peter Lester Non-Executive Director
John Nitschke Non-Executive Director
Andrew Coles Non-Executive Director (OZ Minerals)
Management
Greg Hall Managing Director
Todd Alder General Manager – Finance & Corporate
Richard Dossor General Manager – Wiluna Project
Mark McGeough General Manager – Exploration
Simon Mitchell General Manager – Business Development
Richard Yeeles Approvals and Community Director
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Share Price Graph
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Share Price Graph: From 1 September 2009
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Achievements Since Capital Raising
Signs Letter of Intent with Norilsk re acquisition of
Millipede (4-5mlb exploration target)*
Dawson-Hinkler Well Project (6.2mlb JORC Resource) Acquisition
Theseus Discovery – first uranium project at Lake
Mackay
Firestrike Uranium Discovery acquired.
Agreement to acquire tenements, pastoral stations and Houses
in Wiluna District
Resources Test Pit completed
Environmental Scoping
Document Approved
…A$61m raised at $0.15/share 2009Q4
*NOTE: The total potential tonnage and grade is conceptual in nature, and Toro needs to determine whether there has been sufficient exploration to define a Mineral
Resource, and while Toro has confidence in this target statement, it is uncertain if this work will result in the determination of a Mineral Resource. See slide 13 for details.
Wiluna Project ERMP (EIS) Submitted
0
50
Mill
ion
s
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Toro Assets
Exploration footprint Northern Territory,
South Australia, Western Australia With key project at
Theseus (Lake Mackay) Exploration JV
Namibia 25% Equity
31mlb* U3O8 @ Wiluna Project
With ERMP (EIS) submitted and under DFS
*See resource statement slide 14.
Mt Woods, SA Uranium Rights OZL Exploration
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Uranium Market: where to now?
Ux U3O8 Spot Price/
LT Price: (18/3/11)
$50.00/ $73.00/lb
Trade Tech Spot/ Mid
T/LT Price : (18/3/11)
$53.00/ $75.00/$70.00
Nations indicating clear
support for nuclear:
Belarus
China
India
France
Poland
Russia
South Africa
South Korea
Sweden
US Subsequent to the tsunami induced nuclear incident in Japan, several key countries have re-affirmed their commitment to nuclear power although
most will review their safety procedures.
*Source: UxC and TradeTech
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The Wiluna Uranium Project
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Wiluna Uranium Project: Overview
• Mining – shallow (generally
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Wiluna Uranium Project: Footprint
…Millipede Project acquisition in process (exploration target
4-5mlb U3O8 )*
…Lake Way JORC Resource 12.6mlb# U3O8
…Centipede JORC Resource 11.8mlb# U3O8
…Firestrike Project (exploration target)
…Dawson-Hinkler Well JORC Resource 6.2mlb# U3O8
…Albion Downs Project (exploration target)
*NOTE: The total potential tonnage and grade is conceptual in nature, and Toro needs to determine whether there has been sufficient exploration to define a Mineral Resource,
and while Toro has confidence in this target statement, it is uncertain if this work will result in the determination of a Mineral Resource. See slide 13 for details.
#See resource statement slide 14.
…Dawson West Extension (exploration target)
New Toro Leases
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Wiluna Uranium Project: Millipede
…Millipede Project acquisition in process
Exploration Target Range*
Tonnes
Mt
Grade
%
Grade
ppm
Contained Uranium
t
Contained
Uranium, Mlb
4-6 0.04-0.06 350-550 1,800-2,300 4 – 5
*NOTE: The total potential tonnage and grade is conceptual in nature, and Toro needs to determine whether there has been sufficient exploration to define a Mineral
Resource, and while Toro has confidence in this target statement, it is uncertain if this work will result in the determination of a Mineral Resource.
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Resource Grade* Contained U3O8#
As at Dec 2010 Category Mt ppm % U3O8 tonnes Mlbs
Centipede, WA Measured 0.3 588 0.059 176 0.4
Indicated 7.7 619 0.062 4,754 10.5
Inferred 1.7 251 0.025 424 0.9
TOTAL 9.7 554 0.055 5,355 11.8
Lake Way, WA Inferred 10.5 543 0.054 5,718 12.6
TOTAL 10.5 543 0.054 5,718 12.6
Dawson-Hinkler, WA Inferred 9.50 293 0.029 2,800 6.2
TOTAL 9.5 293 0.029 2,800 6.2
WILUNA TOTAL 29.71 467 0.05 13,870 30.6
*200ppm cut-off # Refer Competent Persons Statements, Page 33
Wiluna Uranium Project: Resources
Near Term Objectives
o Expansion of Centipede & Lake Way resource & conversion of Lake Way Resource to Indicated
o Redefinition of Dawson-Hinkler Resource with Uniform Conditioning
o Addition of resources from Firestrike, Albion Downs and Millipede
…grade to be reviewed after resource re-definition using Uniform Conditioning
…new geological interpretation, potential resource extension
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• Ore is within hypersaline water table
• Pump control requirements determined
• Geopolymer barrier to limit water ingress
• Gamma logger with GPS to map pit floor
• Vermeer continuous miner demonstrated
• Rapid mining advance on 30cm benches
• Cyclone system to control dust
• Bulk sample taken for pilot plant testing
Wiluna Uranium Project: Trial Mining
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Wiluna Uranium Project: Conceptual Mine Scheduling
Year 1 Year 2 Year 3
Year 4 Year 5 Year 6
Year 7 Year 8 Year 9
Mining
and
Void
Tailings
Storage
Rehab
1 kilometre
Waste
Stockpile
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• Proven by Yeelirrie Pilot Plant in 1980’s
• Toro update lab work in 2007, 2009 & 2011
Wiluna Uranium Project: Process Flow-sheet for Alkaline Tank Leach
• Bulk sample taken from test pit
• Pilot plant test work in March/April 2011
• Processing 1.3 Mtpa
• Average head grade 668ppm U3O8
• Recovery ~86%
• 1000t U3O8 product p.a
• Capital cost ~$260M
• Project life 10-15 years
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• Wiluna Resource Upgrade & Optimisation Study
• Regional Consolidation (Millipede, Dawson-Hinkler, Firestrike, Albion Downs)
• Trial Mining/ Test Pit completed
• Environmental Scoping Document & Environmental Review & Management Plan
• Completion of Pilot Plant Process Testwork In process, due 2011q2
• JORC Resource Update In process, due 2011q2
• Definitive Feasibility Study In process, due 2011q4
• Financing In process, due 2012q1
Wiluna Uranium Project: Milestones
2009 2010 2011 2012 2013
Approvals
Metallurgical Testing / Pilot Plant
Bankable Feasibility Study
Indigenous Consultation
Off-take Agreements/ Financing
Decision to Construct
Design and Construct
Commissioning & Production
…project development decision in 2012
…first production targeted for 2013H2
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Wiluna Uranium Project: UxC Classification, Uranium Suppliers Annual
Primary Producers Planned Producers Junior/ Exploration
AREVA Alliance Resources Ltd A Cap Resource Ltd
ARMZ Aurora Energy Resources African Energy Resources
BHPB (Olympic Dam) Bannerman Resources Ltd Aura Energy Ltd
Cameco Corp Berkeley Resources Ltd Black Range Minerals
Denison Mines Corp CF Industries Inc Canalska Ventures
General Atomics Energy Fuels Inc Cauldron Energy
Kazatomprom Extract Resources Ltd Crosshair Exploration and Mining Corp
Mestena Uranium LLC First Uranium Corp Curnamona Energy Ltd
Navoi MMC Forsys Metals Corp Deep Yellow Ltd
Nufcor Mantra Resources Ltd Energy & Minerals Australia
Paladin Energy Ltd Peninsula Minerals Ltd Energy Metals Ltd
Rio Tinto / ERA Powertech Uranium Corp Forte Energy NL
Uranium Energy Corp [New Entrant] Shiva Uranium Pty Ltd Greenland Minerals and Energy
Uranium One Inc Strathmore Minerals Hathor Exploration Ltd
Toro Energy Ltd Homeland Uranium Inc
Tournigan Energy Ltd Impact Minerals Ltd
UEX Corp Khan Resources Inc
Uranium Resources Inc Laramide Resources Inc
Ur-Energy Marathon Resources Ltd
Uranerz Energy Corp Mega Uranium Ltd
White Canyon Uranium Ltd + more than 60 other junior companies
....Toro Energy
classified as
“Planned Producer”
....scheduled for
2013
2007 - 2010
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• Significant Australian deposit, a Tier 1 supply country
• Supportive State and Federal Governments
• Good infrastructure and mining friendly location
• Mine life recently extended by regional consolidation
• One of the most advanced new uranium projects in Australia
Wiluna Uranium Project: Strengths
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Exploration
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Australian Exploration Projects
Birrindudu Project (WA) JV with Cameco (TOE 50.01%)
Reynolds Range Project (NT) Redox front target
Lake Mackay (WA)
Theseus Palaeochannel
Uranium Discovery
IOCGU targets (Olympic Dam
style)
Mt Woods Uranium Rights (SA) OZ Minerals conducting >$75m
exploration program
Tenements by State
Granted km2
Application km2
South Australia
5,976 0
Northern Territory
9,261 19,240
Western Australia
5,334 375
Totals 20,571 19,615
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Lake Mackay Project (WA): Theseus
Approximate footprint of Four Mile East/West
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Birrindudu (WA) – Cameco JV (TOE 50.01%)
…Birrindudu, significant alteration zone intersected
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Reynolds Range (NT) – Toro 100%
…Reynolds Range, defined redox front
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Mt Woods (SA): Uranium Rights
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Toro has a uranium rights agreement on OZ Minerals Ltd (OZL) exploration properties adjacent to Prominent Hill mine.
OZL are spending >$70m per annum on exploration in and around Prominent Hill.
OZL mobilised 13 drill to the region/ Prominent Hill project.
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Namibia: Deep Yellow JV (TOE 25%)
.... “Alaskite Alley”
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Looking Ahead
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Toro Strategy
“To become a significant sustainable uranium mining company focusing on developing a top tier exploration and
production profile in the global uranium mining sector generating superior shareholder returns.”
“Significant”
production of greater than 2.2mlb (1,000t) U3O8 pa by 2015
production of greater than 5.5mlb (2,500t) U3O8 pa by 2020
“Sustainable”
a JORC Resource greater than 100mlb (45,000t) U3O8 by 2015
a JORC Resource greater than 220mlb (100,000t) U3O8 by 2020
Toro’s quantitative strategic targets imply organic growth or by acquisition.
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2011 : More Drilling!
Wiluna Regional
Commence Drilling in new areas 4000m
Mt Woods
Plan to drill at Taurus target 1000m
Lake Mackay Project
Theseus Prospect 8000m
IOCGU targets Lake Mackay 1500m
Birrindudu JV
Complete RC Drilling 4000m
Reynolds Range
Complete RC Drilling 2000m
Ngalia Basin
Start Drilling 1000m
Total Drilling Planned >20,000m
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News flow and value add
Lake Mackay Project
Drilling of the Theseus Prospect (6000m)
Drilling of IOCGU targets in southern Lake Mackay (1500m)
Birrindudu JV
Complete RC Drilling (2000m)
Reynolds Range
Complete RC Drilling (2000m)
Ngalia Basin
Start Drilling (1000m)
Wiluna Regional
Commence Drilling in new areas (3000m)
Mt Woods
Plan to drill at Taurus target (1000m)
More drilling! Wiluna Uranium Project – progressing approvals and the DFS
• Pilot plant test work results 2011q2
• JORC Resource update 2011q2
• Definitive feasibility study concluded 2011q4
• Product marketing, project finance, strategic partner/ investor search 2012q1
Exploration initiatives – extensive drilling (>20,000m of follow-up)
• Lake Mackay – drilling the new Theseus uranium discovery 2011q2
• Birrindudu/ Reynolds Range – follow up drilling 2011q3
• Leverage Wiluna Project expertise to assess broader regional opportunities 2011q4
Market fundamentals - long term uranium demand fundamentals remain strong
• Significant construction pipeline - demand drivers
• Delayed new supply/ production issues - supply drivers
• Long term pricing has returned to ~US$70/lb U3O8 supporting new projects
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Simon Mitchell General Manager – Business Development
Toro Energy Limited Corporate Office 3 Boskenna Avenue NORWOOD South Australia 5067 Telephone: +61 8 8132 5600 Facsimile: +61 8 8362 6655 Email: [email protected] Website: www.toroenergy.com.au
Contact
mailto:[email protected]://www.toroenergy.com.au/
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The information in this report that relates to Mineral Resources at Lake Way and Centipede is based on information compiled by Mr Daniel Guibal who is a Fellow of the Australasian Institute of Mining and Metallurgy (AusIMM). Mr Guibal is a fulltime employee of SRK Consulting and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity he is undertaking to qualify as a Competent Persons as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Guibal consents to the inclusion in this release of the matters based on his information in the form and context in which it appears.
The information in this report that relates to Mineral Resources at Dawson-Hinkler Well is based on information compiled by S. Mann MAusIMM , S. Gatehouse MAIG and A. van der Heyden MAusIMM. Messrs Mann, Gatehouse and van der Heyden have sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as a Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Mann is a full-time employee of U3O8 Limited. Messrs Gatehouse and van der Heyden are employees of Hellman & Schofield Pty Ltd. Each of the above named consents to the inclusion of the information in this announcement in the form and context in which it appears.
Information in this report is based on Exploration Results compiled by Mr Mark McGeough who is a Member of the Australasian Institute of Mining and Metallurgy. Mr McGeough is a full-time employee of Toro, and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr McGeough consents to the inclusion in this release of the matters based on his information in the form and context in which it appears.
Information in this report is based on information compiled by Mr Craig Gwatkin who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Gwatkin is a full-time employee of Toro, and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Gwatkin consents to the inclusion in this release of the matters based on his information in the form and context in which it appears.
Competent Persons Statements
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Appendix
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Knowledge, experience and delivery – the right balance
Board of Directors
Greg Hall Managing Director 30+ years resource sector experience, including 21 years uranium (Ranger, Jabiluka & Olympic Dam) and uranium marketing (ERA North America)
Dr Erica Smyth Non-Executive Chairman 30+ years experience in the mineral and petroleum industries
Peter Lester Non-Executive Director Extensive experience in senior operating, development and corporate roles with Newcrest, North, CRA and MIM
Derek Carter Non-Executive Director Geologist with over 30 years experience in corporate management, exploration and mining
John Nitschke Non-Executive Director Mining engineer with 35+ years experience in the resources industry in mining operations and project management
Andrew Coles Non-Executive Director Currently CFO of OZ Minerals Ltd, previously Treasury roles at Esso, Exon Mobile and Zinifex
http://www.toroenergy.com.au/_webapp_11988/Greg_Hall_BEng
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Deep experience in uranium operations, exploration & development
Management Team
Greg Hall Managing Director 30+ years resource sector experience, including 21 years uranium (Ranger, Jabiluka & Olympic Dam) and uranium marketing (ERA North America)
Simon Mitchell General Manager, Business Development 20+ years international resource development expertise including 10 years as an exploration/ development geologist
Mark McGeough General Manager, Exploration 25+ years geological & exploration expertise, including uranium
Todd Alder General Manager, Finance & Corporate 16+ years financial management experience within the Mining, Energy and Steel Manufacturing industries
Richard Yeeles Approvals and Community Director -Wiluna Extensive management experience in government/ community relations, ex-BHPB Olympic Dam Expansion
Richard Dossor Project Director – Wiluna Extensive experience in design, procurement construction of development projects
http://www.toroenergy.com.au/_webapp_11988/Greg_Hall_BEnghttp://www.toroenergy.com.au/_webapp_51130/Mr_Todd_Alder
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• Commonwealth Government
– Fully supportive
– Environmental and export approval
– Proliferation and security
• State Governments
– Supportive in WA, SA and NT (Toro activity area)
– Environmental and mining approval
– Health, safety and transport
Australian Political Context
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Wiluna Project: Agitated Tank Leach