Toro Energy's three new uranium tenements could add 4m pounds to resource base

Toro Energy (ASX: TOE) has finalised legal documentation with MPI Nickel Pty Ltd that formalises terms for the purchase of three key mining tenements adjacent to the Centipede deposit at Toro’s advanced Wiluna Uranium Project in Western Australia.
The "Millipede" uranium tenements could add 4 million pounds uranium to the company's resource base.
Toro is currently working on a JORC Resource update for the Wiluna Project and the company expects the three new tenements will constitute a portion of the revised consolidated resource when it is released at the end of this month.

On 17 February 2011 Toro announced it was acquiring a project called Millipede from MPI. Consideration for the tenements includes a A$4.5 million cash payment to MPI and 2% Net Smelter Return (NSR) style royalty in favour of MPI on production in excess of 4.5 million pounds (Mlb) uranium (U3O8) from the tenements.

MPI is a subsidiary of Norilsk Nickel Australia Pty Ltd and holds a 100% interest in tenements M53/590 and M53/693 and a 90% interest in tenement M53/336.

Millipede contains the tenements which have an exploration target in the range of 4–5 million pounds of uranium (U3O8) (1,800 tonnes-2,300 tonnes) at a grade similar to the Centipede and Lake Way deposits (0.04%-0.06% or 400-600 parts per million (ppm)).

While the uranium exploration target at Millipede is small by international standards, the acquisition is an important one for Toro and adds to the robustness of the Wiluna Uranium Project, which is currently focusing on the development of the Lake Way and Centipede deposits.

Wiluna has prefeasibility and optimisation studies completed and a definitive feasibility study underway. Toro has commenced the approvals process targeting the company’s first uranium production by late 2013.

Toro has purchased the mining tenements and associated database from MPI, while MPI has retained the rights to all non-uranium minerals (other than as a by-product of uranium mining of co-mingled ores).

One of the tenements (M53/336) is held in Joint Venture between MPI and Barrack Mines Pty Ltd, which is a wholly owned subsidiary of Grange Resources (ASX: GRR), with Barrack holding 10% equity.

Toro has concluded the acquisition of this 10% interest in M53/336 on the same terms on a pro-rata basis.

Originally published at: http://www.proactiveinvestors.com.au/companies/news/19964/toro-energys-three-new-uranium-tenements-could-add-4m-pounds-to-resource-base-19964.html