Toro Energy shares soar 48%, ASX issues speeding ticket

Toro Energy (ASX: TOE) has caught the attention of investors this week with shares in the company leaping 48% to $0.12 in intra-day trade yesterday, up from $0.081 a week earlier.

The ASX therefore issued Toro with a price query speeding ticket, with the company it is not aware of any material information that has not been disclosed to the market, which may explain the sudden investor interest.

Toro has been very busy recently, and earlier in this week delivered some very interesting news to the market - with the company potentially positioned to benefit from any heavy rare earth discoveries on its tenements.

In a very strategic move, Toro executed an agreement with Northern Minerals (ASX: NTU) to initiate a new joint venture.

The agreement allows for Northern to explore for non-uranium minerals on seven of Toro’s wholly owned tenements in the Tanami region of the Northern Territory.

Northern intends to focus on heavy rare earth elements as part of its Browns Range project while Toro retains 100% of all uranium rights throughout the joint venture.


Terms of the joint venture

- The agreement allows Northern to earn up to 80% interest in non-uranium minerals in the tenements over a five year period in various stages;
- In the first stage, Northern has agreed to spend $4 million on exploration over the first three years to earn a 51% interest;
- In the second stage, Northern has the option to increase its interest to 70% by spending an additional $2 million over the following two years; and
- Finally, Northern has the option to complete a Bankable or Definitive Feasibility Study and lift its equity position in non-uranium minerals to 80% if Toro chooses not to contribute.

The tenements lie around the southern margin of the Browns Range Dome and, in particular, have substantial potential for unconformity style uranium.

Highlighting the prospectivity of the area, the single previous explorer, Japanese company, PNC Ltd, had identified a 20 kilometre long belt of geology that is directly analogous with that of the Alligator River Uranium Field, which hosts the Ranger and Jabiluka uranium deposits.

PNC created a sizable dataset that will enable Toro to fast-track its own uranium exploration in the area, which will also assist in the exploration for other commodities by the joint venture partners.


Toro remains very well-funded

Toro had $18.5 million in cash at the end of the September 2011 quarter.

Originally published at: http://www.proactiveinvestors.com.au/companies/news/23289/toro-energy-shares-soar-48-asx-issues-speeding-ticket-23289.html