RealCap Uranium Research Report: Toro Energy

February 5, 2016

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A February 2016 RealCap Uranium Research Report highlighted Toro Energy Limited (ASX:TOE) and the Wiluna Uranium Project.

As quoted from the report:

Recent Announcements

On the 1st of February 2016, Toro Energy released another company announcement indicating a revision in their available uranium resources. This follows a similar announcement made on the 14 th of October 2015. Following on from extensive geological and geochemical work, the estimated total resources at the Wiluna Project site have increased by approximately 10%. This is in addition to the October announced increase of 20%. Again, in addition to the increase in total U3O8 resources, there is also an increase in the estimated grade of the deposit.

Balance Sheet Strength

Toro Energy has made excellent progress along the regulatory and environmental path to mining commencement over the last several years, but just as importantly, the management team have paid very close attention to the Toro Energy capital structure and balance sheet. Toro Energy has enviable balance sheet strength coupled with equity partners who are committed, longterm investors and not “hot money” speculators. On the 4th of November 2014, Toro Energy received a cash and asset injection from The Sentient Group, an independent private equity firm specialising in the global resources industry.

The Sentient Group manages of $2.7bn in global resource assets. In terms of the deal, Toro Energy received A$10m in placement proceeds (A$7.5m reflecting tranche 1 received in December 2014 and an additional A$2.5m as a tranche 2 payment received in June 2015). Also received were A$10m in unitisation funds earmarked for further development of the Wiluna project. On the 11th of June 2015, Toro Energy announced a key balance sheet restructuring backed by The Sentient Group. In terms of the deal, Toro Energy paid down the A$12million debt facility held with Macquarie Bank (ASX: MQG). The post-deal balance sheet is reflected below until the end of June 2015. Updated financial figures will shortly be made available by the company.

Outlook

We echo the outlook posted in earlier reports. Toro Energy continues to be an exceptionally well-managed pre-mining uranium exploration company. The combination of a strong balance sheet, prudent financial management, institutional shareholder base and enviable reserves and permitting advancement will allow Toro Energy to participate significantly in a uranium price rerating.

Investor Recommendations

We continue to hold a buy recommendation for Toro Energy and would encourage investors to build a position at current attractive price levels.

Connect with Toro Energy Limited (ASX:TOE) to recieve an Investor Presentation.

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Category: Energy