When it comes to uranium Australia is listed as one of the top producing countries. With three uranium producing mines currently in operation, including BHP Billiton’s (ASX:BHP) Olympic Dam, which interestingly enough produces uranium as a by-product to its copper, it’s impressive that the country is ranked third in the world in terms of uranium production.
But don’t let the scant number of producing uranium mines deter you. Australia has big plans when it comes to uranium mining, with several companies advancing projects.
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“Australia has been exporting uranium for over 30 years from dominantly three production mines – Olympic Dam, Ranger and Beverley – to produce some 10% of world supply today.” Toro Energy (ASX:TOE) Managing Director Vanessa Guthrie told Investing News Network. “More importantly, Australia is endowed with over 30% of the world’s uranium resources, and is poised to take advantage of the current growth in the Asian energy demand. To do this, Australia must open new uranium mines to replace the maturing mines. The industry is well positioned to meet this challenge with four new projects in the project development pipeline.”
One of those projects is Toro’s Wiluna project in Western Australia. Toro recently announced an increase to Wiluna’s mineral resource estimate to 84 million pounds of uranium with a high grade component of 40 million pounds of uranium, to which Guthrie noted “demonstrate[s] that the Wiluna Project has more to give when it comes to the resource quality than has been previously anticipated.”
The new resources “gives [Toro] the opportunity to develop a new mining plan to take advantage of the continuous high grade lenses.” Guthrie said, adding that the company expects the high grade component to further improve the project’s economics.
Given the resource update, Guthrie explained that Toro will be “rerunning the mining schedule” in order to incorporate the improvements the the resources. From there, the company “will look into the positive impact the grades can have on the processing circuit through our optimization studies.”
As any uranium market watcher knows, the uranium market is in a period of significant and sustained depression. And though all the fundamentals indicate that prices should be making their way up the charts, the market has yet to react positively.
Still, as Guthrie noted, “the forecast demand for uranium to meet the committed growth in nuclear power generation capacity — particularly in Asia — creates a supply shortfall which emerges in the market from 2018 onwards.”
With a shortfall in supply imminent, “there is a positive outlook for new mines to bring new production to market towards the end of this decade,” making it a prime time to develop a project that will be able to meet the rise in demand when the time comes.
Toro Energy has a lot of work to do if it wants to make good on its aspirations to be Australia’s next uranium producer.
When asked what the investors can expect from Toro moving forward, Guthrie said that to start, the company is “continuing to secure our environmental permits for the Millipede and Lake Maitland deposits to extend those permits we already have for the mine.”
Toro is also in the midst of “finalizing an agreement with the local Aboriginal people,” as well as “pursuing optimization studies in the process circuit to take advantage of the new grade resource.”
On top of the operational plans, Guthrie also highlighted that Toro is continuing “to focus on our potential customer countries in Asia to secure a strategic partner to develop the project.”
Securities Disclosure: I, Vivien Diniz, hold no investment interest in any of the companies mentioned.
Editorial Disclosure: Toro Energy is a client of the Investing News Network. This was not paid-for content.
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