Toro Energy Limited An Emerging Uranium Producer Market, Projects - - PowerPoint PPT Presentation

Toro Energy Limited

An Emerging Uranium Producer

Market, Projects and Uranium Politics Sydney Mining Club – April 2008

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

Uranium Market Update T

• ro Energy Projects and

Exploration Australian Uranium Politics

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T

• ro Energy – Sydney Mining Club

From UxC Consulting – Jan 08 Uranium Market Outlook

Historical and Future Uranium Production

Uranium Market Fundamentals Strong

• 439 existing plants – significant upgrades &

efficiency improvements

• 34 under construction in 11 countries, 90

under planning, 200 additional proposed

• Eight new nuclear plant applications in

USA

• UK, Japan, China, Russia, Scandinavia,

Canada, etc planned nuclear expansion

• New potential plants – Turkey, Egypt, etc
• Uranium production issues – optimistic

projections on start-ups and expansions

• African & Eastern Europe production push
• Many Australian resources politically

constrained

• Spot price varying US$70 to 90 – long term

price remains firm at US$95

Uranium Market Fundamentals Strong

• Physical reality – stable long term

price at US$95

• Increased long term contracting –

quantity and duration

• Spot price – barometer of short

term sentiment

• Spot volume declines at higher

spot prices

Uranium Market Fundamentals Strong

• Prices being forecast to remain +US$80 per lb out to 2014
• Needed to ensure production replaces the declining secondary

supplies

2006 All sources of Uranium

(73,289t U3O8)

63% 14% 11% 4% 8%

Existing mines Planned mines FSU supplies HEU feed USEC Other

2015 All sources of Uranium

(100,371t U3O8)

57% 32% 6% 5%

Existing mines Planned mines FSU supplies HEU feed USEC Other

Source UxC Consulting – Jan 07 Uranium Market Outlook

Increase in Uranium Supply – Current to 2015

Greenhouse Gas Emissions from Electricity Production

289 176 113 77 236 4 280 100 48 10 21 9 1017 790 575 362

200 400 600 800 1000 1200 1400

grams CO 2 equivalent

Indirect, from life cycle Direct emissions from burning

Source: IAEA 2000

Twin bars indicate range

Coal Gas Hydro Solar PV Wind Nuclear

Nuclear Power Cost Competitive

Depending on location

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T

• ro Energy Limited

High Level History

Toro ASX listing March 2006 from Oxiana and Minotaur Exploration uranium

assets

Napperby Option Agreement with Deep Yellow, July 2007 [Option based on

13.2mlb U3O8]

Nova Energy merger completed December 2007 [JORC Resources 19.8mlb U3O8]

Capital Structure

494.67m issued shares (incl. 72m escrowed

to Mar 08)

10.07m unlisted options Market Cap. ~A$124m@A$0.25/share

(~US$112m)

In under 2 years Toro has evolved from a South Australian focused uranium explorer to now having 20mlb U3O8 JORC resource in 2 potentially economic deposits in the Northern Territory and Western Australia, along with exploration in 3 Australian states and 3 African countries.

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Corporate Overview

13 LAKE WAY & CENTIPEDE PROJECT 20mlb JORC resource. Scoping studies confirm potential for production

• f ~750t/pa U3O8

(1.6mlb per annum) @ A$28/lb. Pre-feasibility studies now underway. IOCG PROJECT Targeting Olympic-Dam style mineralisation proximal to Prominent Hill, SA. GUINEA Proterozoic sandstone hosted uranium. NAMIBIA Targeting Rossing-style bedrock mineralisation And extensions of Langer Heinrich palaeo-valley. MOROCCO Haute Moulouyament project is hard-rock sandstone hosted target. NAPPERBY PROJECT 1.5mlb JORC resource Extensive mineralised system at 3-6m depth. Resource extension underway. ESPERANCE, GAWLER CRATON & WARRIOR PROJECTS Targeting lignite-bearing palaeochannels in SA & WA.

Geopolitical Diversity: Focused on exploration and development throughout Australia and Africa Experienced Board – Founding Directors + Oxiana + ex Nova

Corporate Overview

AMADEUS BASIN Exploring for Palaeozoic roll-fronts south of Alice Springs.

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JORC Inferred Resources Tonnes (m) % U3O8 kg/t U3O8 lb/t U3O8 Contained U3O8 (t) Contained U3O8 (mlb) Lake Way 8.51 0.054 0.54 1.19 4,600 10.12 Centipede 7.00 0.063 0.63 1.38 4,400 9.68 Wiluna Project Total 15.51 0.058 0.58 1.27 9,000 19.80 Napperby 1.9 0.036 0.36 0.79 670 1.47

Total 17.41 0.056 0.56 1.23 9,670 21.27

Corporate Overview

JORC Resource Inventory : Expandable in the short to medium term

Resource Expansion at both Wiluna and Napperby possible in the short-medium term (1-2 years) Medium Term Potential at Wiluna ~ targeting 12,000t U3O8 – 25mlbs Medium Term Potential at Napperby ~ targeting 6,000t U3O8 – 13mlbs

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Warrior Project, SA IOCGU SA Palaeochannel

Centipede – Lake Way Napperby Warrior Project , Guinea, Namibia Calcrete, SA IOCGU SA & WA Palaeochannel, Namibia Alaskite, Morocco Sandstone, WA Meekatharra, NT-WA Palaeozoic Sandstones

Greenfields Exploration Advanced Exploration Resource Definition & Scoping Studies Feasibility Studies & Regulatory Approvals Production

2006 Assets on Toro ASX listing 2008 Assets post Toro-Nova Merger

Corporate Overview

The Toro Project Pyramid

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Projects

Napperby Uranium Project

Current 1.5mlb JORC under evaluation and extension Scoping study to commence 2008

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Toro has Option to purchase 100% of project at capped price on per lb resource basis from Deep Yellow. Valuable infrastructure (sealed road from Alice Springs, nearby gas pipeline, rail to Darwin port) Exploration Agreement with CLC in place The Northern Territory is politically favourable for uranium mine development and

• perations

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Napperby Uranium Project

Focused on converting historical resources to JORC standards

Currently 1.5mlb U3O8 resource under JORC @ 0.04%. Targeting estimated 13mlb historic mineralisation defined by Uranerz. Additional drilling and two resource extensions planned this year. Close to surface (<10m) with strip ratio circa 1:1.

Napperby Uranium Project

Evaluating most effective drilling methods Fast track resource expansion – up to 15 people employed Piling Rig (Auger) MiniSonic Core Rig

• 300mm diameter holes
• large sample
• dry and split
• potential bulk sampling
• coring unconsolidated sediment at >90% recovery
• qualitative data for geological model and met

testing

• good drilling rate for long term applications

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Napperby Uranium Project

Recent Drill Program Results Confirm Historical Mineralised Zone

• Consistent mineralised intersections at shallow

depth (<10m)

• Bulk of assays in the range 200 to 700ppm (0.02%

to 0.07%) U3O8

• Assays averaging ~550ppm (0.06%) U3O8 at

200ppm cut-off

• Individual assays ranging up to 2,070 ppm

(0.21%) U3O8

• Mineralised width averaging 1.3m at 3m to 7m

depth below surface

• Undertaking QA & QC controls, and awaiting

additional assays for release and resource calc – est May 2008

• Second drilling program commencing May 2008

• 15 staff, consultants and drilling-related contractors
• External contractors for airborne geophysics & biogeochemistry
• Local content includes accommodation (Tilmouth), mining supplies, sampling

crew, hire vehicles, transport and construction (Alice Springs)

• Regular update meetings with Alice Springs Council, Central Land Council and

local Members

• Indigenous stakeholder interaction

Radiation information sessions at CLC Site anthropological clearance Traditional Owners site visit during drilling

• Information session with local pastoralists

Napperby Uranium Project

Working with local stakeholders

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Proposed Plant Location

Data relating to the determination

• f mineral resources was

compiled by Ashley Jones BSc (Hons), MAusIMM and David Princep BSc, MAusIMM, both of whom have more than five years experience in estimation of mineral resources and ore reserves, with David Princep being the competent person under the JORC code in respect to uranium deposits.

Wiluna Uranium Project

Comprising Lake Way & Centipede deposits Pre-feasibility Study Underway - Completion May / June 2008

Tonnes (m) kg/t U3O8

Contained

U3O8 (t)

Contained

U3O8 (m lb) Lake Way 8.51 0.54 4,600 10.12 Centipede 7.00 0.63 4,400 9.68

Total 15.51 0.58 9,000 19.8

Inferred Resource Prepared in Accordance with the JORC Code.

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Wiluna Uranium Project

Toro continues to move the project forward and is involved in increasing education and community debate around uranium

Project Attributes

• Significant JORC Resource potentially expandable to >12,000t U3O8
• Close to surface (<10m) with strip ratio circa 1:1
• Proximal to extensive infrastructure

sealed road water borefield gas pipeline electricity Wiluna township and airstrip historically mined out pits (tailings storage)

• Positive Scoping Study in 2006
• Multiple mining methods possible

(truck and shovel, continuous miner and dredging)

• Environmental baseline and community

consultation already underway

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Wiluna Uranium Project

Potential Development Timeline

Key Tasks

Additional drilling at both Lake Way and Centipede

• JORC Resource update underway
• Completion of Pre-feasibility study

Active engagement of local stakeholders

• Political consultation, education and engagement – influencing State Government uranium mining

policy

• Establishment of ‘worlds best practice’ in operations and development proposals
• Project consolidation
• Early discussions with nuclear

utilities underway

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Exploration

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Overview

Toro is active in Australia and Africa

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Namibia

Prime exploration ground in Western Namibia

Paladin Energy: Langer Heinrich Bannerman: Goniakontes

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Northern T erritory & Western Australia Regional Exploration

Strong focus on politically favourable jurisdictions and uranium mining experience of the South Australia and Northern Territory ‘corridor’.

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South Australia: Iron-Oxide Copper Gold

IOCGU exploration focused around Prominent Hill, South Australia

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2008 Activity and News Flow

• Napperby Project JORC Resource expansion (May 2008 and ~Nov 2008)
• Napperby Project scoping study (2008 H2)
• Wiluna Project - JORC Indicated Resource definition and pre-feasibility (May

2008)

• Warrior Project – Advanced exploration results (June 2008)
• Namibian exploration results 1H 2008
• Regional exploration for IOCG targets by Oxiana adjacent to Prominent Hill

(drilling 2008)

• Regional exploration, Lake Mackay and other NT greenfields opportunity

(2008)

Key Activity & News Flow

Near-term activity on exploration and development projects

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Australian Uranium Politics

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Australian Uranium Mines

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History

• Uranium discovered at Rum Jungle, Radium Hill, Mt Painter, numerous other

small deposits

• Early mines for radium, UK and US military and nuclear programs – also

potential Australian power program

• World uranium price US Govt controlled until late 1960’s
• Australian Govt floor price until the late 1980’s
• Last Australian Govt uranium stockpile sold early 1990’s
• Initial commercial mines – Mary Kathleen (QLD), Narbelek (NT), Ranger (NT),

Olympic Dam (SA), Beverley (SA)

• 1983 Federal Labor Govt Three Mine Policy (Ranger, Narbelek, Olympic Dam)
• 1996 Federal Coalition Govt allows new mines (Beverley)
• Federal Labor Opposition modification to a “no new mines” policy
• Up to 2007 – some State Labor Govts voiced need for change

Australian Uranium - Politics

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Australian Uranium - Politics

Current Situation

• 2007 Federal Labor Opposition changes policy to allow

new uranium mines to follow approval process – will approve contracts with countries who are signatories to the NPT

• Following this, SA and NT Labor Govts change policy

and now support uranium mining and new mines – Tas appear to support (uncertain)

• Currently WA and QLD have state policies not to allow

uranium mines to commence

• NSW and Vic have legislation preventing exploration or

mining

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Nuclear Power not currently being considered by Australian Federal and State Governments

• Not an issue for uranium mining as we have a global marketplace, but disappointing

Nuclear Power favoured by other countries for limiting carbon emissions from energy production and for energy security

• 439 current nuclear plants globally - 34 under construction – represents current U demand
• 290 planned or proposed - Over 100 countries to continue or consider nuclear power
• UK, Japan, Finland, Canada – latest countries to advocate expansion of nuclear for energy

supply while combating and reducing greenhouse Japanese Government Statement – “Huge Scope For Nuclear Expansion”

• METI Cool Earth 50 program for developing energy related technologies
• Targeted to halve global greenhouse emissions by 2050
• Involves 21 technologies with roadmaps for their development
• Substantial contribution from advanced nuclear power – about five times current level
• Would create annual global reduction of 10 billion t CO2 per year
• Japan - founding shareholder of Energy Resources of Australia’s Ranger uranium mine,

with continuous contracts with Australian uranium suppliers for 28 years

Australian Uranium - Politics

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Only two Australian regions currently allow uranium mining

• Federal Labor now allows new uranium mines to follow due process for Federal approval
• South Australia and the Northern Territory to be commended for their pro-active

understanding of the modern nuclear and uranium industry, and similarly allowing new uranium mines to proceed through approvals

• Western Australian and Queensland policies appear out of date, and not in line with the

modern uranium and nuclear business

• WA and QLD uranium deposits combined could produce over 9,000t U3O8 per annum

– effectively doubling Australia’s current annual uranium output Japan, UK, Korea, Canada, France, USA, Finland, Sweden, Taiwan, Spain, Germany, China – all are relying on Australian uranium to produce energy while limiting greenhouse emissions – all are effectively being cut out of 50% of Australia’s potential uranium production If Australia is going to play a key role in global greenhouse and carbon emission politics, it will need to consider the view of these countries on our “confusing mixed bag” of state uranium policies

Australian Uranium - Politics

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TORO ENERGY LIMITED ASX CODE : TOE www.toroenergy.com.au