Toro Energy: new resource and exploration drilling commences

Toro Energy recently announced two new drilling programmes on its key Wiluna Project asset and on the Wiso Basin held jointly with Areva Australia Resources. Both drilling programmes are positive news for Toro Energy and show a continued ability by Toro Energy management to proactively steer the company through a challenging period for the uranium mining industry.

Exploration Drilling

The Wiso Basin Project is located in Australia’s Northern Territory and comprises, together with Theseus, Toro Energy’s two Australian-based exploration projects. On the 29th of September 2014, Toro Energy announced it has entered into a Joint Venture agreement with Areva Resources Australia, the subsidiary of Areva (PSE: AREVA) to collaborate on exploration of the Wiso Basin. In terms of the JV, Areva undertook to commit A$500 000 within two years of the agreement for a 51% interest and has the option to spend an additional A$1.5 million over the following four years for a further 29% interest. The Wiso Basin is relatively underexplored but Toro Energy conducted a SkyTEM airborne electromagnetic survey covering 1625 square kilometres in July of 2010 together with the NT Department of Resources. From these geophysical surveys, Toro Energy has identified a possible palaeochannel system with the potential to deliver a uranium mineralising system similar in size and scale to those mines found in Kazakhstan.

As part of the JV deal, Toro Energy announced on the 11th of May that Areva Resources Australia had commenced exploration drilling on the Wiso Project. The drilling will focus on the previously identified palaeochannel system and will include 5000 metres of drilling over the course of two months. The results of the exploration drilling will provide a clearer geological picture of the potentially significant sandstone hosted uranium mineralisation which lends itself to extraction via cost-effective in-situ leaching (ISL) methods.

New Resource Drilling

On the 25th of May, Toro Energy made a further drilling commencement announcement, this time on its Wiluna Project properties. The Wiluna Project is Toro Energy’s primary asset situated in Western Australia. Wiluna consists of four core deposits, Centipede, Millipede, Lake Maitland and Lake Way as well as two secondary deposits, Dawson Hinkler and Nowthanna.

Toro Energy is undertaking a 6-week new resource, sonic drilling process to drill and investigate samples from 130 holes across Lake Maitland, Centipede, Millipede and Nowthanna. The sonic drilling process uses high-frequency vibration of the drill head to cause a thin layer of soil particles around the drill to behave more like a fluid or paste rather than a solid mass. This dramatically reduces friction and enables the collection of very long continuous samples. These core samples can be subjected to detailed analysis to evaluate the potential mineralisation of the subsurface.

In September 2014, Toro Energy released the results of a close space drilling programme conducted on the four key Wiluna properties. The results of this programme enabled Toro Energy to announce a finding of “positive disequilibrium”. In three of the four zones, continuous mineralisation with consistent grades of over 1000ppm was found. The current sonic drilling programme will focus on these higher grade deposit areas and we anticipate that Toro Energy will release the results by the 4th quarter of 2015.