Subiaco-based uranium explorer Deep Yellow Ltd will offload its Napperby uranium project in the Northern Territory to South Australian uranium hopeful Toro Energy Ltd for around $2.3 million and a share issue, the company announced today.
Subiaco-based uranium explorer Deep Yellow Ltd will offload its Napperby uranium project in the Northern Territory to South Australian uranium hopeful Toro Energy Ltd for around $2.3 million and a share issue, the company announced today.
The full text of a company announcement is pasted below
The Boards of Deep Yellow Ltd (ASX code "DYL") and Toro Energy Ltd ("Toro", ASX code "TOE") are pleased to announce they have reached agreement on commercial terms for the farm-in and acquisition of the Napperby Uranium Project and its associated tenements EL24246 and EL24606 by Toro. Essentially, the proposal provides Toro with a 3 year period to advance the Napperby project toward development with the option to acquire 100% of the project by paying DYL for the in-ground resource on terms referred to below. Finalisation of the transaction is subject to due diligence and the negotiation and execution of a binding Sale Agreement.
The disposal of Napperby will allow DYL to proceed with its own newly acquired priority exploration projects while benefiting from Toro's expertise to fully evaluate the Napperby deposit which, if successful, will result in significant returns to DYL shareholders. Toro will benefit from the acquisition of a significant uranium mineralised system containing an Inferred Mineral Resource to JORC standard, with potential for expansion and future development.
The principal commercial terms are as follows: -
The Napperby Project is located approximately 150km North West of Alice Springs in the Northern Territory.
As reported in DYL's 13 December 2006 ASX release, the project contains an Inferred Mineral Resource of 1.9 million tonnes at 0.036% (360ppm) U3O8 for 670 tonnes or 1.5 million pounds of contained U3O8 estimated to JORC standard "occurring over 1 kilometre 'strike' of the mineralised channel system." In the same ASX release DYL reported the Inferred Mineral Resource confirmed the historic estimate in the same area of Napperby. The Inferred Mineral Resource is contained within a much more extensive mineralised system in a shallow (<10 m deep) channel over a 14 kilometre 'strike' length of the mineralised palaeochannel system. Definition of additional resources to JORC standard is planned.
The DYL Board's rationale for the sale of the Napperby project to Toro is to allow DYL to focus on its advanced exploration projects in Namibia, the Mt Isa district and recognised regional targets throughout Australia while allowing the Napperby project to be advanced as well as benefiting DYL's shareholders through a retained equity interest in Toro and possible royalties on production.
"Whilst DYL has a team of experienced uranium exploration personnel, the DYL Board recognises that Toro and its major shareholders have appropriate development expertise," Deep Yellow's Executive Chairman, Dr Leon Pretorius said today.
"Given Toro's stated objective of becoming a uranium producer, DYL and its shareholders will benefit from Toro's focused efforts as DYL will become a significant shareholder of Toro."
"Napperby has now been well established as a mineralised system through Deep Yellow's and others exploration work to date," Toro Energy's Managing Director, Mr Greg Hall, said today.
"On our own conceptual economic modelling, Napperby is now at a sufficiently advanced stage where it satisfies Toro's business strategy of acquiring uranium projects which have the potential to be progressed through resource definition and development stages to mine commissioning."
"This project also expands Toro's footprint into the Northern Territory for the first time, a region where Toro personnel have particular operating expertise. Toro will also continue to investigate other opportunities to access known deposits of uranium mineralisation."
DYL and Toro will continue discussions regarding a 50% / 50% exploration JV over specific areas of EL24246 and EL24606 with the potential for other deeper uranium mineralisation.
