West Perth-based U3O8 has signed an agreement to sell its Dawson Hinkler uranium project in WA to Toro Energy for $6.2 million.
West Perth-based U3O8 has signed an agreement to sell its Dawson Hinkler uranium project in WA to Toro Energy for $6.2 million.
Subject to due diligence U3O8 has agreed to sell the project for $6.2 million, plus a 2 per cent net smelter return if the project returns more than 6.2 million pounds of uranium.
Completion of the acquisition would add significant additional resources close to Toro's advanced Wiluna uranium project, which is currently being assessed for approval by the state and federal governments.
In a statement to the Australian Securities Exchange Toro said, "Toro believes the arrangement is a gain for both companies.
"It would release value for U3O8 shareholders and provide a significant cash injection to finance its exploration programs, while Toro would add additional resources to its Western Australian uranium portfolio, particularly in proximity to its intended first mining operation at its flagship Wiluna Project where a WA Government approved resource trial pit has recently been completed," the statement said.
See statement from U3O8 below:
U3O8 Limited (ASX-UTO) is pleased to announce the execution of a Memorandum of Understanding for the sale of its Dawson Hinkler uranium project to Toro Energy Limited (ASX-TOE).
UTO has agreed to sell the Dawson Hinkler project to TOE for a payment of A$6.2 million and the retention by UTO of a 2% Net Smelter Return royalty on all uranium production from the tenements in excess of 6.2 million pounds of U3O8.
Payment would be made on execution of definitive legal documentation and is subject only to Toro's final due diligence covering aspects such as legal title, environmental and heritage issues and any shareholder and regulatory approvals that may be required. Both parties will work toward a completion date on or around the 25 November, 2010.
UTO released a JORC compliant inferred uranium mineral resource on the Dawson Hinkler uranium project of 9.5 million tonnes of ore at 293ppm U3O8 for 6.2 million pounds of U3O8 (at a 200ppm U3O8 cut off grade) on 12th June 2007. Subsequently, the Company completed a scoping study, a small additional drilling programme, and ground and aerial geophysical surveys.
TOE owns the nearby Lake Way and Centipede uranium deposits which contain a combined resource of 20.2 million tonnes of 548ppm U3O8 for approximately 24.4 million pounds of U3O8 (200ppm U3O8 cut off grade).
UTO will use the funds from the sale of its Dawson Hinkler project to continue an aggressive exploration programme on its quality portfolio of tenements, including uranium and rare earths on its Ashburton project in Western Australia, uranium on the Ardmore and Westmoreland projects in Queensland, in addition to other projects in Australia, as well as pursuing other opportunities in Australia and offshore.
