03/11/2014 - 15:22

Toro in $20 million funding and assets deal

03/11/2014 - 15:22

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Perth-based uranium explorer and developer Toro Energy has secured a $10 million cash injection from global investor The Sentient Group, with a further $10 million to directly fund Toro’s Wiluna project still to come.

Toro in $20 million funding and assets deal
Toro Energy managing director Vanessa Guthrie.

Perth-based uranium explorer and developer Toro Energy has secured a $10 million cash injection from global investor The Sentient Group, with a further $10 million to directly fund Toro’s Wiluna project still to come.

In return for the proposed $10 million for Wiluna, Sentient will receive 2.5 per cent of the gross revenue Toro secures from any future production from a mine at Wiluna.

Under the terms of the agreement, Toro will issue $10 million worth of shares at 8 cents per share as part of a placement, with a further $10 million cash boost under negotiations due to be finalised within days.

When finalised, the deal will provide Toro with enough cash for at least four years.

Following the placement, Sentient will own around 19 per cent of Toro’s issued capital and will become Toro’s third largest shareholder, after Oz Minerals and Mega Uranium.

According to Toro, the Wiluna funding would be used for research and development and engineering studies to improve the project and bring it to a final investment decision as the uranium market recovers.

Toro also announced it would acquire Sentient’s Canadian-based uranium assets in a deal valued at approximately $18.9 million.

This involves Toro issuing 236.5 million new Toro shares to Sentient to acquire a 19.8 per cent interest in TSX-listed Canadian uranium explorer, Strateco Resources.

This requires approval from the Foreign Investment Review Board, which Toro said was expected by mid-December.

The Canadian assets include the Strateco-owned Matoush uranium exploration and development project in northern Quebec, which is waiting on a resolution of permitting and regulatory issues with the regional government.

According to Toro, Strateco has spent more than C$125 million in development funds during the past eight years.

Toro’s end-of-year financial statements released in September estimated its current and non-current assets to be worth $137.6 million.

Toro managing director Vanessa Guthrie said the deal enabled the company to bring Wiluna into production in the expected emerging market supply gap, as well as gain international exposure.

“Strategically, we also now have our first opportunity, when conditions prevail, to develop an expanded global uranium portfolio, with Canadian and North American markets support for the potential for uranium market growth in rising nuclear energy demand around the globe,” Dr Guthrie said.

As part of the deal, Toro will appoint Sydney-based Sentient investment manager Michel Marier to the board as a nominee of Sentient.

Toro said it would also undertake a share purchase plan for existing shareholders on the same pricing terms as the placement, with a target of $5 million.

BBY Australia were appointed as co-lead manager and brokers for the placement and share purchase plan, supported by RealFin Capital Partners and Aetas Global Capital.

Toro shares closed the day unchanged at 8.2 cents.

Sentient manages more than $US2.7 billion in resources sector investments internationally.

The investor is one of the few resources sector-focused private equity groups, along with Denham Capital, which Business News reported earlier today has committed $146 million in a new Perth-based venture, Auctus Minerals.

 

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