Toro raises $40m for WA uranium project

Adelaide-based Toro Energy has raised $40 million to advance its Wiluna uranium project in Western Australia, with first production anticipated in 2012.

The announcement is below:

A total of A$40 million has been raised by Toro Energy Ltd (ASX: TOE") as the emerging uranium project developer forges ahead to have first production from its key Western Australian uranium project by 2012.

Proceeds from the capital raising will be sufficient to fund all approvals and completion of a bankable feasibility study by 2011 for Toro's Wiluna Uranium Project in Western Australia along with other project and consolidation opportunities.

The funds were raised via oversubscribed placements at 15 cents per ordinary Toro share to a raft of Australian and international institutions and professional investors.

Toro's major shareholder, Oz Minerals Limited, also elected to contribute nearly half of the total raised to maintain its 49.9% shareholding in Toro, which is also developing the Napperby uranium project northwest of Alice Springs, and uranium prospective ground in South Australia and the African state of Namibia.

A Share Purchase Plan has also been announced by Toro to allow its retail shareholders the same opportunity to participate at the placement terms.

Toro's Managing Director, Mr Greg Hall, said today the increasingly strong support from the senior end of the equities market was a vote of confidence in the momentum and strategies behind the Company's drive to develop a near-term Australian uranium mining and project development business.
"To have a further expression of support from our major shareholder, OZ Minerals, also reflects the underlying potential within the portfolio of uranium assets assembled to date and we may look to add to that as we move our flagship projects towards production," Mr Hall said.
"Significantly, the proceeds announced today will now enable Toro from next month, to commit to and fully fund a bankable feasibility study and the approvals process for our wholly owned Wiluna uranium project so that we anticipate being able to make a development decision in 2011 to stay on track for first production in 2012.
"The proceeds also provide Toro with the opportunity to advance our other project and exploration work elsewhere in WA as well as Napperby in the Northern Territory, and to take advantage of consolidation opportunities in the sector."

Placement terms

The terms of the capital raising announced today, comprise:

- The placement of 83.4 million ordinary Toro shares at 15 cents each to domestic and international institutions and professional investors to raise A$12.5 million ("Tranche 1 Placement")

- An additional 49.9 million ordinary Toro shares will be issued to the same investors on a pro-rata basis subject to shareholder approval and satisfactory completion of the Tranche 3 Placement to raise a further A$7.5 million ("Tranche 2 Placement")

- An additional placement of 132.9 million ordinary shares issued at 15 cents each to OZ Minerals to raise a further A$19.9 million subject to shareholder approval and satisfactory completion of the Tranche 2 Placement. This placement allows OZ Minerals to maintain its 49.9% shareholding in Toro ("Tranche 3 Placement").

The 15 cents issue price represented a 22% discount to the 30-day VWAP of Toro shares prior to the trading halt on the ASX on 10 September, 2009.

The Lead Manager of the placement was Helmsec Global Capital Limited.

The Tranche 2 and Tranche 3 placement will be put for approval to a general meeting of Toro shareholders late in October.

The proposed Share Purchase Plan (SPP) will provide eligible qualifying Toro shareholders with the opportunity to each subscribe for up to A$5,000 worth of new Toro ordinary shares at the same price as the placements. Further details will be announced shortly.

Toro has been advised in relation to the placements and the Share Purchase Plan by Gryphon Partners (Financial Adviser) and O'Loughlins Lawyers (Legal Adviser).
The capital raising is the second major initiative for Toro within the past week - the Company announcing on Friday it had signed a joint venture Heads of Agreement with Cameco Australia Ltd ("Cameco") - part of the world-wide Cameco uranium group - to explore and develop the highly-prospective Birrindudu project in the Tanami region just inside Western Australia's border with the Northern Territory.

Cameco accounts for 15% of global output from its uranium mines in Canada and the United States with the joint venture giving Toro exposure to its third uranium project in Western Australia.