Uranium miner Toro Energy will pay off its $12 million debt with Macquarie Bank after striking a deal with one of its substantial shareholders.
Toro has secured a $6 million interest-free loan from The Sentient Group, which holds a 14.4 per cent interest in the company, and will conduct a placement of 31.2 million shares at 8 cents each to Sentient to raise a further $2.5 million.
The placement will boost Sentient’s shareholding to 18.3 per cent.
Toro will also release $3 million out of a previously arranged $10 funding deal with Sentient.
The remaining $500,000 will be taken out of Toro’s existing working capital.
The deal will essentially halve Toro’s debt to $6 million and under more convenient terms with Sentient than with Macquarie.
“The agreement also concludes the transaction by Toro with Sentient announced in November last year, with the issue to Sentient of 31.2 million subscription shares at 8 cents each for $2.5 million and a further issue of 51.9 million shares to complete the acquisition of various assets of Canadian-based Strateco Resources,” Toro said in a statement.
Managing director Vanessa Guthrie said the new financial structure strengthened the company’s position as it entered the new financial year, and enabled it to fund further project optimisation studies and a definitive feasibility study on its advanced Wiluna uranium project.
Toro has already received approval from the state and federal governments to establish a processing facility and commence mining at two Wiluna deposits, and is currently undergoing environmental assessment and approval processes to mine two additional deposits.
Toro shares rose by 2.8 per cent to 7.2 cents each at 12:45pm.