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Spot uranium price reacts to pressure and reaches $113 a pound

As the spot uranium price jumps to $113 a pound, Australian explorer, Toro Energy, seems well-positioned following major producer ERA’s forecast earlier this month of sharply lower production for the current year.

Author: John Chadwick
Posted: Tuesday , 10 Apr 2007

LONDON -

Toro Energy (ASX: TOE) Managing Director, Greg Hall was quick to comment on today's spot price for uranium, which has jumped by $18 to $113/lb. His comments came while most in London were breakfasting and commentators in North America were sleeping off the Easter holiday. He noted "this price is again based on an auction of 100,000 lb last Wednesday in the US, and was also impacted by ERA's announcement of a lower production forecast next year from the Ranger Mine in the Northern Territory [Australia] after recent floods there.

Essentially ERA is predicting about 1,200 t lower production for 2008 compared to 2006, as it will have difficulty accessing higher grades to maintain their head grades. This amount is the planned annual output of Paladin's new Langer Heinrich mine which last month announced its first commercial shipment. So," he emphasized, "from a global supply perspective, it is just as if Langer Heinrich has not started, keeping pressure on the price."

Toro Energy was formed through the amalgamation of the uranium interests of Oxiana and Minotaur Exploration in South Australia, to create one of the foremost uranium explorers in one of the world's most prospective uranium regions - South Australia's Gawler and Curnamona Cratons. It has uranium access rights to properties held 100% by Minotaur and 100% by Oxiana (excluding Prominent Hill) in those uranium prospective areas. In 2006, the company entered into joint venture with Stellar Resources and in February this year it purchased an option to buy 100% of the Napperby uranium project (New Well, Northern Territory) from Deep Yellow.

Napperby, 150 km northwest of Alice Springs is a surficial calcrete deposit (like Yeelirrie and Langer Heinrich) and is Toro Energy's most advanced project. It has open pit potential with a low stripping ratio and a low cut off grade. Uranerz conducted a prefeasibility study of the deposit in the 1970s. The mineralization is 3 to 5 m thick and is expected to be amenable to alkaline leaching.

John Chadwick is Editor and Proprietor of International Mining Magazine - http://www.im-mining.com/ .


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