December 1, 2011 / 1:11 AM / 7 years ago

Toro in talks to sell uranium stakes to Asian investors

MELBOURNE, Dec 1 (Reuters) - Toro Energy is talking to Asian investors who want to buy cornerstone stakes in the company and joint venture stakes in its A$280 million ($288 million) Wiluna uranium project to secure uranium, a senior executive said on Thursday.

Two parties are looking seriously, with talks likely to go on for another month or two, said Simon Mitchell, business development manager at Toro, declining to name the investors.

“The only hint we’ve given is they’re Southeast Asian-based nuclear utilities or infrastructure funds that are quite substantial,” Mitchell told Reuters.

He said that may include businesses from China, India, South Korea or Japan.

Toro is awaiting regulatory approvals for the Wiluna project in Western Australia, aiming to open Australia’s fifth uranium mine in 2013.

It could sell up to 35-40 percent of the project to joint venture partners, while it would consider selling 10-15 percent equity stakes in the company, with deals tied to offtake agreements.

“They want to secure uranium product. That’s their main objective,” Mitchell said.

He said there was a strong possibility the joint venture stake and the equity stake would be owned by different parties, but the company was also open to giving a joint venture partner an equity stake in the company.

“We’re not wedded to that idea, but certainly we understand that that will have to be on the table for some counter-parties,” Mitchell said.

Toro needs to line up development funds for Wiluna within the next six to nine months, while it aims secure the equity funding in two to three months.

It has A$15 million in cash on hand and A$3.75 million coming from the retiremenet of some uranium rights in South Australia, giving it enough funds for its near term activities on its projects.

Toro’s shares were up 2.5 percent in line with strong gains in the mining sector on Thursday. ($1 = 0.9734 Australian dollars) (Reporting by Sonali Paul; Editing by Ed Davies)

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