Toro Energy has entered into binding financing and asset acquisition agreements with leading global resources investor The Sentient Group. The transactions deliver a $10 million cash injection to Toro and increase Toro’s asset base with a strategic entry to the Canadian uranium sector through the acquisition of a significant interest in Strateco Resources.
Sentient becomes a new key shareholder in Toro, one of Australia’s most advanced uranium project developers, and Toro emerges with a strong four year cash base and interests in an expanded global uranium project portfolio. Negotiations for a further $10 million of project level funding are at an advanced stage.
Under the terms of a Subscription and Securities Sale Agreement, Sentient has agreed to subscribe for 125 million new fully paid ordinary shares in Toro for $10 million and Toro has acquired a 19.8% interest in Strateco, a Can$3 million senior secured loan receivable in Strateco, Can$14.1 million of junior secured convertible notes in Strateco and certain other interests from Sentient in return for 236.5 million new fully paid shares in Toro.
The additional $10 million project level investment being negotiated is in the form of a utilization agreement. Under that agreement when finalized Sentient will invest $10 million into Toro’s Wiluna Uranium Project in Western Australia to enhance and optimize the process design, project configuration and operating and capital cost structure for the project. Sentient plans to apply the technical skills of its Enirgi Group, a global resources company with a strong technology development base, as part of Toro’s efforts to improve the Wiluna project.
In return for the funding, Toro will pay to Sentient a unitization fee equal to 2.5% of gross proceeds derived from the Wiluna mine.
“Toro is pleased to have secured Sentient’s funding commitment and to have expanded our global uranium portfolio. The transactions introduce a major new shareholder in Sentient,” says Toro’s managing director Dr Vanessa Guthrie. “This should enable us to focus on bringing Wiluna into production into the expected emerging market supply gap and promoting the potential of the Wiluna uranium province, while building an initial global asset base that maximizes for our shareholders the upside potential of an improving uranium price.”