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Australian uranium exploration merger

Monday, 6 August 2007

A friendly merger between Toro Energy and Nova Energy is set to create a significant Australian uranium exploration company valued at $342 million. It would hold exploration leases in three Australian regions and three African countries.

A friendly merger between Toro Energy and Nova Energy is set to create a significant Australian uranium exploration company valued at A$400 million ($342 million).

Subject to approval by Toro shareholders, the new enlarged Toro, would have two mine projects - Lake Way-Centipede in Western Australia and Napperby in the Northern Territory. It would also have a spread of exploration leases in South Australia, Western Australia and Northern Territory and would be active in Guinea, Morocco and Namibia.

The major shareholder would be Oxiana which had a substantial holding in each of the two companies and will hold 46% on the new Toro. The major part of the company's identified resources are in the Lake Way-Centipede deposits, which cannot be developed until there is a change in the Western Australian government position on uranium mining. This political risk is offset by the spread of prospects in other regions.

Toro's managing director, Greg Hall, said the decision to merge "led, rather than reacted to, an imminent increase in merger and acquisitions activity" in the Australian uranium sector, which he said was valued at $2.5 billion. He added that "future target companies and uranium deposits will become less available."

Hall said that the merged group would "have the scale to play an active role in sector consolidation" and be able to fast-track mine development.

Further information

Nova Energy
Toro Energy

WNA's Australia's Uranium and Who Buys It information paper