Toro gets a fraction of the money it needs to start Wiluna uranium project

still a long way off from the $260 million they need to start the project and $260 million they need in upfront bonds for mine closure. 

Toro secures $10m in funding. Yahoo News, 24 Dec 13, Toro Energy says it has secured $10 million in new funding from a South African fund manager via an equity subscription agreement.

RealFin Capital Partners will initially invest $5 million in three tranches with the option of another $5 million equity subscription before July 1 next year.

The first tranche of shares will be priced at 7.3 cents with the balance of tranches priced at a 10 per cent discount to the prevailing trading price of Toro at the time.Toro managing director Dr Vanessa Guthrie said the subscription agreement provided further funding certainty for Toro as it looked towards a busy 2014 work program……http://au.news.yahoo.com/thewest/business/a/20468131/toro-secures-10m-in-funding/

The woes of Australia’s uranium industry

Is time up for Australia’s uranium industry? ABC , DAVE SWEENEY , 18 Dec 13, Times are tough for Australia’s yellow-cake industry. It is best to put the whole thing out of its misery?  ”………The Australian uranium industry has long been a source of trouble. Now it is increasingly in trouble. The commodity price has collapsed, projects across the country have been stalled, deferred or scrapped and the recent Kakadu spill has again raised community attention and concern.

Business as usual in a most unusual business is not an option and there is an urgent need for an independent review. For those who make judgements on the basis of evidence rather than enthusiasm the alarm bells have been ringing loud for a number of years.

In March 2011, the world held its breath and the name Fukushima entered the global vocabulary. Fukushima means ‘fortunate island’ but the region’s luck melted down along with the reactors at the Fukushima Daiichi nuclear plant following the earthquake and tsunami.

The continuing Fukushima nuclear crisis was a game changer — not just for the hundreds of thousands of people directly affected whose lives will never be the same, but for the global nuclear industry. The industry has since witnessed the death of its public-relations-fuelled dream of a nuclear ‘renaissance’.

In October 2011 the director of the Australian Safeguards and Non-Proliferation Office formallyconfirmed to the Senate “that Australian obligated nuclear material was at the Fukushima Daiichi site and in each of the reactors”.

Fukushima started inside a big yellow truck in Australia. Rocks dug up in Kakadu and northern South Australia are the source of the radioactive fallout now spread across Japan and well beyond — wandering in the winds, circulating in the currents.

And, appropriately, the market fallout from Fukushima has hit the industry hard. For a year the industry response was a combination of wait and see. Now it is increasing pack and run.

This vote of no-confidence has been echoed and played out across the wider Australian industry.

Last year BHP Billiton, the world’s biggest mining company, pulled away from a plan to commit over $20 billion to a massive new development at its Olympic Dam mine in northern South Australia. Despite sweetheart deals and a raft of government favours, the then BHP boss Marius Kloppers cited the “soft” uranium price and the “uncertain” future of the uranium market as a primary reason for the decision to put the plans on ice.

In a true case of voting with your steel capped feet, BHP went further, selling its undeveloped uranium assets in Western Australia and disbanding its dedicated uranium unit.

More recently, one of Australia’s few approved and operating mines closed its doors. In November, theHoneymoon mine in South Australia ceased production and moved to extended care and maintenance status, again citing the poor uranium price.

Hard on the heels of this came the news that Marathon Resources, a uranium junior which had big ambitions to develop a mine in SA’s gorgeous Gammon Ranges had instead decided to give the entire uranium game away, declaring the sector’s “risks are more likely to exceed rewards” (pdf).

And in Queensland, uranium hopefuls and the Australian Uranium Association are in closed door dialogue with the LNP state government seeking ‘royalty relief’, before they have even lodged an application to mine. Hardly the sign of a buoyant economic trade.

For the uranium sector it really does look like the Honeymoon is over and the Marathon is finished. And just as the sector was limping to the line for season 2013 the danger of Ranger became clear to all.

The most recent independent assessment of the Australian uranium industry — a Senate Inquiry in October 2003 — found the sector was characterised by underperformance and non-compliance, an absence of reliable data to measure contamination or its impact on the environment and an operational culture focussed on short term considerations.

Uranium mining is a high-risk, low-return sector that poses unique, unresolved and long-lived threats and does not enjoy secure social license. It is time for our politicians to stop accepting industry promises and start genuinely examining industry performance.

The uranium sector in Australia and internationally is cutting costs and cutting corners, the risks are growing and we have enough warnings. Now we need some action.

Seeking to assuage community concern after the Ranger spill federal Resource Minister Ian Macfarlane stated last week, “what we need to do is just have a process where the facts can be laid on the table.”

We agree. It’s called an independent public inquiry into the costs and consequences of Australia’s troubled uranium industry.http://www.abc.net.au/environment/articles/2013/12/18/3913291.

BHP has gone cold on uranium mining at Olympic Dam

Where Olympic Dam is concerned, it’s the outlook for the main commodity—uranium—rather than potential investors that it mostly dislikes.

BHP Warms to Partnerships, But Olympic Dam Remains in the Cold WSJ 10 Dec 13, BHP Billiton Ltd. wants to share the love to get its $10 billion Jansen potash project in Canada off the ground. But the world’s biggest mining company is being a determined single when it comes to another costly development: Australia’s Olympic Dam…….

BHP’s reluctance to seek a partner for an expanded Olympic Dam project in South Australia may surprise as it’s stuck on the back burner, squeezed by low commodity prices and high development costs estimated by analysts at around $30 billion. In August last year, BHP said it would look for a less costly design for the Olympic Dam mine, which had been expected to bring in billions in tax dollars and create thousands of jobs. Up to now, it hasn’t announced any new plans for the site.

At first glance, finding a competitor to share development costs and risks with BHP makes sense. If they also bring in new technology then so much the better.

The problem for BHP is that a partner might actually want to get the project moving, even at a much-reduced scale. That would test BHP’s desire to keep annual spending below $15 billion in future, down by a third from last year’s bill totaling $21.7 billion. With uranium prices continuing to hover near eight-year lows, and several countries debating nuclear power in their energy mix, BHP can avoid such tough decisions by keeping full control of the asset.

“We like partnerships,” Mr Mackenzie told U.S. investors. Where Olympic Dam is concerned, it’s the outlook for the main commodity—uranium—rather than potential investors that it mostly dislikes. http://blogs.wsj.com/moneybeat/2013/12/10/bhp-warms-to-partnerships-but-olympic-dam-remains-in-the-cold/

Fall in ERA’s share price

Rio’s ERA Drops After Australia Uranium Mine Spill: Sydney Mover Bloomberg, By James Paton  Dec 8, 2013 Rio Tinto Group’s Energy Resources of Australia Ltd. tumbled the most in almost two years in Sydney trading after an acid and ore spill at its Ranger uranium mine near world heritage-listed Kakadu National Park.

ERA (ERA), 68.4 percent owned by London-based Rio, dropped 13 percent to A$1.135, the most since Feb. 1, 2012, while the benchmark S&P/ASX 200 Index fell 0.8 percent…….http://www.bloomberg.com/news/2013-12-09/rio-s-era-drops-after-australia-uranium-mine-spill-sydney-mover.html

ERA’s shares feel the pain after Ranger mine’s mishaps

t is unclear whether the [Rio Tinto]current leadership, which last month announced the closure of the loss-making Gove Alumina Refinery in the Northern Territory,  will continue to show such strong support for a struggling mine with so many environmental and indigenous issues.

ERA shares facing pressure over uranium leak, SMH, Peter Ker, December 9, 2013  Rio Tinto’s hopes of reviving its majority-owned Ranger uranium mine have been dealt another blow by the leak of toxic substances on Saturday….

… Shares in the Rio Tinto subsidiary that operates the mine – Energy Resources of Australia – are traded on the ASX and may come under pressure on Monday morning as federal and Northern Territory regulators conduct investigations.

Processing of uranium has been halted on site until the clean-up and testing can be completed and, with some fearing that halt could last weeks, the market will be keen to know if ERA will need to buy uranium on the market to ensure it can meet its supply contracts.

ERA shares have traded around $1.30 over the past five to six weeks and most of the value in the stock is attached to hopes of starting a new underground uranium mine beneath the Ranger pits, which ceased mining last year after more than three decades.

The underground development is still being explored and will face a heavy load of approvals before it is allowed to proceed. One of the most important approvals will be in the hands of the local Mirarr indigenous group, who expressed concern on Sunday.

”Accident by accident, incident by incident, the trust is diminished,” spokesman Justin O’Brien said……

Ranger is one of the three biggest uranium producers in history, but its decline into virtual recess could not have come at a more testing time for Rio Tinto, which is cutting back spending and trying to prune underperforming assets from its global portfolio.

Rio stumped up about $250 million in 2011 to help fund a three-year exploration campaign that is testing the viability of an underground mining future at Ranger.

That decision was made under the previous leadership at Rio and it is unclear whether the current leadership, which last month announced the closure of the loss-making Gove Alumina Refinery in the Northern Territory, will continue to show such strong support for a struggling mine with so many environmental and indigenous issues.: http://www.smh.com.au/business/era-shares-facing-pressure-over-uranium-leak-20131208-2yzdn.html#ixzz2mziEoAYr

Formidable obstacles to Toro’s uranium mining future

Toro Energy – the company seeking to open WA’s first uranium mine – will be the focus of critical attention from local residents, Traditional Owners and State and National environment groups at its annual meeting in Perth today.

Opponents of the company’s uranium mining plans will greet Toro executives and shareholders with an independent report casting doubt on the economic viability of the company as well as the broader nuclear industry.
A theatrical performance outside the AGM will also demonstrate that the nuclear industry’s vital signs are ‘flat lining’.

“Toro have expanded their proposal from one risky and unviable uranium mine in Wiluna, to a series of equally small and risky deposits in the region” said CCWA campaigner Mia Pepper. “What they won’t tell shareholders is that this expansion plan will represent more delays, more costs, more environmental problems, and more community opposition.”

“Toro have failed to fully disclose the complexity, risk and lack of formal approval for its long term plans.”
“CCWA and the Australian Conservation Foundation oppose the current proposal and will actively contest the company’s plan for seven uranium mines across 200km and 2 lake systems which will involve a doubling of water use and radioactive mine waste”.

“Toro’s shareholders will have a very long wait before this company will be profitable, if ever. The conditional approval granted for the Wiluna mining proposal prohibits the company from doing any other preparatory works for a mine until thirty six conditions are met and further management plans are approved.”

“Financial problems have dogged the uranium sector with low uranium prices, high operating costs and a lack of investor confidence following the global decline in nuclear power post Fukushima,” said Ms Pepper.

“While some companies are cutting their losses Toro is on track for tough times ahead”.

Gloomy reality of Australia’s collapsing uranium industry

AUSTRALIAN CONSERVATION FOUNDATION, 26 Nov 13, Uranium hopefuls will be hard pressed to find a positive story about the embattled sector at a mining industry conference this week in South Australia. The last two weeks have seen further evidence of the continuing market fallout from Fukushima on SA’s embattled uranium sector with the closure of the Honeymoon operation and the decision by Marathon Resources to exit the uranium trade, declaring the sector’s ‘risks outweigh the rewards’.

 The news comes as a set of uranium junior companies join with the Beverley project’s Heathgate Resources to talk up the sector at the 2013 Mining South Australia conference, which starts today in Whyalla.

Australia’s uranium industry is suffering from:

• ·                The scrapping of plans for a massive expansion of BHP Billiton’s Olympic Dam mine in SA because of the ‘uncertain’ uranium market
• ·                A fall in the uranium commodity price of around 50 per cent and larger falls in the share value of uranium mining companies since Fukushima – a continuing crisis directly fuelled by Australian uranium
• ·                Sustained losses and operational failures at ERA’s Ranger mine in Kakadu
• ·                Attempts by Queensland uranium promoters to receive ‘royalty relief’ and public concessions even before making any formal applications to mine
• ·                Projects stalled, scrapped or deferred in WA, SA and the NT

“The uranium industry has long caused trouble, now it is increasingly in trouble,” said Australian Conservation Foundation nuclear free campaigner Dave Sweeney. “Uranium mining is a high-risk, low-return sector that poses unique, unresolved and long-lived threats and does not enjoy secure social license.

“It is time for politicians to stop accepting industry promises and start genuinely examining industry performance. “ACF urges state and federal governments to give effect to the UN Secretary General’s call that Australia conduct ‘an in-depth assessment of the net cost impact of the impacts of mining fissionable material (uranium) on local communities and ecosystems’.

“Instead of misplaced industry enthusiasm it is time for a comprehensive and independent assessment of the costs and consequences of the uranium sector.”

Marathon bows out of uranium exploration

Explorer says uranium project unviable Yahoo 7 Finance 21 Nov 13, Minerals exploration company Marathon Resources has turned its back on the uranium industry for good. The company says its experience suggests the “risks were more likely to exceed rewards” in a sector hit by low ore prices.

“Both the political and regulatory regimes have deterred us permanently from the uranium industry,” chairman Peter Williams told the company’s annual meeting in Adelaide on Thursday. Marathon previously has been involved in exploring a section of South Australia’s Flinders Ranges with a view to developing a significant uranium deposit.

However, it fell foul of the South Australian government over the disposal of waste while the government eventually moved to ban all mining in the environmentally-sensitive area anyway.

Since then, the uranium industry has been hit by falling commodity prices which also has prompted mining giant BHP Billiton to mothball its plans for a $30 billion expansion of its Olympic Dam copper and gold operations…… industry is presently witnessing that part of the cycle where the spot price for product has fallen dramatically below production costs sufficient to amortise large capital costs,” he said…….. http://au.finance.yahoo.com/news/explorer-says-uranium-project-unviable-032809245.html

Uranium miners operating at a loss

Tough times ahead for uranium miners  ABC Rural  By Tara de Landgrafft   19 Nov 13,  ”……With a number of Japanese reactors still offline after the 2011 earthquake, there is an oversupply of uranium in the marketplace…..it will be a tough two years ahead for current producers, with one Australian miner already going into care and maintenance.

“You could have up to 40 to 50 per cent of producers who are actually operating at a loss at present,” he said.

“We’ve got a shorter term surplus in the market where you’ve got reactors offline and material that would have been entering into term contracts, those have been deferred, and that’s finding its way probably more into the short, medium-term market.” http://www.abc.net.au/news/2013-11-19/nrn-uranium/5101704

Drastic loss for Paladin uranium miner

Uranium miner Paladin makes $US40m loss Yahoo 7 Finance AAP , 15 Nov 13 Uranium miner Paladin Energy made a $US40 million loss in the three months to September as uranium prices remain low…….Its average realised uranium sales price for the September quarter was US$41.38 per pound, as the spot price trades around eight year lows. Paladin is looking to sell a stake in the Langer Heinrich mine. It is also cutting jobs and costs in response to falls in the price of uranium.