IsoEnergy: Adding Deeply Discounted Australian Exposure via Acquisition of Toro Energy Ltd

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On October 12, IsoEnergy (ISO) and Toro Energy Ltd (TOE) announced that they have entered into a scheme of implementation deed whereby IsoEnergy has agreed to acquire all of the issued and outstanding shares of Toro, by way of a scheme of arrangement under Australia's Corporations Act 2001. Toro's flagship asset is the wholly owned Wiluna Uranium Project, located in Western Australia.

Under the terms of the transaction, Toro shareholders will receive 0.036 of a common share of IsoEnergy for each Toro share held on the scheme record date. Existing shareholders of IsoEnergy and Toro will own approximately 92.9% and 7.1% on a fully-diluted in-the-money basis, respectively, of the outstanding ISO shares upon implementation of the transaction (expected in Q1/2026). The exchange ratio implies A$0.584 per Toro share which represents an 80% premium to the A$0.325 per Toro share last traded on the ASX on October 10 and a 92% premium to Toro's 20 day VWAP on the ASX as at October 10, 2025. Note that the equity value of the transaction equatrs to approximately A$75.0M or C$68.0M. Though the TSXV was closed on October 13 due to the Canadian Thanksgiving holiday, shares of IsoEnergy added +7.7% on the NYSE (ISOU) on back of the announcement (on a generally bullish session for U stocks).

WILUNA PROJECT DETAILS

Located in central Western Australia, Toro's wholly owned Wiluna Uranium Project consists of three deposits (Lake Maitland, Centipede-Millipede and Lake Way) with a combined resource of 73.6M lbs U3O8 and an estimated 89.3M lbs V2O5 (JORC, all at a 100ppm cutoff). A PEA completed in 2014 envisioned a 16 year LOM open pit operation producing a total of 30.1M lbs U3O8 at average head grades between 800ppm-1,000ppm (C1 cash cost of $31.10 per lb over LOM). Mining at Wiluna is envisioned via a shallow strip excavation process with no blasting and drilling required. The maximum mining depth is seen at 15m while an alkaline agitated leach technique is expected to be used to process the ore. Toro has previously completed a trial mine and a comprehensive metallurgical test work program including a pilot plant trial. In 2024 an updated Scoping Study was completed for the stand-alone Lake Maitland deposit. Using a LT Uranium price of $85 per lb, a capital cost of A$298.4M and an AISC of $28.37 over the course of the estimated 16.3 year LOM (1.3M lbs U3O8 per year), a pre-tax NPV of A$907.9M and a pre-tax IRR of 56% was calculated. Though amendments are required, both Federal and state Environmental approvals have previously been granted for the Wiluna Project.

ISOENERGY EXPANDS ITS GLOBAL PORTFOLIO

Though IsoEnergy currently has uranium assets located in Queensland in its portfolio (highlighted by historic, non-JORC compliant resources of 13.8M lbs U3O8 in the Milo deposit and 10.9M lbs U3O8 in the Ben Lomond deposit), provided transaction approval (estimated in 1H/2026), Wiluna would become IsoEnergy's flagship Australian Project.

IsoEnergy's updated global portfolio would then include significant project optionality in Australia (Wiluna) along with an established high grade deposit in the Athabasca Basin (Larocque East) and numerous past-producing properties located the US (Tony M, Daneros). The Merged Group would have significant balance sheet strength and access to capital markets to fund the updated portfolio. Both Boards along with substantial shareholders (Mega Uranium holding ~12.7% of all Toro shares) intend to vote in favor of the transaction. A break fee of A$700,000 may be entitled to either party under certain circumstances. The Toro shareholder vote is expected to take place in early 2026. Note that Mega Uranium (MGA) sold the Lake Maitland Uranium Project to Toro back in 2013. The transaction is expected to close in 1H/2026. IsoEnergy shares will continue to trade on the TSX and NYSE, the company may apply to list on the ASX as well.

CONCLUSION & VALUATION

Acknowledging the JORC compliant estimated uranium resource of 73.6M lbs, IsoEnergy is paying the equivalent of ~$0.68 per lb which is significantly below the ~$1.30 per lb Mega received when selling the Maitland Lake Project to Toro, in 2013. Moreover, when looking at post-Fukushima, material Australian transactions, the per lb transaction multiple paid by ISO is below what was paid by Deep Yellow for Vimy Resources ($1.26 per lb - 2022). Reflecting the still uncertain Australian uranium environment, the transaction allows for deeply discounted optionality on a very advanced stage Wiluna project. For reference, recent per lb transactions have averaged $6.40 per lb in the Athabasca Basin (including transactions for Fission Uranium, UEX Corp., Idemitsu) and $5.30 in the US (including transactions for Consolidated Uranium, Alta Mesa, Uranium One). We maintain our 1.0x target NAV multiple which leads to a price objective of C$17.95. This implies 22% upside from the most recent close on the TSX (October 10). ISO shares currently trade at 0.82x discount to NAV.