Toro Energy Ltd., a uranium producer in Australia, announced that it is now dropping its plan to acquire the Napperby uranium project in the Northern Territory from Deep Yellow Ltd. Toro said that it dropped the proposed acquisition of the uranium project because it is currently not economically viable as uranium prices lowered.

Toro said in a statement to the stock exchange that the scoping studies and the long term uranium price do not warrant the takeover. Toro also said that it has found no other significant uranium deposits in the area. At the current uranium prices, the option purchase price of the Napperby uranium project would be about $A57 million.

"As the project stands today, Toro's economic analysis of potential development scenarios indicated that the deposit was unlikely to exceed Toro's internal rate of return requirements under present and near term uranium price scenarios," Toro said in a statement. Toro and Deep Yellow had reached to an agreement over Napperby uranium project three years ago.

Toro has spent more than $5 million exploring the area since the agreement was signed by both the companies. Toro also said that it is currently in advanced discussions with unnamed potential third party investors over a coordinated exploration program in a Northern Territory tenement.