Toro Energy Ltd will not exercise its option to acquire the Napperby uranium project in the Northern Territory from fellow uranium explorer Deep Yellow Ltd because it is currently not "economically viable".

At the current uranium price, the option purchase price would be about $57 million.

Toro said on Tuesday that its scoping study and follow-up on alternative development options had shown that the current economics of the project, based on current long-term uranium prices, did not warrant taking up the Napperby purchase option under the current terms with Deep Yellow.

Furthermore, no significant extra uranium deposits with reasonable grade had been discovered in the region to support the economics of the project, it said.

Significant regional exploration would be needed to define extra resources.

"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 said it had made a proposal on different terms to Deep Yellow but Deep Yellow had rejected it.

"Toro will now provide additional focus to its exploration efforts in the Northern Territory looking for large-scale, high-grade deposits that are economically robust," Toro said.

Shares in Toro were steady at 10.5 cents at 1424 AEST on Tuesday. Shares in Deep Yellow were one cent lower at 20 cents.