Thor Mining (LSE:THR) rose 8.7pc to 1.3p on Wednesday after revealing strong progress at all of its projects, an improved cash position, and a bullish outlook for tungsten price.
In an update for Q4 2018, the firm revealed that its forecast activity is entirely financed until late 2019 following the exercise of £581,000 worth of warrants last year. It also updated investors on recent activity and plans for the current quarter at its portfolio of tungsten, molybdenum, and copper projects around the world.
The end of last year saw the business appoint Argent Partners to provide corporate advice aimed at securing financing for its flagship Molyhil project.
Molyhil, which is located in the Northern Territory of Australia, is now substantially permitted and ready for construction as a result of Thor’s significant drilling and metallurgical testing work. As it stands, the site contains a probable reserve of 3.5MMts at 0.29pc tungsten (10,200ts) and 0.12pc molybdenum (4,300ts).
Last August, an updated definitive feasibility study for the site gave it an NPV(5) of A$101m, an internal rate of return of 59pc, an EBITDA of A$239m and a payback period of around 18 months. In Wednesday’s update, the firm said these enhanced figures had attracted the interest of various potential partners. It hopes to finalise an acceptable arrangement over the near term.
Over the coming quarter, Thor also plans to carry out marketing activities to lock in off-take agreements for both tungsten and molybdenum concentrates at Molyhil. It also expects to get drilling approval for the project’s nearby Bonya deposits.
A maiden resource estimate in Q4 last year gave Bonya a deposit of 230,000 tonnes containing 4,600 tonnes of copper. It is also expected to include tungsten deposits that could add to Molyhils life and scale. The company hopes to launch a drilling programme to assess this in the current quarter.
Elsewhere, Thor plans to carry out the second stage of metallurgical test work and environmental and infrastructure studies at its 100pc-owned Pilot Mountain tungsten project in Nevada. Last year saw the firm release an update to the resource estimate for the project’s Desert Scheelite deposit. This increase contained tungsten by 6.5pc and included attractive zinc levels for the first time.
Finally, the business said it plans to prepare the Kapunda copper project in Australia for field pump testing in the current quarter. This comes after it demonstrated proof of concept for in situ recovery at the site last year.
Mick Billing, executive chairman of Thor Mining, said: ‘A positive quarter with progress on all core projects, and a strengthened cash position. The appointment of corporate advisors to support and guide our efforts towards off-take & financing for Molyhil is a strategy we believe will improve our prospects of securing the best arrangement possible for our shareholders. A number of potential scenarios are possible with various interested parties, and we hope to be in a position to advise progress shortly. Additionally, the potential of nearby Bonya tenements, hosting tungsten, copper, and vanadium, provides potential upside for Molyhil, and also for other stand-alone development opportunities.’
The improvement in the Pilot Mountain resource estimate is an additional welcome boost as we advance our technical studies. Proof of Concept for ISR recovery for the Kapunda copper project is a significant critical step in this very exciting project. We will continue to provide investors with regular updates in respect of activities and progress.’
Elsewhere, the company gave a bullish outlook for price trends in its important tungsten and molybdenum markets. As at the time of the report’s release, tungsten price per mtu of Ammonium Para Tungstate were $262.50/mtu. Speaking to MiningMaven, Billing said industry dynamics indicate that prices could rise from this level:
‘China, the dominant global supplier, has withdrawn production licences from a number of producers for environmental reasons, and reports suggest that they have issued no new production licences for a couple of years. While a number of projects elsewhere are in development and hopeful producers, like Thor, are poised to commence development, it is unlikely that these new developments will meet the expected growth in demand.’
Meanwhile, molybdenum prices sat at $11.25/lb. Billing said the industry is expecting several years of supply constraints. This has led numerous potential molybdenum off-take partners to indicate a willingness to discuss fixed price purchasing agreements with Thor.
Author: Daniel Flynn
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