Thor Mining (LSE:THR) jumped 8.9pc to 1.15p on Tuesday after announcing plans to spin off its interest in the Kapunda copper project into a new business.
The firm, which was down 6.5pc on Wednesday, has signed a memorandum of understanding (MOU) to transfer its interests in the Adelaide-based project into Enviro Copper. This new vehicle will then hold earn-in rights up to 75pc in Kapunda as well as another asset called the Moonta copper project.
In exchange for transferring its stake, Thor can hold up to a 30pc position in Enviro before any listing activities. Thor shareholders, meanwhile, will hold the first option to invest in any listing that Enviro decides to seek on a recognised securities exchange.
Kapunda hosts an in-situ recovery (ISR) amenable inferred mineral resource estimate of 119,000ts of contained copper.
Thor holds its interest in the product through a private Australian company called Environmental Copper Recovery (ECR). Thor announced an agreement to earn up to 60pc in ECR last August in exchange for convertible loans worth up to $1.8m. ECR holds an agreement to earn, in two stages, up to 75pc of the rights over metals that may be recovered in the Kapunda deposit from ASX-listed miner Terramin.
Under the Enviro MOU, Thor will relinquish its interest in ECR and buy a 25pc, pre-listing, interest in Enviro for A$0.6m. It will also hold the right to acquire a further 5pc seed capital interest in the vehicle for $0.4m.
Moonta, meanwhile, is also based in Adelaide, where it sits within the historical ‘copper triangle’ of South Australia. Here, around 300,000ts of copper was mined and processed from the 1860s until the 1920s. Although it is less advanced than the Kapunda target, it contains an ISR amenable exploration target of between 238Mt and 310Mt at a grade range of 0.18pc-0.23pc copper. The asset is 75pc owned by a business called Environmental Metals Recovery, subject to due diligence.
In Tuesday’s update, Thor said the new combined entity would provide a strategic opportunity to build a substantial ISR-focused copper exploration, development, and production business with an initial focus on Australia. It said a key strategic target would be the ‘timely development’ of Kapunda into production, which would demonstrate the viability of ISR. This model would then be applied to the larger scale Moonta project.
Beyond its two initial interests, Enviro will aim to develop an expanded portfolio of ISR copper opportunities. Thor’s executive chairman Mick Billing added that Enviro could add ‘significant scale’ to the firm’s copper interests by bringing in exposure to Moonta.
‘While Kapunda is comparatively more advanced, the Moonta project, albeit at an earlier stage, provides potential for a much larger, and longer-term copper production entity,’ he said. The opportunity for eligible Thor Mining shareholders to have a priority investment opportunity in the new vehicle is seen as a core ingredient in the establishment and listing of this new entity.
‘Also, through their shareholding in Thor Mining plc, shareholders we be able to see the demonstrable value of our interest in Enviro Copper and that value will be in our financial accounts as a tradable market valued asset, rather than as merely a project within the Company. Shareholders should expect a range of additional market updates in the near term in respect of the developments at Enviro Copper, and as we take steps forward at Molyhil and Pilot Mountain.’
Author: Daniel Flynn
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