Could a copper resource at Molyhil help Thor Mining push project forward? (THR)

Thor Mining’s (LSE:THR) Molyhil project is known for being one of the Western world’s higher-grade open tungsten and molybdenum projects. However, a prospectus released back in August 2006 suggests that the asset also boasts copper mineralisation that could boost its attractive economics further.

Wholly owned by Thor, Molyhil is based in Australia’s Northern Territory and consists of two adjacent magnetite skarn bodies with economic mineralisation of scheelite, molybdenite, and magnetite. Thor has carried out large amounts of work on the project including resource extension drilling, metallurgical test work, technical, environmental and social studies, and environmental permitting.

An upgraded feasibility study published last year gave the project a A$239m (c.£130m) EBITDA and a post-tax payback period of within 18 months of first production. Meanwhile, the work also gave the asset an all equity NPV(5) of A$101m (c.£55m), a 59pc IRR, and a seven-year mine life with potential for underground extension. More recently, drilling at the nearby Bonya tenements has strongly suggested several additional years of mine-life at Molyhil.

These figures were derived from an updated open-cut ore reserve statement published in January last year. This gave Molyhil probably reserves of 3.5MMts at 0.29pc tungsten trioxide and 0.12pc molybdenum – equivalent to 10,200t and 4,300ts of each metal respectively.

There is no question that these figures paint a promising picture for Molyhil’s prospectivity. However, a quick look back at a project resource estimate contained within a Thor prospectus released more than a decade ago suggests that the project’s tungsten and molybdenum resources could be complemented by the presence of copper. Indeed, the work, which was carried out to a 150m depth, gives Molyhil a total resource of 2.4MMt at 0.072pc copper – split between 0.088pc measured, 0.06pc indicated, and 0.1pc inferred.

Now, this resource estimate is clearly dated – indeed, the total resource estimate of 2.4MMts sits well below the figures used in the asset’s most up-to-date feasibility study. Likewise, a copper resource of 1,728ts (2.4MMt * 0.072pc) is hardly going to set the world alight on its own. However, with current prices valuing this stock of the red metal at around £10.5m, its inclusion in Molyhil’s overall economics could be significant.

Indeed, this figure would underpin a large portion of Molyhil’s current $43m (£33.8m) project finance estimate. As such, it could help to cut Thor’s project payback period from 18 months to an even shorter timeframe. What’s more, all of Molyhil ore must be processed comprehensively to produce tungsten – the site’s most valuable metal. Part of this process involves floating off any associated Molybdenum and sulphides. With this in mind, it seems likely that floating off any copper would come at very little additional cost.

These points could provide Thor with some additional support as it continues to finalise offtake agreements at Molyhil. At the end of last month, the business’s executive chairman Mick Billing said his confidence in securing agreements ‘remains firm’, adding that the business has seen positive engagements from numerous players. Could an additional copper resource help to push a deal over the line?

Finally, the presence of copper at Molyhil would complement the potential offered by Thor’s 40pc-owned, adjacent Bonya tenements. Last November, an initial estimate gave the historic Bonya Copper Mine deposit an inferred resource of 230,000ts grading 2pc copper. Following this, drilling earlier this month at Bonya’s Samarkand prospect encountered 5m at 0.5pc copper from 9m, 12m at 0.69pc copper from 22m, and 6m at 0.97pc copper from 38m.

All-in-all, the historic copper on offer at Molyhil is unlikely to be a game-changer for Thor on its own. However, if the company decides to re-visit the resource, it could prove to be a deal-maker for any potential financier.

Author: Daniel Flynn

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Thor Mining releases ‘very exciting’ interim drill results from Bonya (THR)

On Tuesday, Thor Mining (LSE:THR) announced expectation-beating drilling results from the Bonya tungsten deposits in Australia. The drilling campaign consisted of around 2,500 metres of Reverse Circulation (RC) drilling at a number of targets including the Samarkand, Jericho, White Violet, and Tashkent deposits. Interim results for three of the four targets are now available following portable x-ray fluorescence (XRF) determination. The White Violet deposit stole the show with very strong results, including 27 metres of 0.32pc tungsten oxide from 71 metres. Copper was also found from a number of holes, particularly on the White Violet deposit including 16 metres at 0.43pc copper from 43 metres.

Thor holds a 40pc interest in Bonya via a joint venture with ASX-listed Arafura Resources (ASX:ARU). The deposits lie around 30km east of its 100pc owned Molyhil tungsten project which Thor is developing towards commercial production. The firm completed an updated Definitive Feasibility Study for the project back in August and is now focused on securing project finance to bring Molyhil into production. Thor has been in advanced discussions with a number of potential partners regarding potential off-take, joint venture and debt financing arrangements.

 Bonya Exploration Targets

 

Meanwhile, Thor continues to progress its 100pc owned Pilot Mountain tungsten project ideally located in Nevada, USA. The firm believes the resource is ‘substantial on a global scale’ and with the US Department of the Interior declaring the mineral as critical in 2018, it perhaps couldn’t be better placed. Thor is carrying out testwork to further advance the project to a pre-feasibility study standard.  Last December the company upgraded its resource estimate for the Desert Scheelite deposit. This included a 6.5pc increase in tungsten and added also added Zinc mineralisation.

Back to Australia, and there has been plenty of recent activity concerning Thor’s copper interests; the Kapunda and Moonta projects. 

Kapunda hosts an in-situ recovery (ISR) amenable inferred mineral resource estimate of around 119,000ts of copper. Thor holds an interest via 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.  Under a memorandum of understanding (MOU) signed in March, Thor will relinquish its interest in ECR and buy a 25pc, pre-listing, interest in Enviro for AUS$0.6m and will retain the right to acquire a further 5pc seed capital interest in the vehicle for AUS$0.4m. Moonta sits within a very prolific copper mining area known as the ‘copper triangle’ in South Australia and contains an ISR amenable exploration target of  238Mt-310Mt at a grade range of 0.18pc-0.23pc copper. 

In a separate RNS on Tuesday, Thor announced it will be holding a general meeting at 9am on 23 May at the offices of Grant Thornton UK LLP in London.

Mick Billing, Executive Chairman, commented:

"These are very exciting interim results, particularly from the White Violet deposit, where results are substantially better than expectations."

"The inclusion of attractive copper interim assays from several holes also elevates the potential of the Bonya area in general, but White Violet especially."

"We look forward to the interim results from the Samarkand drilling, and also to the full laboratory assays expected during May."

Author: Stuart Langelaan

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Thor Mining rises as Enviro Copper commissions resource estimate at Moonta (THR)

Thor Mining (LSE:THR) enjoyed a 6pc rise to 0.8p a share on Tuesday morning after announcing the commissioning of a resource estimate at its part-held Moonta copper project in South Australia. Moonta stakeholder Enviro Copper has engaged a mining consultancy called Mining Plus to prepare the estimate for several Moonta deposits considered amenable to in-situ recovery (ISR). Numerous drill holes made over several decades will provide the basis for this resource estimation.

Based in Adelaide, Moonta 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. The site is thought to contain an ISR amenable exploration target of between 238Mt and 310Mt at a grade range of 0.18pc-0.23pc copper.

Enviro Copper is earning up to a 75pc interest in Moonta from ASX-listed Andromeda Metals. As part of an agreement announced last month, Thor can earn up to a 30pc stake in Enviro Copper before listing activities. These are ‘potentially scheduled’ for later this year, according to Tuesday’s update.

Thor’s executive chairman Mick Billing called Tuesday’s development ‘very exciting’ for the firm’s copper strategy.

‘The non-invasive production technique of In-situ Recovery of copper has the potential to co-exist without significant disruption to farming and once completed, have little to no impact on future agricultural land use,’ he added. ‘ISR is an extension of proven technology and has been in use since the 1960's. With recent technical advances ISR can now offer a lower footprint and is likely to find further application in mineral recovery fields because it can coexist with other land use activities. The Moonta project, hosts oxide copper minerals and some secondary sulphide copper minerals in deep weathered troughs, indicating early stage potential for copper production via ISR methods.’

Last month’s deal also saw Thor transfer its interest into the Adelaide-based Kapunda copper project into Enviro. Kapunda hosts an in-situ recovery (ISR) amenable inferred mineral resource estimate of 119,000ts of contained copper.

Thor held 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 relinquished its interest in ECR in exchange for 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.

Thor said the new combined Enviro 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.

Author: Daniel Flynn

The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

The Author has not been paid to produce this piece by the company or companies mentioned above.

Catalyst Information Services Ltd, the owner of MiningMaven.com, owns a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

Catalyst Information Services Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.

MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance