Thor Mining: is EnviroCopper closing in on more than half a million tonnes of copper at Moonta? (THR)

EnviroCopper is a privately run mining company, which is seeking to develop the Kapunda and Moonta copper projects using an extraction method call “in situ- recovery” (“ISR”). Thor Mining Plc (LSE:THR) has the right to purchase a 30pc stake in EnviroCopper, which is pioneering the application of ISR in copper mining operations in Australia. ISR is a highly cost effective and environmentally more friendly extraction method compared to traditional mining.

EnviroCopper is earning into 75pc of two ISR projects in Australia, at Kapunda and Moonta. Across these two projects EnviroCopper now has a managed resourced inventory of 233,000 tonnes of copper; 119,000 tonnes at Kapunda and now, following August’s maiden resource estimate, 114,000 tonnes at Moonta.

In this special MiningMaven Wire we provide analysis of the maiden copper resource estimate at Moonta and provide some more contextual background about other global ISR copper projects that could provide indicators as to how EnviroCopper might develop.

 

The latest Moonta report can be read by accessing the download page HERE.

 

This MiningMaven Wire also provides an update to the main EnviroCopper report published in June 2019, following release of the initial mineral resource estimate at Moonta in August 2019. The full report can be read HERE.

EnviroCopper – Harnessing the vast opportunity presented by low-cost copper production

EnviroCopper is a copper exploration, development, and production business formed in March 2019 to focus on stranded copper projects previously considered too low-grade for development. Thor Mining (LSE:THR) has the right to earn in to up to 30% of the company, while the remainder is held by two businesses called Environmental Copper Recovery and Environmental Metals Recovery.

With copper prices at multi-year lows, EnviroCopper’s innovative, low-cost, and low-impact approach to copper extraction has never looked more relevant. As the firm’s work to build up production and expand its portfolio continues, Thor’s exposure could provide shareholders with a highly-significant opportunity for returns.

Low-impact recovery

EnviroCopper plans to approach assets using a low-environmental impact style of metal production called in-situ recovery (ISR). Unlike conventional mining operations, ISR centres around a chemical process called ‘leaching’, that – in layman’s terms – involves dissolving minerals underground in a solution before extracting them at the surface. As ISR is much cheaper and quicker than actually building a copper mine, EnviroCopper believes that the technique can bring lower-grade projects into economic territory.

A video from Excelsior Mining explaining the ISR process in detail

Although it is well established in phosphate and uranium mining, ISR’s introduction to the copper sector has been relatively recent. Indeed, as it stands, two of the only examples of the method’s application in this way are the Gunnison and Florence copper projects in Arizona, operated by Excelsior Mining and Taseko respectively. However, EnviroCopper sees a bright future for the technique and plans to spearhead its growth.

Proof of concept

EnviroCopper’s initial focus will be its 75pc-owned Kapunda project, which is found around 90km north-west of Adelaide in Australia. By achieving production at the asset, the firm hopes to demonstrate ISR’s operational viability in the copper market and take the technology to other projects.

Aided by historical mining data and environmental and hydrogeological work, EnviroCopper has estimated Kapunda contains an ISR-amenable inferred copper resource of 119,000ts. As announced in April, the company has also been able to recover gold from samples taken from the project and work to ascertain whether it can establish a resource for the precious metal is ongoing.

Before commercialisation, EnviroCopper must complete a pre-feasibility study and a definitive feasibility study at Kapunda.  It will also have to meet any necessary environmental, social, and regulatory requirements and secure financing.  Handily, it will a $2.8m government-issued research grant will support it in these efforts- indeed, the firm expects these funds to take the project through to demonstration of feasibility.

Bigger picture

Once progress has been made at Kapunda, EnviroCopper will move on to Moonta - its second 75pc-held project. Moonta is located around 160km north-east of Adelaide within the historical copper triangle of South Australia, where around 300,000ts of copper were mined and processed between the 1860s and 1920s.

Although it is an earlier-stage project than Kapunda, Moonta is also thought to be a much larger opportunity. In August 2019, EnviroCopper announced an initial inferred resource estimate for the asset of 66.1MMts grading 0.17pc copper. This translates to 114,000ts of contained copper considered amenable to ISR, taking EnviroCopper’s business-wide managed resource inventory 233,000ts. However, this initial figure was formed from the analysis of just 164 drill holes at Moonta. This lead to the identification of three copper deposits, called Wombat, Bruce, and Larwood. A further 308 holes already drilled over these deposits will feature in future resource modelling once quality assurance has been completed, providing an obvious opportunity for upside. What’s more, all three deposits remain open along strike or at depth – providing EnviroCopper with a chance to identify mineralisation beyond that already discovered.

Location of EnviroCopper’s ISR-amenable copper projects (Source: Thor Mining)

Perfect conditions

If EnviroCopper can prove ISR’s operational viability in the copper arena, then it hopes to introduce the technique at projects far beyond Kapunda and Moonta. Indeed, the firm has said that it aims to develop an expanded portfolio of opportunities, initially focusing solely on South Australia but potentially moving into other territories in the future.

The company has also said it plans to list on a recognised exchange, potential providing interested market participants with a way of getting exposure beyond a Thor investment in the future.

With copper prices currently sitting at two-year lows, the need for low-cost supply is particularly stark – especially given the forecast explosion in demand over coming years thanks to the rise of electric vehicles.  ISR potentially provides an ideal solution to this scenario – for context, all-in production costs per pound of cathode copper at Gunnison and Florence come in at just $1.23 and $1.10 respectively.

The potential presented by EnviroCopper and its assets, then, is clear – especially if the business can use its first-mover advantage in Australia to drive the sector’s growth. Importantly, Thor’s considerable stake in the company both diversifies its potential revenue streams and provides shareholders with yet another, significant upside opportunity. Indeed, in June 2019, executive chairman Mick Billing told MiningMaven, that the value of the firm’s copper exposure could even surpass that of its more established tungsten and molybdenum operations.

Author: Daniel Flynn

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

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 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 and do not share the views of the author. 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

 

‘There is a lot of upside to be had here’: Mick Billing on Thor Mining’s recent trip to Bonya and ongoing Molyhil deal discussions (THR)

Earlier this month, Mick Billing, chief executive of Thor Mining (LSE:THR), carried out a site visit to the firm’s tungsten and copper-prospective Bonya tenements. The trip was carried out as part of planning for a drilling programme at Bonya, which is adjacent to Thor’s flagship Molyhil and tungsten and molybdenum project following promising intersection earlier this year.

Against the exciting backdrop of an initial 114,000t copper resource at the Moonta project held within Thor’s EnviroCopper subsidiary, we caught up with Billing to discuss his findings from the trip. The chief executive also provides us with an update on Thor’s ongoing efforts to secure project finance and offtake agreements at Molyhil.

Bonya opportunity

To recap, Thor purchased a 40pc stake in Bonya from Rox Resources last year and is now in a JV with Arafura Resources. The two firms now share development costs proportionally to the size of their holdings. Bonya hosts 13 outcropping tungsten deposits that currently carry an exploration target of 3-4.9MMts at 0.3-05pc tungsten trioxide.  The area also hosts an inferred copper resources of 230,000ts for 4,600ts of copper.  Thor plans to extract and process this copper at Molyhil for a ‘minimal additional cost’.

Location of the Bonya tenements relative to Molyhil (Source: Company)

Despite the licence area being part of a known tungsten province, no tungsten drilling had taken place since the 1970s.  Regardless, in April, Billing said he hoped that Bonya could add ‘considerably’ to Molyhil’s life, scale, and economic outcomes. True to its word, Thor - alongside Arafura - completed an initial 2,500m reverse circulation drilling programme across Bonya earlier this year.

The work confirmed strong tungsten and copper mineralisation across several deposits, with particularly strong results coming from two areas called White Violet and Samarkand. Highlights from White Violet included 27m at 0.29pc tungsten trioxide from 35m, 12m at 0.67pc tungsten trioxide from 46m and 29m at 0.7pc tungsten trioxide from 81m, including 13m at 1.13pc tungsten trioxide.  Meanwhile, top copper intersections at Samarkand included 5m at 0.36pc copper, 12m at 0.77pc copper, and 7m at 1.23pc copper. To read the results in more detail, please click here.

Recent trip

To build on these strong initial results, Thor and Arafura will now target near-term drilling to test the extent of the two deposits and create reportable mineral resource estimates. To support this, Billing says he and his colleagues searched White Violet and Samarkand for surface scheelite – a tungsten compound that shines blue when a UV light is shined on it in the dark – on their recent trip. Billing says the work was high encouraging, further informing and extending the imminent drilling programme and leaving him with the impression that there is a lot of upside to be had in the area.

‘At White Violet we have identified a couple of holes where we drilled last time that we would like to take deeper and another one we would like to move the hole a bit to connect better up with some trenching,’ he said. ‘We are also going to do some infill work because we are really keen on getting a resource estimate out of this deposit in the next drilling programme, which we expect will start in September.’

‘Things were even more encouraging at Samarkand as we have found a couple of quite promising scheelite occurances extending past the area drilled out. We won’t just be going a bit deeper to do resource-type infill work, we will also be extending to the north-west and hopefully also to the south-east. We think there is a good chance we can not only get a resource at Samarkand but also extend the area where the mineralisation is currently known. There is a lot of upside to be had here.’

Outcropping copper just south of Marrakech deposit at Bonya

Funding discussions

Bonya and Molyhil’s prospectivity appears to increase with every related RNS release. Indeed, earlier this week Thor announced that a second metallurgical bulk sample drill hole has further boosted its flagship Molyhil project’s prospectivity for copper alongside tungsten and molybdenum.

Speaking to MiningMaven, Billing told us that he remains confident Thor will be able to lock in project finance and off-take agreements for both tungsten and molybdenum concentrates mined at Molyhil. As previously discussed, the company has been approached by, and advanced discussions with, several players whose interests include offtake agreements, joint venture arrangement, or debt instruments. Billing says such talks are still proceeding, with the business taking great care to ensure it picks the arrangement that works best for both itself and shareholders.

‘There is now quite a large group of companies who would like to offtake from the output at Molyhil. There is a smaller group who are interested in funding and there is another group that have said there is interest in a joint venture,’ he said.  ‘One of the things these potential JV partners will want out of that type of structure is almost certainly an offtake. With this in mine, we are not locking in with any of the others until we have exhausted the opportunity for a JV. These are people that are working at their own pace so I cannot underwrite the success or a timeline. However, we are still confident there is a deal to be done with a couple of the people with which we are in discussions.’

Author: Daniel Flynn

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

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 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 and do not share the views of the author. 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.

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  8. Thor Mining reveals substantial metallurgical testwork progress at Pilot Mountain (THR)
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  10. Could a copper resource at Molyhil help Thor Mining push project forward? (THR)
  11. Thor Mining releases ‘very exciting’ interim drill results from Bonya (THR)
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