Thor Mining (LSE:THR) was sitting at 1p on Friday morning after re-iterating the substantial progress made across its portfolio in H2 2018.
During the period, the firm completed an upgraded definitive feasibility study at its Molyhil tungsten and molybdenum project in Australia. This gave the site 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.
Last month, Thor said these attractive figures have already attracted the interest of various potential partners. It hopes to finalise an acceptable financing arrangement for the project with the help of Argent Partners over the near term.
Elsewhere, H2 2018 saw Thor complete its acquisition of an interest in the Bonya tenements, which are located near Molyhil. These contain 13 outcropping tungsten deposits, plus the small Bonya copper resource, providing significant potential to extend the profitable life of the proposed Molyhil operation. Thor has previously said that it expects to get drilling approval at Bonya over the coming quarter.
Meanwhile, the period covered by the results also saw Thor release a scoping study for its Pilot Mountain tungsten project in the US. This indicated the potential for a profitable 12-year mine life, while a revised mineral resource estimate boosted tungsten resources, and included zinc for the first time. Thor now plans to carry out the second stage of metallurgical test work and environmental and infrastructure studies at the site.
Finally, the business 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.
Elsewhere in Thursday’s results, Thor revealed a bullish outlook for metal prices. It said that, although tungsten pricing fell by around 20pc early in H2 2018 to settle at between $260/mtu and $270mtu, Molyhil remains ‘very well positioned’ thanks to production costs of just 490/mtu. This places the project in the first quartile of global production costs.
Speaking to MiningMaven last month, Thor’s executive chairman Mick Billing said industry dynamics could see Tungsten prices rise from their current 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‘China, the dominant global supplier, has withdrawn production licences from a number of producers for environmental reasons, and reports suggest that they have issued no new production licences for a couple of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, Thor said that molybdenum pricing has maintained gains made in early 2018 and continues to sit in the $11-12/lb range.
Finally, the business revealed a cash balance of £1.11m as of 31 December. It said this figure was bolstered by the exercise of 52,699,789 warrants and options, at various exercise prices, raising £625,623 at an average conversion price of 1.19 pence.
In Thor’s update for Q4 2018, issued last month, Billing 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.’
Author: Daniel Flynn
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