Thor Mining chief executive Mick Billing is currently out in the Northern Territory of Australia visiting the company’s Bonya tenements adjacent to its flagship Molyhil tungsten and molybdenum project. The visit follows recent claims by the business that it is continuing to make steady progress in its efforts to lock in project finance and off-take agreements for metal concentrates mined at the asset. With this in mind, can investors expect an imminent update on the project? Here we look at Molyhil and Bonya’s in detail before running through Thor’s recent efforts to enhance both assets’ already attractive fundamentals.

Making Molyhil

Wholly-owned by Thor, Molyhil is a tungsten and molybdenum asset located around 320km east of Alice Springs. The project is formed from two adjacent magnetite skarn bodies that contain economic amounts of scheelite, molybdenite and magnetite mineralisation.

Before Thor’s involvement, little work had taken place at Molyhil bar a brief period of mining at its southern ore body during the late 1970s and early 1980s. Thor has built upon these efforts considerably, completing resource extension drilling and metallurgical test work. It has also made a great deal of permitting progress, carrying out technical, environmental and social studies as well as securing environmental approvals and land agreements with traditional owners.

Thanks to Thor’s work, Molyhil is now one of the higher-grade open-pit tungsten in the western world. A mineral resource estimate in 2014 gave it a complete resource of 4.71Mt for 13,100ts of tungsten trioxide and 6,220ts of molybdenum.

To build on this potential, the firm completed a feasibility study in August last year. The work gave Molyhil a post-tax NPV of $101m, an IRR of 59pc, and a seven-year open pit mine life delivering annual production of 120,000mtu tungsten trioxide and 450t of molybdenum – both in concentrate. Meanwhile, opex came in at just $90/mtu.

Thor also believes that Molyhil could deliver a great deal of upside, through both operational enhancements and the opportunity to pursue satellite resources and underground production. Indeed, the firm has demonstrated that high molybdenum and tungsten trioxide continue below the pit floor.

The underground case for Molyhil (Source: Company)

Advancing talks

Thor has spent much of this year focused on locking in project finance and off-take agreements for both tungsten and molybdenum concentrates mined at Molyhil. Although this has taken longer than expected, Billing recently said Thor’s confidence in securing such a deal ‘remains firm’. He added that the company had been approached by, and advanced discussions with, several players whose interests include offtake agreements, joint venture arrangement, or debt instruments.

In the meantime, Thor has also spent time working to support these discussions by enhancing Molyhil’s already attractive fundamentals. In June, the organisation drilled two holes down plunge of the site’s Yacht Club lode to support the production of tungsten and molybdenum concentrate samples for prospective offtake partners. One of these holes intersected 1pc tungsten trioxide and 0.16pc molybdenum down 92.6m.

The hole confirmed extensive high-grade scheelite mineralisation and molybdenum grades expected at Molyhil. However, it also encountered 0.13pc copper from the surface, a grade that Billing described as ‘potentially economic’. Although copper has been part of Molyhil mineral resource estimates before, it has been absent from Thor’s recent marketing efforts. However, with recent work supporting the production of a separate, saleable copper concentrate at Molyhil, this could soon change. Thor believes that the modest copper levels could provide another revenue stream and plans to include the metal in an updated Molyhil mineral resource estimate over coming months.

Bonya boost

Thor’s efforts to enhance Molyhil’s fundamentals have also seen it complete considerable work at a collection of adjacent tenements called Bonya this year. Bonya, in which Thor purchased a 40pc position from Arafura Resources last year, hosts 13 outcropping tungsten deposits. These 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 at Molyhil for a ‘minimal additional cost’. Despite the licence area being part of a known tungsten province, no tungsten drilling has 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.

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

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. 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.

Vanadium opportunity

Finally, it is worth mentioning that Thor’s deal with Arafura last year also saw it take a 40pc stake in the Jervois vanadium project in Australia at no extra cost. Although the project is very early-stage, past exploration has intersected extensive and potentially economic grades of vanadium and titanium. Some samples also returned up to 1.59ppm of combined gold, platinum, and palladium when assayed.

Thor and Arafura announced an exploration target range for Jervois of 90-110MMts at 0.3-0.8pc vanadium pentoxide and 4-8pc titanium dioxide in July. The pair also outlined a future work programme for the asset, which will focus on resource drilling at the Casper, Coco, and RD deposits. They will also test another prospect for potentially economic grades of vanadium and titanium and complete follow up work on the gold and PGE potential on all candidates. Subject to success in these areas, the business would then conduct further metallurgical studies along with environmental and social impact studies.

Where next?

As can be seen, Molyhil has long represented an attractive asset. Work completed by Thor over the past year has only enhanced this prospectivity by adding in a whole new source of tungsten deposits and throwing copper into the mix. With the company long claiming that Molyhil has enjoyed third party interest, there seems a good change that these efforts will have made the project more attractive to potential offtakers and financiers. In the wake of Billing’s trip to Bonya, then, can Thor firm finally take discussions over the line and create value for itself and shareholders alike?

Author: Daniel Flynn

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