Monday saw Thor Mining (LSE:THR) reveal that a second metallurgical bulk sample drill hole has further boosted its flagship Molyhil project’s prospectivity for copper alongside tungsten and molybdenum.

The hole, which was one of two drilled down-plunge of the Molyhil Yacht Club lode to obtain material for concentrate samples, has now been assayed. Highlights include 3.5m at 1.32pc tungsten trioxide from 9.5m, 10m at 0.32pc copper from 44m, and 10m at 1.32pc tungsten trioxide from 53m. Elsewhere, assays included 5m at 1.74pc tungsten trioxide from 76m including 2m at 0.81pc molybdenum from 78m and 7m at 1.58pc tungsten trioxide from 88m including 4m at 0.44pc molybdenum from 88m.

Monday’s update follows the assay results from the first Yacht Club hole, which were released in June. The hole confirmed extensive high-grade scheelite mineralisation and molybdenum grades as expected. However, like the second hole, it also encountered copper from the surface at a grade described by Thor executive chairman Mick Billing as ‘potentially economic’.

Although copper has been part of Molyhil mineral resource estimates before, it has been absent from Thor’s recent marketing efforts. A historic Molyhil mineral resource estimate with copper can even be viewed on page 33 of 124 at the following link.

With recent work supporting the production of 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. Indeed, on Monday, the business revealed that it has now commissioned RPMGlobal to assess the Molyhil Mineral Resource Estimate for the inclusion of copper in response to the promising results. Billing added that the continued confirmation of copper was ‘very pleasing’. 

‘Thor has commissioned a review of the resource estimate for Molyhil to include this, however until that work is complete, we can ascribe no additional value for any potential copper at this time,’ he said. ‘Since acquiring the Bonya properties, ongoing studies on the combined Molyhil-Bonya project have identified the copper potential of Bonya and its potential suitability for processing at Molyhil (news releases 26 November 2018 and 7 May 2019). This has led to the reappraisal of the economic potential for copper at Molyhil.’

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.

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.

Author: Daniel Flynn

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