TIDMTHR
RNS Number : 5546K
Thor Mining PLC
31 July 2013
31 July 2013
THOR MINING PLC
QUARTERLY REPORT APRIL TO JUNE 2013
The Directors of Thor Mining PLC ("Thor") (AIM, ASX: THR) the
Australian tungsten and molybdenum, and gold explorer and
developer, today lodge the following June 2013 quarterly report. It
is scheduled for release on 31(st) July 2013 with the Australian
Securities Exchange (ASX) as required by the listing rules of
ASX.
Highlights Outlook for September Quarter
------------------------------------------------------------------ -------------------------------------------------------------------
TUNGSTEN & MOLYBDENUM
Molyhil NT
* Marketing & financing discussions continued with * Ongoing marketing & financing activities.
interested parties.
* Ongoing enhancement program to lower costs and
* Ongoing metallurgical work enhancing concentrate improve economic outcomes.
specification & potential financial outcomes.
* Exploration - review and test nearby prospects.
* Tungsten price up by 30% in 2013
* Brownfields targets reconnaissance.
GOLD
Spring Hill NT
* Pit optimisation study demonstrates attractive * Continued evaluation of potential for profitable
returns from mining near surface material at low production.
capex
* Follow up ore sorting testwork
* Toll treatment MOU with Crocodile Gold.
* Preparation for drill testing shallow targets nearby.
* Ore sorting testwork shows potential for lower costs
& improved economic outcomes.
Dundas WA
* Further geochemical sampling for nickel potential. * Follow up on site geochemical sampling for nickel
potential.
* Preparation for air core and RC drilling.
MOLYHIL TUNGSTEN-MOLYBDENUM PROJECT (NT) (100% THOR)
Project Development
June quarter activities were devoted to continuing efforts to
market project concentrates and secure project finance, as well as
progressing a number of optimisation opportunities
Discussions with potential customers for project concentrates
are ongoing. Samples of concentrate have now been delivered to a
number of these and are currently being assessed. During 2013, the
global demand and price of tungsten concentrates and other tungsten
products has strengthened considerably and Directors remain
confident that they will achieve a positive outcome from these
discussions to allow development at Molyhil to commence.
Ongoing Optimisation Studies
Following completion of the Molyhil definitive feasibility study
efforts have continued to optimise the process and improve the
returns. Recent activities have included trialling ore sorting
technology, which if successful would pre-concentrate coarsely
crushed ore prior to moving to the more expensive fine crushing,
grinding, & subsequent flotation and gravity circuits. The
outcome of this may be reduced costs, and enhanced potential to
mine and treat deeper ore and lower grade ore. Early testwork
achieved a very successful upgrade, particularly of the tungsten
component of the ore, with low losses. These results are being
followed up with testwork of a larger sample size.
Metal Prices
The selling price in Europe of Tungsten APT now sits at
US$420/mtu, while the price of Molybdenum Roasted Concentrates has
weakened to US$9.30/lb. The price of tungsten has improved by 30%
during 2013, and this along with the weakening of the Australian
currency against the US dollar adds impetus to the Molyhil project
economic outcomes.
Tungsten Exploration Program
Within a 60 kilometre radius of Molyhil there are 27 other known
tungsten deposits, or occurrences; an exceptional crustal
enrichment of this rare and strategic metal. With the exception of
Molyhil (the largest so far discovered), all these known
occurrences outcrop at surface and were identified by prospectors
more than 30 years ago.
A strong association between areas of high magnetic intensity
and the distribution of known tungsten deposits has facilitated a
focussing of exploration efforts. Highest priority is for discovery
nearest the existing Molyhil resource and proposed facility.
Transported soil blankets much of the target geology rendering
surface soil geochemistry ineffective in detecting the presence of
tungsten mineralisation. A geochemistry drilling program has now
been prepared to facilitate the sampling and analysis of the
underlying geology across the target area.
The proposed program will comprise up to 300 holes generally not
greater than 10 metres depth and undertaken by a light weight drill
rig.
GOLD EXPLORATION
SPRING HILL PROJECT - NT (THOR 51%, with earn-in rights to up to
80% equity)
Project Development
Toll treatment MOU
During the quarter Thor signed a non-binding Memorandum of
Understanding (MOU) in respect of toll treatment of ore from Spring
Hill.
The agreement is between Spring Hill's two co-venturers, Thor
Mining PLC and Western Desert Resources Limited (ASX: WDR), and
Crocodile Gold Australian Operations Pty Ltd, a subsidiary of
Toronto-listed Crocodile Gold Corporation (TSX "CRK").
Crocodile Gold operates the Union Reefs gold processing
facility, approximately 20 kilometres from Spring Hill, and
currently has excess processing capacity.
The agreement provides that Thor & WDR, following receipt of
all necessary approvals to conduct mining operations at Spring
Hill, will haul ore mined from the operation for processing and
gold extraction at Crocodile Gold's Union Reefs processing plant,
provided:
-- The parties can agree acceptable terms, and execute a formal
binding agreement setting out the terms upon which the toll
treatment may occur.
-- The Board of Directors of Crocodile Gold approve the toll treatment.
-- Excess processing capacity remains available at the Union Reefs processing facility.
The parties have agreed to work cooperatively to achieve a
mutually beneficial outcome and will at approximately six monthly
intervals correspond in reference to progress and issues.
Pit Optimisation Study
In June 2013 the directors announced that Thor is preparing for
mine development following positive results of a study to extract
near surface oxide ore from the project. An opportunity has been
identified which may expedite early environmental and regulatory
approval to mine shallow oxidised ore by constraining the initial
mine plan to extract only near surface oxide material for
processing off-site. Mining of deeper transition and primary ore
will be subject to subsequent studies and approval
applications.
Study parameters included:
Mining
Ore mined 880,000 tonnes
Ore cut-off grade 0.8 grams / tonne
Diluted ore grade mined 1.56 grams / tonne
Waste mined 1,970,000 tonnes
Stripping ratio 2.2 : 1
Processing
Ore transported to Union 880,000 tonnes
Reefs & processed
Feed grade 1.56 grams / tonne
Metallurgical recovery 90%
Ounces recovered 41,300
Financial Assumptions
/ Outcomes
US$ Gold price US$1,400 per ounce
A$ / US$ exchange rate 0.95
A$ Gold price A$1,473 per ounce
Mining costs (ore and A$4:00 per tonne
waste)
Processing costs A$33:00 per tonne
Total Operating costs A$1,170 per ounce
Capital Cost Less than
A$5 million
Based upon the above parameters and current exchange rates,
operating costs in the study are US$1,000/ounce compared with a
gold price of over US$1,300 / oz. providing a margin of more than
US$300/oz on very low anticipated capital outlay
Ore Sorting Proof of Concept
Subsequent to the end of the quarter Thor announced positive
results from initial ore sorting test work on near surface oxide
ore from the Spring Hill project. Pending confirmation by
subsequent test work on a larger sample size, internal modelling,
suggest material cost savings at the proposed Spring Hill
operation, from this pre-concentration process, with additional
potential benefits of increasing the economic mineable
inventory.
Project Exploration
Low cost Reverse Circulation (RC) drilling is now proposed to
test shallow mineralisation targets less than 150 metres below
ground surface. There has been an 11% increase in the Spring Hill
resource above 150 metres since Thor commenced drilling which
predominantly targeted mineralisation below 150 metres. Several
shallow targets have been identified adjacent to, but not currently
included in the existing resource. This work will be prioritised
over the previously described plans to test the shallow satellite
targets to the north.
During the course of exploration conducted in the 1990s, several
targets were identified in the vicinity of the main Spring Hill
resource and have been partially drilled. Four of the prospects
identified in this work have yielded positive mapping, rock chip or
RC drill assay results but are yet to be fully evaluated. In
addition, as yet untested targets have been identified from high
resolution aeromagnetic data which represent additional
opportunities for increasing the resource base particularly with
near surface oxide ore.
DUNDAS PROJECT - WA (60% THOR)
Infill XRF soil geochemistry1 was undertaken at Dundas during
the quarter. Results of the additional analyses supported the three
southern anomalies.
1 Sample analyses were conducted using an Olympus Innovex field
portable XRF. Quality control data were collected via the analysis
of certified reference standards, blanks and duplicates. The
results are within acceptable limits for nickel and copper.
Prioritising expenditure on Molyhil and Spring Hill has
prevented the commissioning of, planned and permitted, drilling the
gold targets at Dundas. Testing these targets continues to be
conditional upon the availability of working capital.
The additional infill geochemistry results include two area of
weakly elevated nickel coincident with magnetic trends. Slightly
elevated copper trends similar to the nickel are also present.
These results provide moderate encouragement but more infill
geochemistry work is required before drill testing if any is
warranted.
CORPORATE AND FINANCE
During the quarter, the Company drew down the second and final
A$500,000 tranche of the debt finance of A$1million secured against
its Molyhil and Spring Hill projects for a term of 3 years.
In March 2013 the Company issued an open offer to eligible
shareholders inviting subscriptions of up to UKP2.025 million. The
offer closed on 19(th) April 2013, raising a total of A$382,000
before costs associated with the offer.
In recognition of the difficult market conditions the directors
have made a concerted effort to reduce costs, including employee
costs. Directors' remuneration has been withheld since January
2013, and consulting fees of the executive chairman have only been
partially paid since September 2012. It is expected that
shareholders will be requested to consider conversion of the
outstanding amounts to shares at the next general meeting.
Commenting, Mr Mick Billing, Executive Chairman of Thor Mining,
said:
"Like many junior resource companies, Thor is encountering
trying market conditions, and we are grateful to those shareholders
who have remained loyal during this period. We are fortunate to
hold resources at both Spring Hill and Molyhil which have value,
well in excess of market capitalisation. At Molyhil while progress
in obtaining off-take agreements and finance has been slower than
we expected, we remain active in both enhancing the project
parameters, and continuing discussions with potential off-take and
finance partners. In the meantime, the recent studies for Spring
Hill have proved very encouraging and the potential for development
with very low capital expenditure has been substantially
enhanced."
Enquiries:
Mick Billing +61 (8) 7324 Thor Mining Executive
1935 PLC Chairman
Allan Burchard +61 (8) 7324 Thor Mining CFO/Company
1935 PLC Secretary
Colin Aaronson/ +44 (0) 207 Grant Thornton Nominated
David Hignell 383 5100 UK LLP Adviser
/Jamie
Barklem
Nick Emerson/ +44 (0) 1483 Simple Investments Broker
Renato 413500
Rufus
Alex Walters +44 (0) 7771 Cadogan PR Financial
713608 PR
+44 (0) 207
839 9260
Updates on the Company's activities are regularly posted on
Thor's website www.thormining.com, which includes a facility to
register to receive these updates by email.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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